How States, Cities, And Customers Can Harness Competitive Markets To Meet Ambitious Carbon Goals Through A Forward Market For Clean Energy Attributes
Date Published: September 2019
Authors: Kathleen Spees, Samuel A. Newell, Walter Graf, Emily Shorin
This paper discusses a market design structure first proposed by the Brattle Group and NRG to procure clean energy attributes through a competitive forward auction. Similar to a REC auction, the Forward Clean Energy Market (FCEM) auctions Clean Energy Attribute Credits (CEACs) through a three-year forward market. Each CEAC is attributed to 1 MWh of clean energy. The market is a technology-neutral, centralized competition process for all zero emission technologies. Most resources that clear the auction receive a one-year price for CEACs, while new projects receive a 7-year set price to attract low-cost financing. The mechanism is further unique in that it allows corporations, states, or other organizations to submit demand bids and purchase CEACs through the market. The solution is covered in significant detail in the report and is seen as a politically feasible alternative to carbon pricing.