Wholesale Electricity Market Design for Rapid Decarbonization

This executive summary discusses the need for wholesale electricity market reform to accommodate the transition from large, fossil-fuel-burning power plants to cheaper, smaller, carbon-free resources. It introduces two proposed pathways for market evolution: a decentralized approach emphasizing bilateral contracting and a hybrid approach combining long-term markets with short-term spot markets.

• Current wholesale electricity market rules were designed for a system characterized by large central power plants and inflexible consumer demand, but the resource mix is shifting as carbon-free resources replace fossil fuel-burning plants.
• One proposed pathway for market evolution is a decentralized approach that maintains current energy markets while increasing robust bilateral contracting between wholesale buyers and sellers. This structure, combined with low-carbon investment policy, is suggested to ensure resource adequacy and rapid decarbonization at the lowest reasonable cost to consumers.
• An alternative proposed pathway is a hybrid solution that integrates long-term markets with existing short-term spot markets to encourage investment in zero-carbon resources and complementary clean energy technologies.

APA

Marcacci, S. (2019). Wholesale Electricity Market Design for Rapid Decarbonization. Energy Innovation. https://energyinnovation.org/report/wholesale-electricity-market-design-for-rapid-decarbonization/

Chicago

Marcacci, Silvio. Wholesale Electricity Market Design for Rapid Decarbonization. Energy Innovation, 2019. https://energyinnovation.org/report/wholesale-electricity-market-design-for-rapid-decarbonization/.

Wikipedia

{{cite report |last1=Marcacci |first1=Silvio |title=Wholesale Electricity Market Design for Rapid Decarbonization |publisher=Energy Innovation |date=25 June 2019 |url=https://energyinnovation.org/report/wholesale-electricity-market-design-for-rapid-decarbonization/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{marcacci2019wholesale, author = {Marcacci, Silvio}, title = {{Wholesale Electricity Market Design for Rapid Decarbonization}}, institution = {Energy Innovation}, year = {2019}, month = jun, url = {https://energyinnovation.org/report/wholesale-electricity-market-design-for-rapid-decarbonization/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }