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Market Design

The Brattle Group has unparalleled experience analyzing and designing wholesale electricity markets. We support clients around the globe with their most challenging market design issues.

Our clients include system operators, regulators, policymakers, and market participants. In North America, we have played a role in nearly all major market design initiatives over the past several years. Internationally, we support clients throughout Europe, Asia, and Australia.

Much of our recent work focuses on new market design challenges posed by growth in renewable generation and carbon reduction goals. We design market-based ways to achieve clean energy goals. We work with ISOs to better enable both capacity markets and energy-only markets to support resource adequacy and operational reliability in traditional and low-carbon systems. We also assist clients in efforts to enhance the flexibility of the system through improved design of energy and ancillary service markets, through geographic expansion of regional transmission organizations and coordination with neighbors, through more effective utilization of flexible resources such as energy storage, and through improved integration of demand response and distributed generation.

Areas of Expertise

Engagements
REPRESENTATIVE ENGAGEMENTS

Below is a list of representative engagements for our Market Design practice.

Incorporating state environmental policy goals into wholesale electricity markets
For the New York Independent System Operator (NYISO), we are currently evaluating options for implementing carbon pricing in the generation dispatch and settlement, with border adjustments to prevent “leakage” to other states. We are assessing economic efficiencies, emissions abatement, and customer costs compared to less market-oriented approaches. Our work includes evaluating customer cost impacts, and options for preventing leakage of emissions to other states. We also assess how such an approach supports the state’s objectives and interacts with the Regional Greenhouse Gas Initiative (RGGI) and other existing policy instruments.

Additionally, for a consortium of stakeholders in New England, we are currently developing market-based approaches to meeting states’ clean energy objectives, as part of the Integrating Markets and Public Policy (IMAPP) process. One idea we have developed that is gaining attention beyond New England is a proposed auction where candidate resources compete based on the amount of carbon emissions they will actually be able to displace.

Development of market designs for resource adequacy
For several of the major RTOs internationally, Brattle has critiqued or proposed innovations to the market structures to ensure continued supply adequacy in PJM, ERCOT, ISO New England, MISO, California, Ontario, Alberta, Western Australia, Italy, and Greece. We’ve conducted periodic reviews of the markets’ performance and developed potential improvements in the market designs.
Benefits and costs of a regional energy market
In 2016, Brattle experts led a team of multiple consulting companies to help California ISO evaluate ISO regionalization and transitioning the Western Interconnection into a locational marginal cost-based full “Day-2” energy market with centralized optimized day-ahead unit commitment and real-time dispatch. Our role included using the PSO model (a chronological LMP model with very detailed representation of short time interval operations and uncertainties) to develop West-wide nodal production cost simulations for 2020-30 to assess impacts on ratepayers, emissions, grid operations, and the ability to integrate large amounts of variable renewable generation across the region. We also analyzed the findings of other regional markets that have gone through similar or parallel transitions, reviewing two dozen ex-post and ex-ante studies of the costs and benefits of regionalization, of transitioning from zonal to nodal market design, and migrating from a real-time imbalance market to a full day-ahead market with optimized unit commitments and ancillary services markets. Our work culminated in a public report and several presentations to stakeholder groups across the West and in California. It provided the analytical foundation for active ongoing multi-state discussions about ISO regionalization.
Cost-benefit analysis of ERCOT’s proposed Future Ancillary Services design
Brattle evaluated the economic benefits of the Electric Reliability Council of Texas’ (ERCOT) proposed Future of Ancillary Services (FAS) market design. ERCOT proposed FAS to efficiently maintain grid reliability as traditional generation is replaced by wind and solar PV generation and as new technologies (e.g., advanced batteries) offer new ways to provide ancillary services. The proposed design would have unbundled ancillary services and fine-tuned the service requirements to system conditions and resource capabilities. The report found that FAS would have offered economic benefits on the order of ten times the implementation costs, improved system reliability, and provided greater flexibility for meeting reliability needs as system conditions and resource capabilities evolve.
Experts
Publications
Presentation
Hello World: Alberta's Capacity Market
March 18, 2018
Presented at the 2018 IPPSA Conference

This presentation provides an update on the policy framework and draft proposal of Alberta’s new electricity market.

Report
Market Power Screens and Mitigation Options for AESO Energy and Ancillary Service Markets
January 26, 2018
Prepared for the Alberta Electric System Operator (AESO)
Presentation
A Dynamic Clean Energy Market in New England
November 2017
Prepared by The Brattle Group and Coalition Partners (Conservation Law Foundation, Brookfield Renewable, NextEra Energy Resources, National Grid, and Robert Stoddard)
Report
Near-Term Reliability Auctions in the NEM: Lessons from International Jurisdictions
August 23, 2017
Kathleen Spees, Samuel A. Newell, David Luke Oates, Toby Brown, Neil Lessem, Daniel Jang, and John Imon Pedtke
Prepared for the Australian Energy Market Operator (AEMO)
Presentation
Flexibility Enhancements: Alberta Needs and Experience from Other Jurisdictions
August 15, 2017
Prepared for Alberta Electricity System Operator
Report
Pricing Carbon into NYISO’s Wholesale Energy Market to Support New York’s Decarbonization Goals
August 10, 2017
Prepared for the New York Independent System Operator (NYISO)
The study, prepared for the New York Independent System Operator (NYISO), finds that adding a carbon charge into the wholesale energy market could improve the state’s ability to meet its decarbonization goals cost-effectively.
Presentation
Advancing Past “Baseload” to a Flexible Grid: How Grid Planners and Power Markets Are Better Defining System Needs to Achieve a Cost-Effective and Reliable Supply Mix
July 28, 2017
Presented to the Senate Energy & Natural Resources Committee
Article
How Wholesale Power Markets and State Environmental Policies Can Work Together
July 10, 2017
Published in Utility Dive
Report
Advancing Past "Baseload" to a Flexible Grid: How Grid Planners and Power Markets Are Better Defining System Needs to Achieve a Cost-Effective and Reliable Supply Mix
June 26, 2017
Prepared for the Natural Resources Defense Council (NRDC)

The report examines why traditional “baseload” power plants, such as coal and nuclear, are becoming less economical, why their ability to produce power continuously is less essential in today’s supply mix, and why operational flexibility is an increasingly important ingredient for a cost-effective supply of electricity.

Article
Do Manufacturing Firms Relocate in Response to Rising Electric Rates?
June 2017
Published in Energy Regulation Quarterly, Volume 5, Issue 2
This article investigates whether U.S. industrial manufacturing customers faced with rising electric rates relocate to lower-cost regions.
Article
Reforming Ontario’s Wholesale Electricity Market: The Costs and Benefits
June 2017
Published in Energy Regulation Quarterly, Volume 5, Issue 2
This article provides a review of a recent report authored by Brattle economists examining the net benefit that Ontario could realize through implementation of a locational energy market, improving the system’s operating flexibility, and the introduction of an incremental capacity auction for maintaining resource adequacy.
Report
Comments of Dr. Samuel Newell to the Federal Energy Regulatory Commission Regarding State Policies and Wholesale Markets Operated by ISO New England Inc., New York Independent System Operator, Inc., and PJM Interconnection, L.L.C.
May 02, 2017
Prepared for the FERC Technical Conference
Dr. Newell's comments describe how wholesale power markets and state policies can work together to achieve decarbonization objectives and reliability objectives at a low cost.
Report
Market Power Mitigation Mechanisms for the Wholesale Electricity Market in Western Australia
November 01, 2016
Prepared for the Public Utilities Office of the Government of Western Australia's Department of Finance

The report evaluates mechanisms for mitigating market power in the reformed wholesale energy market scheduled for July 2017 implementation in Western Australia’s South West Interconnect System.

Report
Senate Bill 350 Study: The Impacts of a Regional ISO-Operated Power Market on California
July 12, 2016
Prepared for the California Independent System Operator. Co-authored by members of The California Independent System Operator, Energy and Environmental Economics, Inc., Berkeley Economic Advising and Research, LLC, and Aspen Environmental Group.
Presentation
The Future of Wholesale Electricity Market Design with the Growth of Low-Carbon Generation
June 08, 2016
Presented at the Energy Bar Association's (EBA) 2016 Annual Meeting & Conference
Report
Benefits of the Southwest Intertie Project-North (SWIP North)
March 31, 2016
Prepared for Great Basin Transmission, LLC
Report
Western Australia's Transition to a Competitive Capacity Auction
January 29, 2016
Kathleen Spees, Samuel A. Newell, and Colin A. McIntyre
Prepared for EnerNoc
Report
Cost-Benefit Analysis of ERCOT’s Future Ancillary Services (FAS) Proposal
December 21, 2015
Prepared for the Electric Reliability Council of Texas (ERCOT)
Presentation
PJM Capacity Auction Results and Market Fundamentals
September 18, 2015
Prepared for the Bloomberg Analyst Briefing
Report
Lake Erie Connector Market Assessment Report
May 2015
Prepared for ITC Lake Erie Connector LLC
Report
Stakeholder-Driven Scenario Development for the ERCOT 2014 Long-Term System Assessment
September 30, 2014
Prepared for ERCOT
Report
Third Triennial Review of PJM’s Variable Resource Requirement Curve
May 15, 2014
Johannes P. Pfeifenberger, Samuel A. Newell, Kathleen Spees, Ann Murray, and Ioanna Karkatsouli
Prepared for PJM Interconnection, L.L.C.
Report
Cost of New Entry Estimates for Combustion Turbine and Combined Cycle Plants in PJM
May 15, 2014
Samuel A. Newell, Michael Hagerty, Kathleen Spees, Johannes P. Pfeifenberger, Quincy Liao, Christopher D. Ungate, and John Wroble
Prepared for PJM Interconnection, L.L.C.
Report
Estimating the Economically Optimal Reserve Margin in ERCOT
January 31, 2014
Samuel A. Newell, Kathleen Spees, Johannes P. Pfeifenberger, Ioanna Karkatsouli, Nick Wintermantel, and Kevin Carden
Prepared for The Public Utility Commission of Texas
Report
Developing a Market Vision for MISO - Supporting a Reliable and Efficient Electricity System in the Midcontinent
January 27, 2014
Prepared for the Midcontinent Independent System Operator, Inc. (MISO)
Article
Capacity Markets — Lessons Learned from the First Decade
September 2013
Published in Economics of Energy & Environmental Policy, Vol. 2, No. 2
Report
Potential Implications of the AUC TCM Decision (2013-135) on the Alberta Electricity Market’s Economic Efficiency
May 2013
Johannes P. Pfeifenberger, Judy Chang, and Michael DeLucia
Prepared for Alberta Electric System Operator
Report
Evaluation of Market Fundamentals and Challenges to Long-Term System Adequacy in Alberta’s Electricity Market: 2013 Update
March 2013
Prepared for the Alberta Electric System Operator
News & Knowledge
May 03, 2018
Romkaew Broehm to Present on Market Design at Petroleum Institution of Thailand's Seminar

Brattle Principal Romkaew Broehm will present during the Petroleum Institution of Thailand’s (PTIT) Seminar, taking place May 3, 2018 in Bangkok, Thailand.

April 17, 2018
Frank Graves and Hannes Pfeifenberger to Present at Gulf Coast Power Association's Spring Conference

Brattle Principals Frank Graves and Hannes Pfeifenberger will moderate sessions at the Gulf Coast Power Association’s (GCPA) 32nd Annual Spring Conference, taking place April 17-18, 2018 in Houston, TX.

March 19, 2018
Judy Chang to Present at Independent Power Producers Society of Alberta's Annual Conference

Brattle Principal Judy Chang will present at the Independent Power Producers Society of Alberta’s (IPPSA) 24th Annual Conference, “A Market Reborn,” taking place March 18-20, 2018 in Alberta, Canada.

February 27, 2018
Johannes Pfeifenberger to Present at Electric Reliability Council of Texas' Market Summit

Brattle Principal Johannes Pfeifenberger will present at the 6th annual Electric Reliability Council of Texas’ (ERCOT) Market Summit, taking place February 27 to March 1, 2018 in Austin, TX.

February 27, 2018
Sam Newell to Present at Texas-Germany Bilateral Dialogue on Challenges and Opportunities in the Electricity Market

Brattle Principal Sam Newell will present at the German American Chamber of Commerce of the Southern U.S., Inc.’s (GACC South) event, “Texas-Germany Bilateral Dialogue on Challenges and Opportunities in the Electricity Market,” taking place on February 27, 2018 in Austin, TX.

November 20, 2017
Kathleen Spees to Present at APPrO's Canadian Power Conference

Brattle Principal Kathleen Spees will present at the Association of Power Producers of Ontario’s (APPrO) 29th Annual Canadian Power Conference and Networking Centre, taking place November 20-21, 2017 in Toronto.

October 23, 2017
Roger Lueken to Present at Pre-Summit Briefing on Navigating PJM’s Capacity Market

Brattle Associate Roger Lueken will present at the Pre-Summit Briefing of the Mid-Atlantic Power Market Summit, taking place October 23-25, 2017 in Philadelphia, PA.

June 26, 2017
Brattle Economists Recommend Moving beyond "Baseload" Generation for Planning and Operating Today's Electric Grid

Brattle economists have released a report explaining how the use of the term “baseload” generation is no longer useful for the purposes of planning and operating today’s electricity system.

June 20, 2017
Brattle Economists Contribute Two Articles to Energy Regulation Quarterly

Brattle economists have contributed two articles to the current issue of Energy Regulation Quarterly, a journal that provides a forum for debate and discussion on issues surrounding the regulated energy industries in Canada.

May 02, 2017
Brattle Economist Optimistic About Role of Wholesale Power Markets in Helping States Implement Energy Policy Goals

In responses to questions posed at today’s Federal Energy Regulatory Commission (FERC) Technical Conference, Brattle Principal Dr. Samuel Newell describes how wholesale power markets and state policies can work together to achieve decarbonization objectives and reliability objectives at a low cost.

May 02, 2017
Sam Newell to Present on Wholesale Competitive Markets at FERC Technical Conference

Brattle Principal Sam Newell will present at the Federal Energy Regulatory Commission’s (FERC) Technical Conference on “State Policies and Wholesale Markets Operated by ISO New England Inc., New York Independent System Operator, Inc., and PJM Interconnection, L.L.C.,” taking place May 1-2, 2017 in Washington, DC.

April 26, 2017
Ontario Market Renewal Effort Could Provide Up to CAD $5.2 Billion in Customer and Supplier Benefits, According to Brattle Economists

Brattle economists have authored a report that concludes the Independent Electricity System Operator’s (IESO) proposed Market Renewal efforts to reform the province’s wholesale electricity markets could provide significant benefits to customers and suppliers in Ontario.

April 03, 2017
Kathleen Spees to Present at EBA 2017 Annual Meeting and Conference

Brattle Principal Kathleen Spees will present at the Energy Bar Association’s (EBA) 2017 Annual Meeting & Conference, taking place April 3-4, 2017 in Washington, DC.

March 14, 2017
Judy Chang to Present on Evolution of Alberta’s Market Design at IPPSA Conference

Brattle Principal Judy Chang will present at the Independent Power Producers Society of Alberta’s (IPPSA) 23rd Annual Conference, taking place March 12-14, 2017 in Alberta, Canada.

November 01, 2016
Report by Brattle Economists Reviews Market Power Mitigation Mechanisms for Wholesale Electricity Market in Western Australia

A report authored by Brattle economists evaluates mechanisms for mitigating market power in the reformed wholesale energy market scheduled for July 2017 implementation in Western Australia’s South West Interconnect System.

September 12, 2016
Brattle Consultants Contribute to Significant Win for the State of California on Energy Crisis Tariff Violations

Testimony by Brattle consultants contributed to a favorable outcome for the State of California in a recent decision by the U.S. Court of Appeals for the Ninth Circuit, which upheld a ruling by the Federal Energy Regulatory Commission (FERC) finding that several electric power sellers committed tariff violations during the California Energy Crisis in the summer of 2000.

July 12, 2016
Study Co-Authored by Brattle Economists Examines Impacts of a Regional Power Market in the Western U.S. for California ISO

Brattle economists have co-authored a new study that provides a comprehensive examination of the impacts of transforming the California Independent System Operator into a multistate, regional ISO.

May 05, 2016
Open Letter by Brattle Economists Offers Responses to U.S. Senators’ Questions Concerning the Efficacy of U.S. Electricity Capacity Markets

Hannes Pfeifenberger, Sam Newell, Kathleen Spees, and Roger Lueken have authored an open letter in response to a series of questions on the state of U.S. electricity capacity markets posed by members of the United States Senate’s Committee on Energy and Natural Resources.

April 13, 2016
Brattle Consultants Contribute to Significant Win for the State of California on Energy Crisis Long-Term Contracts

Based on evidence presented by Brattle consultants, a FERC Administrative Law Judge issued a ruling that found that the Mobile-Sierra doctrine does not protect two long-term wholesale electricity contracts entered into during the Western Energy Crisis in 2001.

February 24, 2016
Brattle Report Cited in Utility Dive Article on CAISO Study of New Regional Electricity Market

A Brattle report was recently featured in a Utility Dive article discussing the California Independent System Operator’s (CAISO) study to assess the potential of a regional electricity market in the West.

December 23, 2015
Report by Brattle Economists Finds ERCOT’s Future Ancillary Services Market Design Provides Economic Benefits and Improved System Reliability

A new report authored by Brattle economists evaluates the economic benefits of the Electric Reliability Council of Texas’ (ERCOT) proposed Future Ancillary Services (FAS) design.

May 20, 2015
Brattle to Sponsor Symposium on Market Power and Market Manipulation in Energy Markets

The Brattle Group will be sponsoring the upcoming program, “A Symposium on Market Power and Market Manipulation in Energy Markets," taking place Wednesday, May 20th, 2015 and hosted by the Center for Business & Public Policy at Georgetown University's McDonough School of Business.

July 25, 2014
Peter Fox-Penner to Participate in Joint Institute for Strategic Energy Analysis Regional Clean Energy Leadership Forum

Peter Fox-Penner has been selected to participate on a panel for the upcoming Joint Institute for Strategic Energy Analysis (JISEA) conference, “Synergies of Natural Gas and Renewable Energy: 360 Degrees of Opportunity.”