Wholesale Electricity Market Studies and Engagement Program
Today, two-thirds of the country’s consumers are powered by electricity purchased through wholesale markets where pricing is based on supply and demand and rapidly fluctuates throughout the day—fluctuations that in turn ripple down to affect consumer energy bills. As more clean and renewable resources come into the market, creating more flexible and efficient markets would not only ensure a reliable supply of electricity, but also help keep prices low for consumers. Regional and state-level utilities have valuable perspectives on how to improve markets to address this, but many currently lack the resources or training to meaningfully participate in market development.
Why Do We Need the Wholesale Electricity Market Studies and Engagement Program?
Administered by the Grid Deployment Office (GDO), the Wholesale Electricity Market Studies and Engagement Program (WEMSE) provides states and regions with technical and financial assistance related to developing, expanding, and improving wholesale electricity markets. This engagement will ensure these stakeholders are able to provide critical insight into market design, expansion, and improvement activities. Efficient, fair, and transparent wholesale market constructs are critical to providing an affordable, reliable, and clean electric grid.
Selections
Second Round Selected Projects
On November 20, 2024, the U.S. Department of Energy (DOE) announced up to a total of just under $10 million for six projects to improve state and regional engagement in wholesale electricity markets.
Funding Amount: $2 million
Boise State University will analyze ways to improve resource adequacy in the Southwest Power Pool (SPP) region. Boise State University and SPP will develop and explore how to develop and apply a new resource adequacy measures and metrics that improve upon the current practice of setting planning reserve margins based on loss of load expectation. The project will support the implementation of more modern resource adequacy metrics, reliability standards, and planning criteria in an independent system operator (ISO)/Regional Transmission Organization (RTO) environment using SPP as the case study.
Funding Amount: $1.25 million
GE Vernova Advanced Research Center will work with project partners to develop mechanisms to incorporate distributed energy resource aggregators (DERAs) more efficiently into wholesale market security-constrained unit commitment and to improve market run times. The project team will test DERA market participation models, study their impact on distribution grids, and improve distribution grid reliability and market clearing speed to enable more DERAs to bid into wholesale markets, particularly in the Independent System Operator New England (ISO-NE) and PJM Interconnection markets.
Funding Amount: $1 million
Global Impact, LLC’s West-Wide Governance Pathways Initiative will convene stakeholders and potential market participants to develop a regional organization that can provide independent, multi-state governance of a Western wholesale market. The Pathways Initiative team is convening stakeholders from all of the states in the Western Interconnection.
Funding Amount: $1.5 million
Quanta Technology will research the integration of long-duration energy storage (LDES) in the California Independent System Operation (CAISO) and the New York Independent System Operator (NYISO) markets. The project will develop a new resource planning tool capable of allowing forward-scheduled economic bids from LDES and modeling the economic dispatch of the CAISO market across new multi-day market bidding times (up to 7 days out) that would allow LDES to schedule farther into the future than is currently possible (only day ahead in CAISO now).
Funding Amount: $1.5 million
Temple University will study coordination between the Pennsylvania-New Jersey-Maryland Interconnection (PJM) and the Midcontinent Independent System Operator (MISO) with the new Predictive and Adaptive Market-to-Market Coordination for Efficient Congestion Relief (PACER) system. The PACER system will analyze credible scenarios, including worst-case scenarios, at the PJM/MISO seam with different levels of electrification, renewable penetration, and weather conditions across the two markets and develop a useable joint-operating model for RTO/ISO staff.
Funding Amount: $2.7 million
University of Pittsburgh will develop a framework for shared resource adequacy planning within and between regions to support joint studies and operational procedures during extreme weather events. The University of Pittsburgh project will study SPP and MISO to determine better ways of coordinating scheduling, managing congestion, improving forecasting accuracy to reduce transaction costs, and improving intertie optimization between SPP and MISO. Better coordination of interties between SPP and MISO will improve resource adequacy in both markets by helping the markets share resources more effectively.
First Round Selected Projects
On April 11, 2024, DOE announced up to a total of $10.6 million for six projects to improve state and regional engagement in wholesale electricity markets.
Status: $3 million awarded
NASEO will inform State Energy Offices on regional wholesale market design and how they impact resilience and resource adequacy through the development of materials, trainings, and convenings. This educational initiative will enable states outside of an RTO/ISO to understand policy decisions in these markets with regional reliability and resource adequacy implications, enable decision-makers, such as State Energy Offices, to understand and evaluate different proposed market structures and resource adequacy constructs and how market constructs implemented in the future could affect state and regional goals, and more.
Status: $1.9 million awarded
Cornell will analyze price formation and resource procurement policies in wholesale electricity markets that could accommodate an evolving resource mix of higher levels of wind, solar, and storage in future electricity systems, in support of efficiency and reliability in both the short and long term. This effort will involve developing modeling tools and analytical frameworks for key issues and addressing interactions between market design and policies at the state and federal levels via the assembled Technical Advisory Committee that includes a diverse group of wholesale market operators and state regulators.
Status: $1.75 million awarded
WPP/Western Transmission Expansion Coalition will conduct planning analyses across the Western Interconnection to produce 10-year and 20-year transmission plans, which will identify enhanced reliability needs, improved economic efficiency, and a path for western States and Tribes to achieve their respective energy goals, as well as improved interregional transmission planning in the West.
Status: $1.64 million awarded
UT Arlington will study the benefits, aggregability, and deliverability of aggregated distributed energy resources (ADERs) and facilitate the adoption of these ADERs into wholesale electricity markets, specifically in the ERCOT market in Texas. UT Arlington will also convene an Industrial Advisory Board (IAB), comprised of utilities, public utility commissions, RTOs/ISOs, and aggregator providers that will provide feedback on use cases to ensure alignment with industry practices.
Status: $1.56 million awarded
EPRI will lead a project team that will study the current and projected Southwest Power Pool (SPP) resource portfolios by developing advanced modeling approaches and a market simulation framework to prototype new market design features, including multi-day energy availability product to improve resilience to extreme weather events; greenhouse gas (GHG) accounting approaches to mitigate carbon emissions; intra-day look-ahead commitment configurations to examine operational benefits; and improved storage participation models to better manage the stored energy in the storage fleet.
Status: $816,000 awarded
Penn State will identify market design changes that efficiently integrate batteries and other unconventional resources by assessing new market design to manage intertemporal constraints and uncertainties using a realistic market simulation model with PJM and ISO-NE.
Frequently Asked Questions
What is the purpose of this program?
Wholesale electricity markets provide a platform for the wholesale selling and purchase of electricity, the integration of electric resources into the grid, and other important market conditions for the grid. But U.S. wholesale markets were designed three decades ago when the U.S. electric grid looked much different. With the widespread deployment of new clean energy resources and advanced grid and transmission technologies, creating more efficient and flexible wholesale electricity markets is critical. Efficient, fair, and transparent wholesale market constructs are thus critical to providing an affordable, reliable, and clean electric grid.The Wholesale Electricity Markets Studies and Engagement (WEMSE) Program provides funding to assist applicants, particularly States, Tribes, and Regional Transmission Organizations (RTOs)/Independent System Operators (ISOs) to perform analytical studies on critical market issues or convene stakeholders on how best to develop wholesale markets.
Who is eligible to apply for this program?
Domestic for-profit entities, State or Tribal entities, educational institutions, and nonprofits are eligible to apply for WEMSE funding. Labs are also eligible to apply. In particular, State and Tribal agencies, as well as wholesale market operators (ISOs/RTOs) themselves, are encouraged to apply. Applicants are also encouraged to include State/Tribal entities and market operators in their proposed project teams.How many selections have been made to date?
GDO selected six projects for the first round of funding in April 2024 and six projects for the second round of funding in November 2024.
Will there be another round of funding?Round 2 is the final round of funding in this WEMSE FOA. However, GDO’s wholesale electricity markets program may open a new funding opportunity in the future, depending on budget availability and stakeholder interest.
Can applicants who were not selected in this round re-apply in future rounds?Yes. If GDO opens a new funding opportunity, applicants who were not selected for WEMSE may apply.
In general, all applicants for competitive funding will need to submit a Concept Paper as part of the application process, even if an applicant previously submitted a concept paper or an application for a project in Rounds 1 and 2.
Will DOE be providing feedback to applicants who were not selected?
Yes. All applicants who were not selected will receive limited feedback on the strengths and weaknesses of their application. Letters with feedback will be emailed to the Administrative Contacts and Principal Investigators identified in the Applications after selections are announced. In addition, in Round 2, all applicants received reviewer feedback and had an opportunity to respond. The applicants’ written replies to reviewer feedback were considered as part of the selection process in Round 2.
Contact Us
For more information, contact us at [email protected].