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Smart Energy Decisions (Opinion): Competitive Wholesale Markets Unlock Procurement Options—Will the Proposed Southeast Energy Exchange Market Do the Same?

Posted by Caitlin Marquis on Apr 30, 2021

Smart Energy Decisions published AEE’s Caitlin Marquis’ piece on competitive wholesale markets and the SEEM proposal. Read snippets below and the full story here.

The benefits of competitive wholesale markets to customers are generally boiled down to two simple words: cost and reliability. But ask any large buyer of clean energy, and you’ll hear a host of additional reasons why organized, competitive wholesale markets overseen by regional transmission organizations or independent system operators (RTOs/ISOs) make it easier to access clean energy resources. Unpacking what makes wholesale markets work for buyers also helps to explain why buyers have not enthusiastically endorsed the Southeast Energy Exchange Market (SEEM) proposal put forward by a handful of Southeastern utilities.

While there’s no single, simple answer why large buyers support RTO/ISO markets, there are a number of common threads including efficiency and cost savings, better integration of renewable energy, open market access, price transparency, and opportunities for newer technologies like energy storage and distributed energy resources to compete. Drawing on the observations of companies who have experience pursuing advanced energy both within and outside of RTO/ISO markets, it’s clear that RTO/ISO markets offer several important advantages…

It follows logically that bringing organized wholesale markets to regions that don’t currently have them would expand opportunities for corporate procurement by enabling additional renewable and advanced energy contracting options for large customers, expanding opportunities for customer-sited DERs, and increasing advanced energy penetration on the grid.

It might seem safe, therefore, to assume that the Southeast Energy Exchange Market (SEEM) proposal put forward by southeastern utilities would be an instant winner with clean energy buyers, but the response has been much more tempered…

For buyers interested in more wholesale competition, SEEM is a discussion worth following, as are legislative efforts in the West to move from an EIM to a full RTO. Progress won’t be immediate or easy, but moving to full RTOs in the west and southeast would unlock the enormous benefits buyers have seen from RTO/ISO markets in other regions.

Read the full story here.

Topics: Wholesale Markets, AEE In The News