An expert in electricity markets explains why market price signals alone will struggle to incentivize adequate investment in the flexible electricity resources needed for future grid reliability.

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In the 1990s the process of deregulation – or restructuring – of the U.S. electricity system began, leading to the introduction of competition to an industry that had for a century been dominated by vertically-integrated utility monopolies. Today, competitive markets produce two-thirds of the electricity consumed in the country. Yet concern has grown that these modern markets may not be up to the task of driving the types of investment needed to ensure that an ample and reliable supply of clean electricity will be available in the future.

Kelli Joseph, a senior fellow with the Kleinman Center, offers a deep dive into the theory of competitive electricity markets and the role that market price signals play in driving investment in many parts of the United States. She explores the need to incentivize investment in flexible resources essential to the reliability of a grid that is increasingly reliant on natural gas and renewable generation, and discusses how electricity markets and policy might meet the challenges of the energy transition.

Kelli Joseph is a senior fellow with the Kleinman Center for Energy Policy.

Related Content

The Key to Electric Grid Reliability: Modernizing Governance https://kleinmanenergy.upenn.edu/research/publications/the-key-to-electric-grid-reliability-modernizing-governance/ 

Coordinated Policy and Targeted Investment for and Orderly and Reliable Energy Transition https://kleinmanenergy.upenn.edu/research/publications/coordinated-policy-and-targeted-investment-for-an-orderly-and-reliable-energy-transition/ 

Aligning Clean Energy Policy with Grid Reliability https://kleinmanenergy.upenn.edu/podcast/aligning-clean-energy-policy-with-grid-reliability/



Energy Policy Now is produced by The Kleinman Center for Energy Policy at the University of Pennsylvania. For all things energy policy, visit kleinmanenergy.upenn.edu

An expert in electricity markets explains why market price signals alone will struggle to incentivize adequate investment in the flexible electricity resources needed for future grid reliability.
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In the 1990s the process of deregulation – or restructuring – of the U.S. electricity system began, leading to the introduction of competition to an industry that had for a century been dominated by vertically-integrated utility monopolies. Today, competitive markets produce two-thirds of the electricity consumed in the country. Yet concern has grown that these modern markets may not be up to the task of driving the types of investment needed to ensure that an ample and reliable supply of clean electricity will be available in the future.
Kelli Joseph, a senior fellow with the Kleinman Center, offers a deep dive into the theory of competitive electricity markets and the role that market price signals play in driving investment in many parts of the United States. She explores the need to incentivize investment in flexible resources essential to the reliability of a grid that is increasingly reliant on natural gas and renewable generation, and discusses how electricity markets and policy might meet the challenges of the energy transition.
Kelli Joseph is a senior fellow with the Kleinman Center for Energy Policy.
Related Content
The Key to Electric Grid Reliability: Modernizing Governance <a href="https://kleinmanenergy.upenn.edu/research/publications/the-key-to-electric-grid-reliability-modernizing-governance/">https://kleinmanenergy.upenn.edu/research/publications/the-key-to-electric-grid-reliability-modernizing-governance/ </a>
Coordinated Policy and Targeted Investment for and Orderly and Reliable Energy Transition <a href="https://kleinmanenergy.upenn.edu/research/publications/coordinated-policy-and-targeted-investment-for-an-orderly-and-reliable-energy-transition/">https://kleinmanenergy.upenn.edu/research/publications/coordinated-policy-and-targeted-investment-for-an-orderly-and-reliable-energy-transition/ </a>
Aligning Clean Energy Policy with Grid Reliability <a href="https://kleinmanenergy.upenn.edu/podcast/aligning-clean-energy-policy-with-grid-reliability/">https://kleinmanenergy.upenn.edu/podcast/aligning-clean-energy-policy-with-grid-reliability/</a>
 
Energy Policy Now is produced by <a href="http://kleinmanenergy.upenn.edu/">The Kleinman Center for Energy Policy</a> at the University of Pennsylvania. For all things energy policy, visit <a href="http://kleinmanenergy.upenn.edu/">kleinmanenergy.upenn.edu</a>

Energy Policy Now offers clear talk on the policy issues that define our relationship to energy and its impact on society and the environment. The series is produced by the Kleinman Center for Energy Policy at the University of Pennsylvania and hosted by energy journalist Andy Stone. Join Andy in conversation with leaders from industry, government, and academia as they shed light on today's pressing energy policy debates.

Energy Policy Now

Energy Policy Now offers clear talk on the policy issues that define our relationship to energy and its impact on society and the environment. The series is produced by <a href="https://kleinmanenergy.upenn.edu/podcast/">the Kleinman Center for Energy Policy</a> at the University of Pennsylvania and hosted by energy journalist Andy Stone. Join Andy in conversation with leaders from industry, government, and academia as they shed light on today's pressing energy policy debates.

An expert in electricity markets explains why market price signals alone will struggle to incentivize adequate investment in the flexible electricity resources needed for future grid reliability.

Can Competitive Electricity Markets Deliver Reliable Power?

Senator Sheldon Whitehouse discusses the prospects for bipartisan U.S. carbon border fee legislation, and the need to protect the Biden administration’s clean energy and climate achievements.
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(This episode was recorded on March 15, 2024, during Penn Energy Week)

Senator Sheldon Whitehouse has a reputation as an advocate for strong climate policies in Congress. The Rhode Island Democrat gained national attention over a decade ago when he gave the first of more than 290 “Time to Wake Up” climate speeches to date on the floor of the U.S. Senate. Many of the speeches were delivered at times when the prospects were bleak for significant leadership from Washington on climate and clean energy issues.

Yet the past three years have been very different. Through the passage of the Bipartisan Infrastructure Law and, most pointedly, the Inflation Reduction Act, Congress has made concrete steps to grow domestic clean energy and improve the nation’s climate resilience. Recently, Senator Whitehouse reintroduced a bill that would levy the first carbon border fee on goods imported to the U.S., and effectively reward American industry for its leadership in energy efficiency and emissions reductions.

On the podcast, Whitehouse discusses his plan for a carbon border adjustment. He also considers an upcoming election that will prove critical for continued progress, and that could jeopardize the full realization of recently passed energy and climate laws and the fate of the Biden administration’s related regulatory accomplishments.

Related Content

The Key to Electric Grid Reliability: Modernizing Governance https://kleinmanenergy.upenn.edu/research/publications/the-key-to-electric-grid-reliability-modernizing-governance/ 

Advancing the Social License for Carbon Management in Achieving Net-Zero GHG Emissions https://kleinmanenergy.upenn.edu/research/publications/advancing-the-social-license-for-carbon-management-in-achieving-net-zero-ghg-emissions/ 

Coordinated Policy and Targeted Investment for an Orderly and Reliable Energy Transition https://kleinmanenergy.upenn.edu/research/publications/coordinated-policy-and-targeted-investment-for-an-orderly-and-reliable-energy-transition/



 Energy Policy Now is produced by The Kleinman Center for Energy Policy at the University of Pennsylvania. For all things energy policy, visit kleinmanenergy.upenn.edu

Senator Sheldon Whitehouse discusses the prospects for bipartisan U.S. carbon border fee legislation, and the need to protect the Biden administration’s clean energy and climate achievements. ---
(This episode was recorded on March 15, 2024, during Penn Energy Week)
Senator Sheldon Whitehouse has a reputation as an advocate for strong climate policies in Congress. The Rhode Island Democrat gained national attention over a decade ago when he gave the first of more than 290 “Time to Wake Up” climate speeches to date on the floor of the U.S. Senate. Many of the speeches were delivered at times when the prospects were bleak for significant leadership from Washington on climate and clean energy issues.
Yet the past three years have been very different. Through the passage of the Bipartisan Infrastructure Law and, most pointedly, the Inflation Reduction Act, Congress has made concrete steps to grow domestic clean energy and improve the nation’s climate resilience. Recently, Senator Whitehouse reintroduced a bill that would levy the first carbon border fee on goods imported to the U.S., and effectively reward American industry for its leadership in energy efficiency and emissions reductions.
On the podcast, Whitehouse discusses his plan for a carbon border adjustment. He also considers an upcoming election that will prove critical for continued progress, and that could jeopardize the full realization of recently passed energy and climate laws and the fate of the Biden administration’s related regulatory accomplishments.
Related Content
The Key to Electric Grid Reliability: Modernizing Governance <a href="https://kleinmanenergy.upenn.edu/research/publications/the-key-to-electric-grid-reliability-modernizing-governance/">https://kleinmanenergy.upenn.edu/research/publications/the-key-to-electric-grid-reliability-modernizing-governance/ </a>
Advancing the Social License for Carbon Management in Achieving Net-Zero GHG Emissions <a href="https://kleinmanenergy.upenn.edu/research/publications/advancing-the-social-license-for-carbon-management-in-achieving-net-zero-ghg-emissions/">https://kleinmanenergy.upenn.edu/research/publications/advancing-the-social-license-for-carbon-management-in-achieving-net-zero-ghg-emissions/ </a>
Coordinated Policy and Targeted Investment for an Orderly and Reliable Energy Transition <a href="https://kleinmanenergy.upenn.edu/research/publications/coordinated-policy-and-targeted-investment-for-an-orderly-and-reliable-energy-transition/">https://kleinmanenergy.upenn.edu/research/publications/coordinated-policy-and-targeted-investment-for-an-orderly-and-reliable-energy-transition/</a>
 
 Energy Policy Now is produced by The Kleinman Center for Energy Policy at the University of Pennsylvania. For all things energy policy, visit kleinmanenergy.upenn.edu

Senator Sheldon Whitehouse discusses the prospects for bipartisan U.S. carbon border fee legislation, and the need to protect the Biden Administration’s clean energy and climate achievements.

Senator Sheldon Whitehouse on the Rising Prospects for a U.S. Carbon Border Fee

The U.S. Department of the Treasury is finalizing rules that will determine which new clean hydrogen projects will receive the IRA’s generous 45V tax incentives, and whether those projects will deliver promised climate benefits. 
---

The Inflation Reduction Act provides a range of incentives for the development of clean energy resources in the United States. Highest profile among those incentives are hundreds of billions of dollars in tax credits earmarked for new wind and solar power projects. Yet the IRA’s most aggressive incentives aren’t directed at renewables but at clean hydrogen, which is a fuel that is viewed as crucial to decarbonizing parts of the economy that aren’t readily electrified, such as steel making, air travel and shipping.

Over the past few months, the Department of the Treasury and the Internal Revenue Service have been developing rules to define what will qualify as clean hydrogen, and what level of financial incentive hydrogen producers should receive based on the climate impact of the hydrogen they will make. Final rules are expected this year, and will ultimately determine whether clean hydrogen delivers on its climate promise.

Danny Cullenward, Vice Chair of California’s Independent Emissions Market Advisory Committee and a Senior Fellow at the Kleinman Center, explores the climate stakes surrounding the Treasury’s 45V hydrogen production tax credit. Cullenward explains the draft clean hydrogen rules, and why certain interests would like to see those guidelines relaxed. He also explores what the final rules might mean for the pace of clean hydrogen growth, and for the ability of clean hydrogen producers to thrive after the incentives expire.

Danny Cullenward is a Senior Fellow with the Kleinman Center for Energy Policy. He is also Vice Chair of California’s Independent Emissions Market Advisory Committee, and a Research Fellow with the Institute for Carbon Removal Law and Policy at American University.

Related Content

Coordinated Policy and Targeted Investment for an Orderly and Reliable Energy Transition https://kleinmanenergy.upenn.edu/research/publications/coordinated-policy-and-targeted-investment-for-an-orderly-and-reliable-energy-transition/

Why the IRA’s Carbon Capture Tax Credit Could Increase Greenhouse Emissions (Podcast) https://kleinmanenergy.upenn.edu/podcast/why-the-iras-carbon-capture-tax-credit-could-increase-greenhouse-emissions/ 



Energy Policy Now is produced by The Kleinman Center for Energy Policy at the University of Pennsylvania. For all things energy policy, visit kleinmanenergy.upenn.edu.

The U.S. Department of the Treasury is finalizing rules that will determine which new clean hydrogen projects will receive the IRA’s generous 45V tax incentives, and whether those projects will deliver promised climate benefits. ---
The Inflation Reduction Act provides a range of incentives for the development of clean energy resources in the United States. Highest profile among those incentives are hundreds of billions of dollars in tax credits earmarked for new wind and solar power projects. Yet the IRA’s most aggressive incentives aren’t directed at renewables but at clean hydrogen, which is a fuel that is viewed as crucial to decarbonizing parts of the economy that aren’t readily electrified, such as steel making, air travel and shipping.
Over the past few months, the Department of the Treasury and the Internal Revenue Service have been developing rules to define what will qualify as clean hydrogen, and what level of financial incentive hydrogen producers should receive based on the climate impact of the hydrogen they will make. Final rules are expected this year, and will ultimately determine whether clean hydrogen delivers on its climate promise.
Danny Cullenward, Vice Chair of California’s Independent Emissions Market Advisory Committee and a Senior Fellow at the Kleinman Center, explores the climate stakes surrounding the Treasury’s 45V hydrogen production tax credit. Cullenward explains the draft clean hydrogen rules, and why certain interests would like to see those guidelines relaxed. He also explores what the final rules might mean for the pace of clean hydrogen growth, and for the ability of clean hydrogen producers to thrive after the incentives expire.
Danny Cullenward is a Senior Fellow with the Kleinman Center for Energy Policy. He is also Vice Chair of California’s Independent Emissions Market Advisory Committee, and a Research Fellow with the Institute for Carbon Removal Law and Policy at American University.
Related Content
Coordinated Policy and Targeted Investment for an Orderly and Reliable Energy Transition <a href="https://kleinmanenergy.upenn.edu/research/publications/coordinated-policy-and-targeted-investment-for-an-orderly-and-reliable-energy-transition/">https://kleinmanenergy.upenn.edu/research/publications/coordinated-policy-and-targeted-investment-for-an-orderly-and-reliable-energy-transition/</a>
Why the IRA’s Carbon Capture Tax Credit Could Increase Greenhouse Emissions (Podcast) <a href="https://kleinmanenergy.upenn.edu/podcast/why-the-iras-carbon-capture-tax-credit-could-increase-greenhouse-emissions/">https://kleinmanenergy.upenn.edu/podcast/why-the-iras-carbon-capture-tax-credit-could-increase-greenhouse-emissions/ </a>
 
Energy Policy Now is produced by The Kleinman Center for Energy Policy at the University of Pennsylvania. For all things energy policy, visit kleinmanenergy.upenn.edu.

Will Hydrogen Energy be Clean Energy?

Physical attacks on critical European energy infrastructure have risen since the outbreak of the war in Ukraine, threatening energy security and the pace of the low-carbon transition.

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Sabotage of critical energy infrastructure has been on the rise, most prominently in Europe, where multiple attacks have targeted subsea electric transmission cables and natural gas pipelines, including Nordstream, since the start of the war in Ukraine.   

These disruptions come at a time of upheaval in the energy system, as nations push forward with the construction of expansive carbon-free energy infrastructure, spanning renewable generation and electric transmission networks. Simultaneously, European countries have raced to develop new LNG import terminals and pipelines to replace natural gas that had been supplied by Russia. Yet, until recently relatively little public attention has been paid to the challenge that physical sabotage presents to energy security and climate goals.

Benjamin Schmitt, a senior fellow with the Kleinman Center, explores the daunting task of protecting vast networks of often remote infrastructure from everything from hostile nations to small bands of rogue actors. He also discusses why culprits can be so difficult to identify, and how threats to energy infrastructure might undermine public support for the expansive projects needed to transition to a low-carbon energy system in Europe, the US, and elsewhere.

Benjamin Schmitt is a Senior Fellow here at the Kleinman Center whose research has focused on the physical security on the energy system. 

Related Content

Coordinated Policy and Targeted Investment for an Orderly and Reliable Energy Transition https://kleinmanenergy.upenn.edu/research/publications/coordinated-policy-and-targeted-investment-for-an-orderly-and-reliable-energy-transition/

America’s Electric Power Transmission Crisis https://kleinmanenergy.upenn.edu/podcast/americas-electric-power-transmission-crisis/



Energy Policy Now is produced by The Kleinman Center for Energy Policy at the University of Pennsylvania. For all things energy policy, visit kleinmanenergy.upenn.edu

Physical attacks on critical European energy infrastructure have risen since the outbreak of the war in Ukraine, threatening energy security and the pace of the low-carbon transition.
---
Sabotage of critical energy infrastructure has been on the rise, most prominently in Europe, where multiple attacks have targeted subsea electric transmission cables and natural gas pipelines, including Nordstream, since the start of the war in Ukraine.   
These disruptions come at a time of upheaval in the energy system, as nations push forward with the construction of expansive carbon-free energy infrastructure, spanning renewable generation and electric transmission networks. Simultaneously, European countries have raced to develop new LNG import terminals and pipelines to replace natural gas that had been supplied by Russia. Yet, until recently relatively little public attention has been paid to the challenge that physical sabotage presents to energy security and climate goals.
Benjamin Schmitt, a senior fellow with the Kleinman Center, explores the daunting task of protecting vast networks of often remote infrastructure from everything from hostile nations to small bands of rogue actors. He also discusses why culprits can be so difficult to identify, and how threats to energy infrastructure might undermine public support for the expansive projects needed to transition to a low-carbon energy system in Europe, the US, and elsewhere.
Benjamin Schmitt is a Senior Fellow here at the Kleinman Center whose research has focused on the physical security on the energy system. 
Related Content
Coordinated Policy and Targeted Investment for an Orderly and Reliable Energy Transition <a href="https://kleinmanenergy.upenn.edu/research/publications/coordinated-policy-and-targeted-investment-for-an-orderly-and-reliable-energy-transition/">https://kleinmanenergy.upenn.edu/research/publications/coordinated-policy-and-targeted-investment-for-an-orderly-and-reliable-energy-transition/</a>
America’s Electric Power Transmission Crisis <a href="https://kleinmanenergy.upenn.edu/podcast/americas-electric-power-transmission-crisis/">https://kleinmanenergy.upenn.edu/podcast/americas-electric-power-transmission-crisis/</a>
 
Energy Policy Now is produced by <a href="http://kleinmanenergy.upenn.edu/">The Kleinman Center for Energy Policy</a> at the University of Pennsylvania. For all things energy policy, visit <a href="http://kleinmanenergy.upenn.edu/">kleinmanenergy.upenn.edu</a>

Physical attacks on critical European energy infrastructure have risen since the outbreak of the war in Ukraine, threatening energy security and the pace of the low-carbon transition.

Can Competitive Electricity Markets Deliver Reliable Power?

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