Stanford Impact Labs awards PESD stage one funding

Stanford Impact Labs awarded the Program on Energy and Sustainable Development and partners a two-year stage one investment for the project “Building a Coalition for Improved Resource Adequacy Policy in a High-Renewables West.”

The project aims to build a coalition of policymakers, regulators, and ratepayers in Texas and the West (including western Canadian provinces) to collectively forge a path forward on long-term resource adequacy that protects consumers from adverse cost and reliability impacts as wind and solar shares continue to grow.

Project Description:

Jurisdictions in North America and beyond are building massive amounts of new renewable energy generation in support of the energy transition. For example, two leaders in renewables deployment, Texas and California, both hit generation shares from wind plus solar of roughly 26% in 2022 (compared with less than 8% for both states as of 2012). However, electricity market regulation isn’t keeping pace with this rapid technological shift. Notably, legacy regulatory strategies for ensuring there are sufficient energy resources to meet demand—what is known as “long-term resource adequacy”—no longer work well with such a high (and growing) share of resources that are intermittent. This lag in regulatory adaptation has contributed to damaging adverse reliability events—most significantly the crisis in Texas in February 2021 following Winter Storm Uri.

Crises present opportunities for change, but regulators are under-resourced compared with the market participants they regulate. This asymmetry can skew new rulemakings in favor of generators rather than ratepayers. The goal of this Impact Lab is to build a coalition that empowers regulators to translate the latest scientific knowledge about long- and short-term market design for high-renewables grids into regulatory policies that benefit consumers. The Western Interstate Energy Board (WIEB) will help us convene a broad group of regulators (including our partners at the Alberta Utilities Commission), ratepayer advocate groups (including our partners at the California Public Utilities Commission’s Public Advocates Office), and system operators (including our partners at the Alberta Electric System Operator).

By learning from each other about the common problems they face, engaging in simulations to prototype better regulatory mechanisms, and jointly developing “consumer-first” approaches to ensuring long-term resource adequacy, members of this coalition will gain the knowledge to model improved policy for jurisdictions everywhere that are grappling with the challenges of the new wind and solar paradigm.