More than 450 people tuned into Raab Associates’ 168th New England Electricity Restructuring Roundtable last week to hear talk about clean energy and decarbonization, the implications of the November elections and the case for wholesale power market redesign.

Here is some of what we heard during the event, hosted by Boston law firm Foley Hoag.

Markey: Climate Issues Top Agenda

During his keynote speech, U.S. Sen. Ed Markey (D-Mass.) said that amid “the coronavirus pandemic … an economic recession to climate change, the intersection of all these devastating crises is demanding that we restructure our energy systems, restructure our economy, restructure our democracy.”

“That was what was on the ballot in November,” Markey said.

“Nothing has been the same” since he and Rep. Alexandria Ocasio-Cortez (D-N.Y.) introduced the Green New Deal in February 2019, which “unleashed an incredible response, especially from young people … demanding that the climate be put at the top of the agenda.”

Markey said there is “a real chance to use clean energy development as a way of putting millions of people to work in a relatively short period of time.”

“The good news is that it’s at the center of the agenda for the [incoming] Biden administration, and it needs to be,” Markey said. “From March until June of 2020, the clean energy sector lost more than 500,000 jobs, 14% of their workforce, and as a global clean energy hub, Massachusetts has been hit particularly hard, but the transition to clean energy could not be stopped even this year.”

Markey noted that 18 GW of new solar and 15 GW of wind will have been installed this year, compared with 2 GW and 25 GW, respectively, when President-elect Joe Biden was sworn in as vice president more than 10 years ago. “So, look where we are now,” he said.

While it is not the Green New Deal, Markey said Biden is “laying out a very ambitious, very aggressive energy plan.” Naming former Secretary of State John Kerry as his climate envoy is “absolutely a signal to the rest of the world,” he said.

Markey said that to achieve the Green New Deal’s objectives of a 100% clean energy economy and carbon-free power sector by 2035 will require billions of dollars for battery storage and promoting electric vehicle adoption through the construction of at least 500,000 new charging stations.

“This is not pie in the sky, put a man-on-the-moon stuff; these are largely technologies that already exist,” Markey said. “It’s been a political problem but not a technological problem. … We know we can get this done. It is just a matter of political will. I will be working very hard to make sure that these hundreds of billions of dollars are spent in a way in which we have public-private partnerships jumpstarting clean energy innovation and deployment.”

Markey said that he introduced a bill with Sen. Chris Van Hollen (D-Md.) that would create a $35 billion clean energy climate bank to spur $1 trillion in private investments and put an estimated 5 million American workers back to work in “good, clean, green jobs.”

Markey said New England states have the chance to be “the true leaders of the Green New Deal” or some variation of it. He said college and high school students joined his recent re-election campaign by the thousands over the issue.

“So it’s only going to intensify politically as each year goes by,” he said.

Pursuing Goals Through Wholesale Market Redesign

Moderating a panel on wholesale market redesign, Jonathan Raab said New England states are increasingly using long-term power purchase agreements for offshore wind, nuclear and Canadian hydropower “to meet aggressive decarbonized electricity mandates” even though the PPAs “don’t mesh very neatly with New England’s current wholesale market designs.”

Raab added that ISO-NE’s Competitive Auctions with Sponsored Policy Resources (CASPR) initiative that created a two-stage capacity auction to accommodate state renewable energy procurements, recently affirmed by FERC in a party-line decision, was initially intended as an interim measure. (See FERC Defends CASPR Order.)

“Stakeholders in the states are now engaged in a yearlong, intensive effort to try and redesign or layer on alternatives that will better support the pursuit of these clean energy and decarbonization mandates while also taking full advantage of the competitive wholesale markets that we have here,” Raab said.

In October, five New England governors issued a joint statement calling for changes and reforms to wholesale market design, transmission planning and RTO governance to enable states to better meet their decarbonization goals. (See New England Governors Call for RTO Reform and States Demand ‘Central Role’ in ISO-NE Market Design.)

Carbon pricing and a forward clean energy market are two of the potential solutions.

Paul Hibbard, principal at Analysis Group, said the conventional wisdom is that carbon pricing is not likely to become the primary basis for meeting New England state climate targets. It is viewed as “politically suspect” and would be labeled as a “tax.” Prices would need to be high relative to the current Regional Greenhouse Gas Initiative prices. Additionally, it is opposed by key groups and industries, including those that benefit from entrenched policies, and supportive policymakers, legislators and governors remain “few and far between.”

Hibbard said consumers and businesses will pay substantially more to meet emission reduction requirements than they would under an efficient carbon pricing mechanism because states will continue to administer a wide-ranging palette of complicated policy programs, with associated costs and inefficiencies.

Hibbard said a carbon price would increase the price of electricity, “but the overall level of consumer payment for energy is lower when you take into account the cost avoided for heating fuel and gasoline for vehicles.”

Kathleen Spees, principal at The Brattle Group, presented “another path forward for achieving that clean energy future.” The forward clean energy market (FCEM) would be a centralized, three-year forward auction in which buyers and sellers could voluntarily exchange clean energy attribute credits (CEACs), which is akin to a renewable energy credit (REC).

A “dynamic” CEAC would award more credits to resources that displace more carbon emissions, focusing incentives that abate carbon emissions more quickly. A second option would allow buyers to register a preference for “targeted” resource types to meet carve-outs for preferred technologies such as storage or offshore wind. An FCEM could address the conflict between state and federal policymakers on issues such as the minimum offer price rule and CASPR.

Spees said that an FCEM could save customers about $4.5 billion and abate 7.4 additional megatons of carbon over 10 years compared to traditional state contracting.

Judy Chang, undersecretary of energy for the Massachusetts Executive Office of Energy and Environmental Affairs, said New England needs “a regional market that really supports and facilitates the transition to a decarbonized future,” despite differences in state targets.

“In the ideal situation, we would like to have an economywide carbon price of some kind to reduce emissions,” Chang said. “We prefer to procure clean energy from a regional perspective from a regional market. We prefer to have a larger competitive market to ensure that we continue to procure and use clean energy needed to help us to decarbonize and do that in the most cost-effective way … so we see the forward clean energy market and the integrated clean capacity market as having the potential to meet the needs of the states.”

Election Implications on Clean Energy, Decarbonization

Former FERC Chair Cheryl LaFleur was featured on a panel that discussed recent election results and the potential impacts of clean energy and decarbonization goals from federal and regional perspectives.

LaFleur, now on the ISO-NE Board of Directors, said that with a Democrat in the White House, “there will be considerably more opportunity and ability to advance climate policies, especially in contrast to the last four years.”

She prefaced her remarks with the belief that Republicans will win at least one of the two remaining Senate seats during the runoff elections in Georgia next month, which would likely negate “any kind of overarching federal legislation to set a national goal, like a clean energy standard or a carbon cap and trade, helpful though that might be.”

In a divided government, there will be “a lot of opportunity for action” by the president through executive orders and by the various federal agencies whose actions affect climate change and energy policy in many ways, LaFleur said.

“I hope there will be a potential for far more cooperation, rather than cross action, among the federal agencies, and more mutually supportive action between the federal and state governments rather than tension as there has been recently,” she said.

Rich Powell, executive director of ClearPath and ClearPath Action, which seek to develop and advance conservative policies to accelerate clean energy innovation, said the priority for finding a bipartisan path forward on climate and clean energy policy has “never been higher, has never been clearer.”

Christine Tezak, managing director at ClearView Energy Partners, said the first 100 days of the Biden administration could look very similar to the Trump administration with respect to executive orders directing agencies to roll back several of the initiatives from the previous four years.