Primergy sees a lot of clean energy RFPs from corporate customers. All developers do.  And those RFPs typically ask for projects located in liquid markets like MISO, SPP, ERCOT, CAISO, or PJM.  It’s not surprising.  In these markets, representing 2/3 of electricity consumption in the US, hedge arrangements or VPPAs make it possible for buyers to transact directly and bilaterally with projects.  These transactions then enable new solar and wind projects. And they enable buyers to meet their clean energy goals without a utility RFP process, transmission service requests, or lengthy state-level procurement processes and approval.  

In most of the West, it just isn’t so.   Procurement of renewables is inaccessible to all but the biggest customers (and for them, it's still challenging). The power organizations across the West are highly fragmented and not designed to realize the full potential of clean energy in the region.    As it stands today, a stark majority of corporate renewable deals are in regions where functioning market (a Regional Transmission Operator--RTO or an Independent System Operator--ISO) is operating. The ERCOT market in Texas, for example, attracts 35% of all corporate renewable deals, which can be attributed to its competitive market environment, even though it only represents 11% of US load (even less than the future western markets footprints).

Consumers and buyers alike, however, will benefit from more transactable clean power in the West and a streamlined environment for dealmaking. Much of the western United States remains vertically integrated, making it difficult for corporate customers,—who account for 25% of total U.S. renewable energy purchases and 39% of new PPAs in 2024 —to bring shovel-ready projects online because liquid power markets have not been established yet. In other words, there is currently no mechanism in place to do direct procurement in the West.

The California legislature is planning to vote on a proposal for Western grid unification from the West-Wide Governance Pathways Initiative with support from the Governor and a broad coalition of stakeholders. Additionally, FERC recently approved SPP’s Markets+ proposal program. As these proposals advance, remember that market expansion is absolutely required if we are going to reach the full potential for American-made renewable power and meet the electricity needs of growing data center load.  It’s also needed to properly capitalize on transmission investments being made in real-time by utilities and private developers.

In future blog posts, we’ll talk more about market expansion in the West, including the CAISO proposal mentioned above as well as the proposal from SPP. But for now, with the U.S. renewable energy industry poised for growth and change, it is imperative that stakeholders follow the developments out of California and keep focus on supporting Western market expansion.

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