Demystifying Electricity Markets

Jerry Elmer

Conservation Law Foundation and the Boston Green Ribbon Commission have just published a Primer designed to demystify wholesale electricity markets. You can access the full text of the newly published document, Electricity Markets Primer.

In New England, the United States, and the world, the making of electricity is one of the largest sources of carbon emissions. As a result, environmentalists in general, and climate-change activists in particular, have sought to close fossil-fuel-burning power plants and promote renewable energy. You can learn more about CLF’s highly successful coal-free New England campaign, here.

The process of moving from a fossil-fuel economy to an economy based on renewable energy is not easy, and one of the complicating factors is that the world of wholesale and retail electricity markets is really complicated. To make matters worse, too many people who work in the field of electricity markets are given to the use of obscure words, highly technical phrases, and a dizzying array of weird acronyms. Normal people find their eyes quickly glazing over when experts spout jargon like: RPS, DR, DG, FPA, bid stack, price taker, Forward Capacity Market, and the Auction.

This new Primer is designed to address this problem. In ten chapters, we describe and explain the highlights of how electricity markets work here in New England. More specifically, we do so in language that any lay person can understand. We explain what the acronyms mean, how the electricity markets work, and where and how environmentalists can make – and are making! – a real difference.

In short, we are trying to demystify the world of energy markets.

I was honored to have worked on this Primer, and I am grateful to several CLF colleagues who drafted chapters of this Primer: Sandra Levine (Chapter VII: Energy Efficiency); Greg Cunningham (Chapter IX: Transmission); and Caitlin Peale Sloan (Chapter X: Natural Gas). I am also grateful to one of CLF’s 2015 Cavers interns, Taylor Hay, for excellent editing; and to Ruth Price, CLF’s Office Manager in Maine, for assistance with design and layout.

Focus Areas

Climate Change

Places


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