Electricity markets are working to provide consumers with reliable, affordable electricity.
Thanks to technological advances, wind-turbine farms can now compete in markets to provide essential electric reliability services, American Wind Energy Association (AWEA) CEO Tom Kiernan explained in congressional testimony this week at a hearing on grid reliability before the House Energy and Commerce Committee.
Grid reliability and resiliency are goals everyone can support. Prior efforts underway at the Federal Energy Regulatory Commission (FERC) and by market operators are rightly focused on market-based solutions to better compensate generators for providing those essential services.
AWEA strongly agrees with other witnesses on today’s panel who also endorsed market-based solutions in their submitted testimony, including the American Petroleum Institute, Solar Energy Industries Association, Energy Storage Association, Natural Resources Defense Council, National Hydropower Association, and others.
In contrast, we are concerned that the Department of Energy’s recent proposal to provide payments to specific resources based on arbitrary requirements is anti-competitive, and threatens to undermine electricity markets that are bolstering reliability and saving consumers billions of dollars per year.
“We support the objective of maintaining a reliable and resilient grid,” said Kiernan, “which is best achieved through free and open markets, with a focus on needed reliability services – not sources – and a program to promote transmission infrastructure.”
Kiernan outlined several major policy recommendations in his testimony:
- Rely on competitive markets that reward performance to ensure affordable and reliable electricity;
- Focus on reliability needs, not generation sources; and
- Promote transmission infrastructure investment to improve resilience and allow consumers greater access all low-cost forms of energy.
Electricity markets are working to provide consumers with reliable, affordable electricity. As the North American Electric Reliability Corporation (NERC) CEO recently testified: “The state of reliability in North America remains strong, and the trend line shows continuing improvement year over year.”
Technological advances and innovation by over 100,000 U.S. wind workers enable wind farms today to provide the grid reliability services traditionally provided by conventional power plants. As NERC’s CEO emphasized in its testimony at last month’s hearing, “variable resources significantly diversify the generation portfolio and can contribute to reliability and resilience in important ways.”
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