Now, the final piece of the puzzle. A decade ago, worries were raised about utility holding companies, which are both sellers and buyers of capacity, selling artificially cheap capacity into markets in order to drive down prices, from which they would then benefit. To remedy this potential use of buyer-side (monopsony) power, FERC added a tool to its kit: the Minimum Offer Price Rule (MOPR), which forces resources owned by the holding companies in question to meet at least a certain minimum bid price in capacity markets.
It was meant to be a surgical tool, used in clear cases of buyer-side market manipulation, almost entirely limited to natural gas plants. In 2011, FERC specifically said that renewable resources are not good examples of buyer-side attempts to suppress prices.
This is a good thing for everyone except the owners of those plants. But those gencos, and the utility holding companies that own them, have lots of influence over RTOs and ISOs. And they have been complaining to market administrators that they are being beat in capacity auctions because clean energy has an unfair advantage. Both renewables and nuclear power are subsidized in various ways by state energy policies that, for instance, require utilities to procure a certain amount of their power from renewables. Those policies suppress prices, they argue, and thus subsidized renewables and nuclear ought to be subject to the MOPR.
Some RTOs and ISOs have found this argument convincing and have appealed to FERC to be allowed to apply the MOPR to clean energy resources supported by state policies. Last year, when ISO New England made the request, FERC granted it, and endorsed the broader use of MOPRs: “Absent a showing that a different method would appropriately address particular state policies, we intend to use the MOPR to address the impacts of state policies on the wholesale capacity markets.” (Note here: FERC’s explicit intent is to “address particular state policies.”)
The story starts with PJM Interconnection, a grid operator responsible for balancing power in a region spanning 13 states, from Illinois to Delaware. PJM runs a capacity market, with annual auctions to secure enough generation to cover peak demand several years into the future. Utilities bid on these contracts based on their cost to provide power.
However, some generators in recent years have complained that they were losing to lower bids from renewables and nuclear in some places, on the basis that those sources can benefit from state subsidies. Renewables only claimed a very small slice of the pie in the last auction, but generators were concerned this would grow.
A mechanism existed in the capacity market design to account for the possibility of artificially low bids—the “minimum offer price rule,” or MOPR. In the case of an artificially low bid, an alternative higher bid would be calculated and used in its stead. The FERC took up the issue of deciding whether all generators subject to a subsidy from states should get the MOPR treatment.
There is a lot of people in "green" energy business that are essentially just rent seekers, they add no value nor do they make energy greener. A classic example of this the highly hyped "subscribe to a solar farm" business and "community choice aggregation".
Today marks 54 years since the Great 1965 Blackout. The power didn't go instantly, instead the frequency of the alternating current dropped as parts of the grid failed and remaining generators still online tried to crank out sufficient current to keep the lights running. As radio stations were using tape decks back then, as the frequency of the alternating current slowed, you can actually hear the tape recording of Jonathan King's "Everybody's Gone to the Moon" slow down. It was a perfect song to be playing on that night, because it was a full moon.
I often wonder if low cost thyristors existed in the first half of the century to produce buck and boost converters if the electrical grid would use direct current. High voltage DC doesn’t suffer from impedance, although it is more dangerous to touch as there is no zero point for seized muscle of a human to release themselves from it. High voltage DC is also much more difficult to break with a mechanical switch, due to a lack of zero point to prevent arcing, which is why they usually use thyristors rather than mechanical switches to break DC current.
