The Cheapest, Cleanest Way to Meet Electricity Demand
Last year, the United States’ largest electric grid operator held an auction to determine how to meet future electricity demand in its service area, spanning all or parts of 13 states and the District of Columbia. Companies placed bids with the operator, PJM Interconnection, to supply electric capacity to its grid, competing to offer services at the lowest possible prices. Which technologies fared best in this free-market auction? The top-performing technology was neither renewables, like solar and wind, nor fossil power, like coal and natural gas. The winning resource, which will supply 47.5 percent of all new electrical capacity for PJM in 2017–2018, was “demand response,” a set of techniques for reducing peak electricity demand.