To Rid Electric Grid of Carbon, Shore Up Green Energy Support

A new energy model, developed by Northwestern University and Cornell University engineers, along with federal economists, helps remove carbon-generated power from the US electric grid – replacing it with a greener, financially feasible wind, solar and hydro energy system.

“We’re trying to balance the priorities of maintaining a reliable, low-cost, efficient electricity system in the US, while shifting to a cleaner, greener system,” said co-author Jacob Mays (PhD ’19), a postdoctoral associate in civil and environmental engineering at Cornell and former PhD student in Northwestern Engineering’s Department of Industrial Engineering and Management Sciences. “The model in this paper is helping to structure tradeoffs between goals, such as low prices, greener energy, and reliable electricity.”

The research is explained in a paper, titled “Asymmetric Risk and Fuel Neutrality in Electricity Capacity Markets,” published October 28 in the journal Nature Energy. Co-authors are David Morton, the David A. and Karen Richards Sachs Professor of Industrial Engineering and Management Sciences at the McCormick School of Engineering, and Richard P. O’Neill, chief economic adviser at the Federal Energy Regulatory Commission.

In the last three decades, electric utilities throughout the US – which once controlled both power generation and transmission – have shifted toward restructured markets. These foster more competition than the once-traditional monopoly utility model, as electric energy now can be created by one company and transmitted by another.

Choices made in the design of these restructured markets, however, make it easier for investors to fall back on carbon-based ways – such as natural gas – to make electricity. Developing a new model keeps the creation of wind, solar, nuclear, and hydro power economically competitive and aligns markets toward a green future.

“In the US, most electric power system operators put a cap on energy prices and use capacity payments to ensure ample supply of generation resources,” said Morton, who also chairs Northwestern Engineering’s Department of Industrial Engineering and Management Sciences. “Our paper shows that such practices inadvertently favor natural gas generators and discourage investment in renewable resources such as wind and solar power.”

About two-thirds of the country participates in restructured electricity markets, Mays said. When these markets were established, solar and wind made very little contribution to the overall energy mix.

“The complexity of electricity makes it difficult to have completely free markets. Instead, competition happens within the context of administrative rules,” Mays said. “Since those rules were written for traditional fossil fuel technologies, we need to rethink some of them as new technologies become a larger part of the market. With states and utilities setting goals for much higher levels of clean energy, it’s important to make sure we incorporate renewables into the grid as efficiently as possible.”