How can electricity market operators accommodate state and federal greenhouse gas reduction policies in their market design and operation?
This Quick Insight summarizes a new EPRI technical report published in August 2024 that describes how accounting for and valuing carbon dioxide (CO2) emissions — and more broadly greenhouse gas emissions (GHGs) — has been implemented in wholesale power markets in the United States and the European Union (EU). The power markets discussed include the CAISO, CAISO’s WEIM, NYISO, SPP’s Markets+ in the U.S. and the wholesale power market in the EU. It explores how these markets have tried to address the technical challenges associated with implementing carbon pricing, particularly when the footprint of a wholesale power market overlaps with different carbon polices across the footprint. This report also describes the challenges associated with accounting for GHG emissions in the context of wholesale power markets in which electricity is centrally dispatched to end-use customers.
Authors Adam Diamant