Although electricity seems very different from other consumer products, it is similar in some ways. The electricity market has producers, distributors, and intermediaries, wholesalers and retailers. As with other products, fluctuations in supply and demand result in price variations. But in other ways, electricity markets are unique and can be quite complex.
The transition to a 100% clean electric supply will likely involve a very large amount of wind and solar power generation. These resources, with very low operating costs and variable output driven by natural forces, fit poorly in wholesale electricity markets premised on the marginal cost of production.
The white paper “How Wholesale Power Markets Work” has been prepared by Bentham Paulos for the 100% Clean Energy Collaborative which has been created by Clean Energy States Alliance. This is the first of a series of explainers on the impact of 100% clean power on wholesale markets and explores how power markets work today.
Read the white paper here