IEEE Power & Energy Magazine - November/December 2019 - 66

wholesale locational marginal price, even some in which that
price reflects additional distribution system constraints and
operation. Ensuring that these two systems operate without
seams and that transmission and distribution system services
are provided by whomever can provide them most efficiently
will be crucial to the success of future market scenarios.
Other, more substantial, market structure changes have
been proposed, such as configuration markets. This concept
suggests that, in a scenario with massive renewables supplying energy, the revenues of energy markets may be insignificant with regard to incentivizing the needs of this future power
grid. The characteristics that require incentives are investing
in efficient configurations of renewables, flexible resources,
and infrastructure to accommodate the needs of this future
scenario. The configuration market would be conducted periodically (e.g., every five years) using optimization techniques
to find the most efficient and feasible configuration. All participants that pass through the configuration market would be
eligible to recover costs, as long as they meet established performance criteria. This design is similar to existing capacity
markets that expand significantly to include attributes beyond
capacity that may be needed on the system, while also including the infrastructure of the future grid to deliver power.
One additional structure change familiar to those who
have been part of electric power systems for decades is the
move back toward a fully regulated system. If the benefits of
competition from these future power systems are not realized and monopolies of power supply and reliability services
are seen as not preventable, a regulated system may be feasible. That does not make things any simpler; the way that the
system is planned and operated would continue to be just as
complex. The decisions, whether made by one entity or multiple parties, would use the same engineering and economic
principles used for investments and operational strategies
for this future resource fleet, which may look very different
from what it does today, with poor decisions still resulting in
inefficient or unreliable outcomes.

Summary
There has been a significant evolution in the world's electricity markets, just as there has been in their constituent technologies, operating procedures, and makeup. There are still
many questions about how these markets may be structured
to incentivize the investment and operational decisions that
will lead to economic and reliable outcomes on very high
VRE systems. There is no "one size fits all" in electricity
market design, which is a recurring theme. There are many
different future scenarios, including those that may lead to
lower carbon emissions. A particular market design should
not be chosen because of its scenario rather, the scenario
should result because of the attributes, which were incentivized, and the least-cost solution, which emerged to satisfy
those needs. There are many unknowns, including the continuing evolution of the policy environment and changing
technologies, and many players need to work together to
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help manage this process to ensure a reliable and economical power system in the future.

For Further Reading
E. Ela et al., "Electricity markets and renewables: A survey of
potential design changes and their consequences," IEEE Power & Energy Mag., vol. 15, no. 6, pp. 70-82, Nov./Dec. 2017.
M. Goggin, R. Gramlich, S. Shparber, and A. Silverstein, "Customer focused and clean: Power markets for the
future," Grid Strategies, LLC, Washington, D.C., 2018. [Online]. Available: https://windsolaralliance.org/wp-content/
uploads/2018/11/WSA_Market_Reform_report_online.pdf
B. Gerke G. Gallo, J. Liu, M. A. Piette, and P. Schwartz,
"Shift demand response: A primer," Lawrence Berkeley National Laboratory, Berkely, California, 2018. [Online]. Available: https://gridworks.org/wp-content/uploads/2018/02/
Shift-Demand-Response-Primer_Final_180227.pdf
"Evaluation of wholesale energy price spikes in U.S.
electricity markets," Electric Power Research Institute, Palo
Alto, CA, Rep. 3002013886, 2018.
S. Newell, R. Carroll, P. Ruiz, and W. Gorman, "Cost-benefit
analysis of ERCOT's Future Ancillary Services (FAS) proposal," The Brattle Group, Inc., Boston, MA Dec. 2015. [Online].
Available: http://www.mondaq.com/unitedstates/x/455490/
Oil+Gas+Electricity/CostBenefit+Analysis+Of+ERCOTs+
Future+Ancillary+Services+FAS+Proposal
S. Corneli et al., "Wholesale electricity market design for
rapid decarbonization: Long-term markets, working with
short-term energy markets," June 2019. [Online]. Available:
https://energyinnovation.org/wp-content/uploads/2019/
07/ W holesale-Electricity-Market-Design-For-Rapid
-Decarbonization-Long-Term-Markets-Working-WIth-Short
-Term-Energy-Markets.pdf

Biographies
Erik Ela is with the Electric Power Research Institute, Palo
Alto, California.
Farhad Billimoria is with the Australian Electricity
Market Operator, Melbourne.
Kenneth Ragsdale is with the Electric Reliability Council of Texas, Austin.
Sai Moorty is with the Electric Reliability Council of Texas,
Austin.
Jon O'Sullivan is with Eirgrid, Dublin, Ireland.
Rob Gramlich is with Grid Strategies, LLC, Washington,
D.C.
Mark Rothleder is with the California Independent System Operator, Folsom, California.
Bruce Rew is with the Southwest Power Pool, Little
Rock, Arkansas.
Matti Supponen was with the European Commission, Brussels, Belgium (retired).
Paul Sotkiewicz is with E-Cubed Policy Associates,
Gainesville, Florida.
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