Proposal valuing renewables in capacity market auctions now moves to Federal Energy Regulatory Commission
Madison, Connecticut. December 3, 2020
RENEW Northeast, Inc. (RENEW), a leading regional renewable energy organization governed by both environmental and industry interests, today praised the NEPOOL Participants Committee on its approval of a proposal containing four RENEW provisions that will allow renewable power projects to compete fairly in the electricity markets managed by ISO New England (ISO). NEPOOL’s Market Committee had earlier adopted the proposal at its November meeting.
Today’s vote is confirmation that a majority of the diverse sectors represented in the NEPOOL Participants Committee recognize renewable power as a growing and cost-effective resource that is competitive in existing electricity markets. The NEPOOL Participants Committee consists of all participants in the New England electricity system including consumers, generators, municipally-owned utilities, and investor-owned transmission companies.
Today’s action is a clear rejection of the ISO proposal that calls for high offshore wind and solar cost assumptions. The ISO’s proposed offshore wind costs are 1.5 times the prevailing commercial expectations according to publicly available data from a wide range of professional sources, including one prepared for the State of New York. ISO incredibly assumes local project developers that have signed long-term contracts will be taking an average loss of $1.3 billion per 800-megawatt project.
ISO will submit its proposal with the NEPOOL-approved alternate proposal to the Federal Energy Regulatory Commission (FERC) later this month. FERC will consider it on equal footing with the ISO proposal. Once the filing is made, FERC will open a public comment period for interested parties.
“Today’s vote by the NEPOOL Participants Committee is a clear victory for renewable energy and ratepayers. The adoption of realistic cost assumptions for renewable energy is critical to our region’s decarbonization and economic goals. We hope FERC will agree.”
Francis Pullaro, Executive Director of RENEW
The NEPOOL proposal with the RENEW provisions sets the lowest price that new renewable power, particularly offshore wind and solar, can offer into the ISO capacity market which restricts suppliers from offering at prices below their costs. The RENEW language will ensure clean technologies will be competitive with conventional generation sources. The result will be lower costs to consumers for clean energy.
This fall, the New England Governors laid out a vision for changes needed to achieve “a clean, affordable, and reliable 21st century regional electric grid,” noting that the existing “wholesale markets fail to sufficiently value the legally-required clean energy investments made by the ratepayers they serve.” Adoption of these amendments is an important step toward reaching the Governors’ goals.
Last month, Massachusetts’ largest and most respected business and nonprofit associations, representing over 4,000 energy users, called on Governor Charlie Baker to support the full participation of renewable energy in all the ISO’s electricity markets.
In a letter sent to the Governor and his energy team, Associated Industries of Massachusetts (AIM), Massachusetts Business Roundtable, Power Options, Alliance for Business Leadership, and RENEW Northeast outlined how the current ISO treatment of renewable energy, particularly offshore wind, results in keeping “prices artificially high for consumers while perpetuating financial advantages to conventional generators.”
Visit www.renewne.org/fair-market for additional information.