“Beth Garza, the grid operator’s former market monitor and a senior fellow at R Street Institute, stressed the need for resource adequacy requirements paired with load-serving entities’ obligations to meet reliability requirements.”

“In a world we’re heading toward — in a world where variable energy resources, zero-marginal-cost resources are becoming even more prevalent — the market will not provide enough revenue for all that capacity that needs to be recovered,” Garza said. “Generators need to get paid, but what they’re getting paid today are through energy prices with no scarcity and energy prices with scarcity, which can be a handful of hours a day. Historically, the newest units added to the system were the most efficient, and so that provided a gap to fund the less efficient stuff. That’s no longer the case with zero-marginal-cost resources.”

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