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Power sector faces major policy, technology and market challenges in 2020

Dan Esposito, energy markets expert at PA Consulting, discusses power sector policy and market challenges to expect in 2020.

Read the full S&P Global article here

The article notes that policy actions regarding distributed energy, capacity markets, carbon pricing and tax credits likely will interact with market and technical phenomena such as hydrogen, natural gas and offshore wind to make 2020 eventful for power markets.

Dan said implementation of new market rules for energy storage "may not move power markets significantly in 2020, but will set the stage for the next decade."

He adds: "New York's carbon pricing proposal - if approved - could legitimize the concept of incorporating externalities in wholesale power markets, leading other states or markets to consider similar programs." Carbon pricing could cause "a stir since its success could lead to similar programs in other, larger markets."

Dan said that extending energy tax credits in 2020 could have a big impact, but no comprehensive energy policy change is likely in a presidential election year. An extension might be more palatable during a lame-duck session, as happened with two previous extensions.

Dan adds: “PJM's new capacity rules could impact individual state policies supporting renewables and nuclear generation -- which could make states rethink their long-term participation in the PJM wholesale market."

Learn how to navigate the uncertain future of the electricity sector

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