The Northeast Energy and Commerce Association (NECA) held its 19th Power Markets Conference virtually Nov. 19, featuring three panels discussing the impact of renewable energy integration on reliability, transmission and market rules.

The event also boasted two keynote speakers. The first, a longtime energy journalist, touched on the recent election results and their potential impact on power markets. The second was FERC Commissioner Richard Glick, who could rise to the chair position under the Biden administration.

Here are highlights of what we heard.

Do not Say ‘Chairman Glick’

Glick started his keynote by making one thing clear: He does not know who the next FERC chair will be, though he did not deny that he wanted the position. Glick said he has been in Washington long enough to know that “those decisions are made for a variety of different reasons, and they’re certainly out of my hands.”

Glick also does not control what he called “the dispute” between FERC and the states over federal regulation of wholesale markets. He said he disagrees with FERC’s endorsement of a minimum offer price rule (MOPR) in RTOs, which has the effect of raising prices and is “troubling for a variety of reasons.”

MOPRs have caused states to re-evaluate their participation in wholesale markets, especially in New England, Glick said. If states continue to grow suspicious of the RTO markets with a MOPR regime, “they’re going to go their own way, or they’re going figure something else out,” he said.

“I think that we’re really at an important point here in time, and I certainly think the RTOs get it,” Glick said. “I think ISO New England certainly gets it, and PJM and New York as well. They realized they need to do something different.”

Glick said that at some point, he hopes to convince current — and future — colleagues to design capacity markets that better accommodate state policies and not antagonize them.

“One of the concerns I have is that I think we spend too much time worrying about capacity based on resources and not enough time worrying about flexibility,” Glick said. “How do we encourage — whether it’s gas or storage — those assets to be available when we need them for flexible purposes? It requires some broader thought. … It would probably take the commission a while to modify these markets, but if we don’t do that, I do think that we’re headed for a situation that no one’s going to like.”

Is it possible to design one-size-fits-all standard capacity markets for RTOs? Glick said Congress put an end to talk about that in the early 2000s after backlash from various stakeholders around the country.

“The concept of creating one format for all the RTOs is probably not in the cards,” Glick said. But he admitted that he’s “not a big believer in the mandatory capacity market concept or construct.”

“I came in thinking that we had competitive markets,” Glick said. “Instead, we have markets that have administrative constructs,” in which the market monitor or FERC tells participants what they can bid into the capacity market “or even the ancillary services markets,” he said. That means FERC spends “way too much time litigating these issues” because there are “hundreds of millions of dollars at stake.”

“To me, it’s way too complicated; I’d like to simplify it a little bit and go back to real competitive markets if we can.”

Renewable Integration, Market Rules, Reliability and Tx

Clyde Loutan, principal of renewable energy integration at CAISO, said California has more than 20 GW of renewables on the grid. On some days, peak load is about 20 GW, which creates some “unique challenges.”

“A bigger challenge is calculating or trying to figure out what that net load forecast is,” Loutan said. “Remember, we have one variable, which was load was temperature-dependent, and if you could forecast the temperature, you could pretty much know what that load was going to be in California.”

Lorenzo Kristov, retired principal of market and infrastructure policy at CAISO, added that the grid is no longer the only way to get electricity.

“For 100 years, if you wanted electricity, you got it from the power system,” Kristov said. “Now, just about any customer can install on-site equipment, and the behind-the-meter market becomes a competitor for grid kilowatt-hours.”

Kristov said large California-based companies like Google and Apple are starting to create resources at their facilities to manage some of their energy needs, which is likely to accelerate because associated technology costs “keep going down while the capabilities keep going up.”

FirstLight Power CEO Alicia Barton added that one of the challenges is balancing future renewables with a grid maintenance. “Just because we’ve kept the lights on doesn’t mean we’re not facing some critical junctures ahead,” she said.

Paul Wattles, senior analyst for market design at ERCOT, said more than $6 billion is planned to be spent on transmission upgrades expected to be in service by 2025. Renewable integration is a significant driver of capital investment, but load growth is as well.

“We’ve just had just unprecedented load growth in the Permian Basin [oil fields], and a lot of that fracking and drilling out there is being done with portable generation because we didn’t have the transmission system to get the power to the oil fields,” Wattles said. “It also happens to be an area where there’s tremendous solar irradiance capacity … so that’s a weird dichotomy, but they’re going actually to help each other.”

Eli Massey, senior adviser on policy studies for MISO, said large corporate users as well as states demand clean energy.

“The problem that we have from a planning [perspective] is we don’t know how fast it’s coming, and we’re trying to get a much better idea of what are the operational impacts and how does our transmission system need to evolve to facilitate all this prospective generator interconnection,” Massey said.

He said a MISO Renewable Integration Impact Assessment found that “we start getting into some pretty tricky operating circumstances” when the RTO’s renewable penetration levels reach 40 to 50% of load.

“We’re going to need a significant amount of transmission investment,” Massey said.

Carissa Sedlacek, director of planning services at ISO-NE, said “our issues are not market design issues but rather transmission integration issues.” She said the RTO has determined that the Cape Cod area will require 345-kV upgrades to accommodate offshore wind.

“There’s going to be some serious siting concerns, especially in southern New England because it is congested from a population perspective, and finding the right of way to site the new transmission lines to integrate all of the proposed offshore wind will be a challenge for us over the next several years,” Sedlacek said. “This will take time. It’s not going to be a quick process.”

Vandan Divatia, director of ISO policy and interconnections at Eversource Energy, agreed that there is “some major work to do.”

“We have to integrate a ton of clean energy resources, over 10 GW just in this decade, and we will look to optimize clean energy and reliability needs in some cases to ensure cost-effectiveness and reliability for our customers,” Divatia said.

RENEW Northeast Executive Director Francis Pullaro said he recognizes “that a megawatt of nameplate wind is not an equivalent of a megawatt of nameplate gas in the ISO markets.”

“You know [wind and solar resources] are discounted because of the variability of wind and the limited amount of sunshine. Still, if developers could count on some level of revenue from that, it certainly would be reflected in the [competitive solicitation] bids that these resources are submitting,” Pullaro said. “I think that’s kind of how we see that issue: It’s above all a consumer issue, and I think that’s why the states are particularly concerned about it.”

NYISO Executive Vice President Emilie Nelson said MOPR is a “challenging issue that I think we’re trying to work through as an industry, and all of the Eastern RTOs are trying to figure out the right course.”

Nelson added that what is interesting about carbon pricing “is the design values that clean energy attribute, which is driving much of the policy that we’re trying to work through the energy market.”

ISO-NE Vice President of Market Development and Settlements Mark Karl said the RTO favors carbon pricing as a potential solution, though there are “certainly challenges with it.”

“It’s one thing to have carbon pricing in a single-state ISO versus trying to get six states to agree,” Karl said. “The advantage of carbon pricing is that we know how it works, and we have a model for it.”

Election Impact

Veteran energy journalist Peter Howe, now senior adviser and energy practice lead at Boston public relations firm Denterlein, said he does not have a crystal ball, nor “perfect clarity and vision into what’s going to come next” following the recent election results. But Howe does seem sure that the incoming Biden administration will undoubtedly be different on a host of energy and environmental issues than the outgoing Trump administration.

Some of President-elect Joe Biden’s policy proposals: net-zero emissions from the electric sector by 2035; a net-zero economy by 2050; rejoining the Paris Agreement on climate change; mass reversal and revocation of executive orders and lawsuits; clean energy jobs; and “electric vehicles galore,” Howe said. Some of them depend on the outcome of the runoff elections in Georgia for the final two U.S. Senate seats. Democratic wins would mean a 50-50 tie in the Senate, with Vice President-elect Kamala Harris as the tiebreaking vote. Just one Republican win would maintain the GOP’s slim majority and make it harder for the Biden administration to push through the most progressive part of any energy and environmental agenda, Howe said.

When it comes to oil and gas and fracking, Howe said many “symbolic and meaningful things” could be done, including how tightly leases on federal land are regulated and how aggressively the Justice Department enforces environmental violations.

“I think that Joe Biden will get to a point where he can make a case that maybe [he] didn’t ban all fracking everywhere … but has done a lot to keep up the pressure on this industry to be as clean as it can be,” Howe said. “And frankly [Biden] wouldn’t say it out loud, but [he needs] to just move the scales as best [he] can away from fossil fuels and toward renewables by making the production of fossil fuels incrementally more expensive by closer regulation.”

At the state and regional level, Howe said offshore wind projects like Vineyard Wind could clear remaining regulatory and permitting hurdles with the Bureau of Ocean Energy Management “led by people who are very enthusiastic about offshore wind.”

Howe also referenced the five New England governors, excluding New Hampshire’s, who recently advocated “very forcefully for changes” to ISO-NE governance, market design and transmission planning. (See New England Governors Call for RTO Reform.)

Howe said the states and the RTO are in the same boat but “not rowing in the same direction” on renewables growth and 80% carbon reduction by 2050 or net-zero emissions. He said an expanded Regional Greenhouse Gas Initiative (RGGI) could bridge the divide.

“I certainly would love something like a supersize RGGI to bake in carbon pricing or some form of carbon pricing, rather than the complexity of blending [the public policies of] six states of into the market.”

States like Connecticut have openly talked about the idea of “actually departing” the ISO-NE wholesale market, though Howe thinks that is “quite a long shot, both physically and politically.”