An energy market proposal by Southern utilities would produce the lowest cost savings and emission reductions of available options, and would imperil decarbonization goals, according to a new report.
The study -- conducted by Vibrant Clean Energy on behalf of the American Council on Renewable Energy -- compared the proposed Southeast Energy Exchange Market to an optimal energy imbalance market (EIM) and regional transmission organization (RTO), finding an EIM would save $111 billion by 2040, while an RTO would save $119 billion.
Additionally, modeling from the study projects that an EIM and RTO would reduce carbon emissions by 67 and 70%, respectively, over the same time period, compared to just 30% under the SEEM framework.
“The southeastern United States is one of the largest regions in the country without an organized wholesale power market, and these modeling results show that an EIM or RTO operating in the proposed SEEM footprint would generate significantly more cost savings and emission reductions than the SEEM framework, while also creating more electricity sector jobs over the next 20 years,” ACORE President and CEO Gregory Wetstone said. “Setting up a real-time energy market in the Southeast is a good economic option for the region that would also reduce climate impacts, improve local air quality and give utilities the best shot at meeting their decarbonization goals.”
The Federal Energy Regulatory Commission (FERC) is evaluating the SEEM proposal, which is backed by Duke Energy, Southern Company, Dominion Energy, and TVA, among others. The 15-member utilities claim that the new bilateral market would “materially benefit” the approximately 5 million households within the proposed coverage region by enhancing opportunities for competition and access to lower-cost energy.
Utilities would be unlikely to reach 100% decarbonization targets under SEEM, according to the new report. Duke Energy Carolinas and Duke Energy Progress would reduce their emissions by 16.7% and 21%, respectively, by 2040, while Southern Company would reduce its emissions by 15%.Duke Energy, Southern Company, Dominion Energy, and TVA are among the 15 member utilities behind the Southeast Energy Exchange Market (SEEM).
The study highlights an RTO as producing the greatest cost savings and emissions reductions, when compared to the SEEM framework, through expanded transmission and capacity. An RTO would also create more than 1 million jobs, the authors wrote.
Jeff Dennis, managing director and general counsel for Advanced Energy Economy, joined Renewable Energy World’s John Engel to discuss the latest back-and-forth between SEEM and FERC, and what comes next. Before joining AEE, Dennis spent over a decade at FERC.