In a recent article published by SNL Financial, Richard Sedano, Principal and U.S. Programs Director framed the expiring federal renewable production tax credit within a larger context:
He said, “I am concerned that a complex topic of public policy influencing wholesale energy prices, which [are] subject to a myriad of influences from state and federal policy, is being over-simplified.”
“Government is always intervening in markets,” he said. “I wonder if many analysts thinking about the single issue of the PTC…are thinking clearly about how many rules in the wholesale markets have changed in the last 20 years, and how often, and how markets and investment have adapted over time.”
While Sedano acknowledged that depressed prices due to an overabundance of wind are indeed a problem with which investors must contend in areas like ERCOT’s West Zone, he said the depressive effect on prices during windy periods would remain even if the PTC were allowed to expire because wind capacity in the area is already built and operating.
The full article is available from SNL Financial.
Learn more about RAP’s work with wholesale power markets here.