Market Evolution: Wholesale Electricity Market Design for 21st Century Power Systems

Research output: NRELTechnical Report


Demand for affordable, reliable, domestically sourced, and low-carbon electricity is on the rise. This growing demand is driven in part by evolving public policy priorities, especially reducing the health and environmental impacts of electricity service and expanding energy access to under-served customers. Consequently, variable renewable energy resources comprise an increasing share ofelectricity generation globally. At the same time, new opportunities for addressing the variability of renewables are being strengthened through advances in smart grids, communications, and technologies that enable dispatchable demand response and distributed generation to extend to the mass market. A key challenge of merging these opportunities is market design -- determining how to createincentives and compensate providers justly for attributes and performance that ensure a reliable and secure grid -- in a context that fully realizes the potential of a broad array of sources of flexibility in both the wholesale power and retail markets. This report reviews the suite of wholesale power market designs in use and under consideration to ensure adequacy, security, and flexibilityin a landscape of significant variable renewable energy. It also examines considerations needed to ensure that wholesale market designs are inclusive of emerging technologies, such as demand response, distributed generation, and storage.
Original languageAmerican English
Number of pages57
StatePublished - 2013

NREL Publication Number

  • NREL/TP-6A20-57477


  • 21st Century Power Partnership
  • demand response
  • distributed generation
  • energy systems integration
  • renewable energy (RE)
  • wholesale power markets


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