Grid regionalization could change how and where renewables are built, bought and sold

As the California legislature debates the state’s energy future, a new study takes a fresh look at the pros and cons of creating a Western regional grid, and illuminates the complexities that have helped stall bills addressing the issue over the past three years. Grid regionalization could change how and where renewables are built, bought and sold, with ramifications for energy markets in California and across the West.

“Regionalization raises a lot of issues, and we hope policymakers and other Californians who have questions about it can find answers in our new report,” said F. Noel Perry, businessman and founder of Next 10. “A carefully crafted regional transmission organization could be a game-changer for clean energy in the West. But as always, the devil is in the details.”

The new report, A Regional Power Market for the West: Risks and Benefits, lays out arguments for and against expanding the western electricity market through the formation of a regional independent system operator (ISO). ISOs act as air traffic controllers for electricity, independently coordinating the planning and distribution of energy in a given area. Regional ISOs are common in most of the U.S., but in the West, the region is divided into a patchwork of individual operators, including the California Independent System Operator (CAISO). Pending legislation would set the rules for how California utilities could join a regional market.

Supporters of regionalization — including Gov. Brown, CAISO, and many clean energy industry associations and environmental groups — say setting up a vast regional market would accelerate the scale-up of clean energy while reducing operating costs, enabling California to meet its climate goals even as energy bills come down. Detractors, including labor and consumer groups, say that a Western RTO could reduce the state’s control over clean energy and climate policies and shift construction jobs to other states.

See the full article, here.

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