Policy Studies Electricity Policy

How Voluntary Electricity Trading Can Help Efficiency in the Southeast

by Jennifer Chen AND Michael Bardee, former General Counsel and Director of the Office of Electric Reliability at the Federal Energy Regulatory Commission

Aug 26, 2020

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Key Points

If Southeastern utilities wish to trade on a voluntary basis, the Energy Imbalance Market, a voluntary market operated by an RTO, is a model with quantified success, and leveraging an existing market platform could be less costly than setting up a new market or exchange.

Factors for success in cost and emissions reduction include a footprint with a diversity of resources and customer demand, as well as energy storage that helps avoid curtailing zero-marginal-cost energy. Centralized market operation can help optimize the system every five minutes, which increases the flexibility of the system and can enhance reliability. The level of market participation and transmission availability are also key.

Good governance, transparency and a system that is independently operated and monitored may provide confidence for regulators, investors and participants that the market offers a fair competitive field.

Press release: The Southeast is the Last Frontier of Organized Wholesale Electricity Markets. Here are the Best Options Moving Forward.