As weather-dependent renewables increase, energy revenues in the wholesale market diminish, even as the need for dispatchable resources remains. Such resources are otherwise compensated by forward capacity markets, but those markets are poorly matched to customers’ real needs and the operational realities of a renewable-heavy world. The solution to these issues in market design may be found in an Operating Reserve Demand Curve, intended to pay capacity when and where it is available and needed, as a complement to real-time energy pricing.

This article (subscription or purchase required) was part of a special issue of Electricity Journal on the topic of energy optimization, guest-edited by RAP staff.