Climate + Energy Project

From: Reuters, Reporting by Timothy Gardner

 Wind power groups urged the U.S. government on Wednesday to open up regional electricity markets saying competition between power providers fosters the development of renewable energy better than monopolies do.

The American Wind Energy Association, an industry group also known as AWEA, and the Compete Coalition, a group of more than 500 electricity stakeholders including companies and environmental groups, urged Congress, the Obama Administration, and state and regional governments to promote competitive wholesale electricity markets.

“We can integrate a lot more renewable energy into our power grid if we use competitive wholesale markets,” Rob Gramlich, a vice president for public policy at AWEA, told reporters.

In states where power markets are monopoly-regulated, such as in the U.S. West, excluding California, and the U.S. Southeast, power providers have little incentive to innovate or lower costs, they said.

After Congress failed to pass a climate bill that would have placed a price on emitting carbon, backers of alternative energy are looking for additional ways to spread development of alternative energy.

The competition of open markets increases reliability and efficiency of power grids, which in turn helps integrate alternative energy like wind and solar into the power mix, the groups said.

The intermittent nature of wind and solar farms, which only produce power when it’s gusty or the sun shines, makes renewables difficult to integrate into the power grid with traditional power sources.  

One advantage of competitive power markets is they are are organized by independent groups such as regional transmission organizations or independent system operators that can give broad regional scope for diversifying energy sources. Monopoly markets do not have such organization.

“We have a third of the country that can barely move here,” Gramlich said about how the lack of organization in monopoly markets stymies development of renewables.

Cheryl LaFleur, a commissioner of the Federal Energy Regulatory Commission, which regulates the interstate transmission of electricity, said her agency was working on ways to measure how much competitive markets have helped integrate alternative energy into power grids. She said she hoped the information would assist regions in making decisions about how their power markets are organized.

-Posted by Kate Gonzalez, http://www.climateandenergy.org/