On a recent trip to Germany to study the country’s energy policy, the phrase “energy transition,” or “energiewende” as the Germans say, was on everyone’s mind.
Dealing With the Duck
Designing markets to accommodate variable resources.
the proper incentives for flexibility. We need to make markets larger and faster, treat demand-side options the same as supply-side, open the market to more participants, and buy the services needed to run the grid in a more renewable future. This can include paying for fast-ramping services; creating more accurate price signals that mean more money for resources that are flexible and fast-acting and less money for those that aren’t; and allowing demand response to bid into energy, services, and capacity markets.
Once we match the way money flows in the markets more accurately to the needs of the system, the move toward a clean energy future will be much smoother, cheaper, and more secure.
1. The widely circulated “duck curve” in actuality represents a “shoulder period” day and is therefore, over the near term, a somewhat extreme case, however it amply illustrates the fundamental issue.