Introduction to Power Markets

The transition to a 100% clean electricity supply will likely involve a very large amount of wind and solar power generation. These resources, with no fuel cost and low operating costs, fit poorly in wholesale electricity markets based on the marginal cost of production, which is largely determined by the cost of fuels. This mismatch could disrupt power markets, drive up costs, and prematurely cap the growth of wind and solar. To understand how wind and solar will affect power markets, we first have to know how power markets work today. This introductory session is intended for people who have limited or no knowledge of wholesale electricity markets, regional transmission organizations, and locational marginal prices. Ben Paulos of PaulosAnalysis offered a presentation based on the short report How Wholesale Power Markets Work, written for the 100% Clean Energy Collaborative.