Retail Market Design Lessons from California and Texas

Abstract

By a large margin, California and Texas were the two states in the continental United States with the largest intermittent renewable energy shares in 2020. California had almost 14,000 MW of grid scale solar capacity and almost 6,000 MW of grid-scale wind capacity. Twenty-two percent of the energy consumed in the state came from these solar and wind resources. Texas had approximately 24,500 MW of wind capacity and 2,500 MW solar capacity and twenty-four percent of the energy consumed in the state came from these wind and solar resources. Because of their large renewable energy shares, these states are reliant on active demand-side participation in the short-term market to maintain supply and demand balance in real-time.