Optimizing Energy Efficiency Benefits in Wholesale Electricity Markets: Brattle Consultants Author Two Reports for AEE

Brattle consultants have authored two reports for Advanced Energy Economy (AEE) that highlight opportunities to ensure that energy efficiency is enabled to compete to meet resource adequacy needs in centralized capacity markets operated by regional transmission (RTOs) organizations and independent system operators (ISOs).

“The Benefits of Energy Efficiency Participation in Capacity Markets” is authored by Principal Kathleen Spees, Senior Associate Walter Graf, and Principal Johannes Pfeifenberger. The report examines how energy efficiency can be most effectively accounted for in regional resource adequacy or capacity market structures, providing recommendations for how to best incorporate resources as supply-side resources that can offer into the capacity market and compete head-to-head with demand response, generation, and batteries. Enabling supply-side accounting offers a number of advantages by gaining binding commitments for delivering accurately measured and verified load reductions; improving the accuracy of regional load forecasts; removing barriers to entry for innovative energy efficiency service providers; creating more opportunity for cost-effective investments in energy efficiency; and reducing customer costs.

The second report, “Enabling Cost-Effective Energy Efficiency in the Midcontinent ISO Resource Adequacy Construct,” authored by Dr. Spees, Mr. Pfeifenberger, and Brattle Research and Proposal Specialist Peter Jones, focuses on the MISO energy market, where the resource adequacy construct is being reviewed and updated in light of a changing resource mix and system needs. The report describes opportunities to maximize the value of energy efficiency in the region, recommending that the market continue to rely on supply-side participation and gross resource accounting.  The continued reliance on supply side, gross accounting framework will support the widest range of business models and efficiency measures to contribute to resource adequacy, guiding utilities, customers, and aggregators to develop the most valuable energy efficiency measures across the region.

For more information, and to download the reports, please visit AEE’s website.