Skip to content
Contact
Set Up A Call
  • Blog
  • Carbon Pricing in U.S. Wholesale Markets:  New York ISO Makes A Proposal
Share this post
Monica Jha

Monica Jha

Carbon Pricing in U.S. Wholesale Markets:  New York ISO Makes A Proposal

October 12, 2018
/
Carbon Intensity,NYISO,Sustainable Energy

In order to meet New York’s goal to reduce carbon dioxide emissions 40% by 2030 and 80% by 2050 (relative to 1990 levels), New York ISO (NYISO) will begin to reflect the full cost of carbon dioxide (CO2) emissions in its wholesale electricity market.  To this end, NYISO recently introduced a straw proposal to incorporate the cost of carbon to accomplish the following goals:

  1. Economic efficiency
  2. Full transparency
  3. Avoidance of major cost shifts among New York customers
  4. Market and regulatory stability

 

NYISO’s Proposal

The following elements are included in NYISO’s proposed design:

  • The cost of carbon emissions could be incorporated into the NYISO-administered wholesale energy market using a carbon price in dollars per ton of CO2 emissions (managed as a part of settlement). The applicable carbon price would be adjusted for RGGI allowance prices for those suppliers required to hold RGGI allowances.
  • Suppliers would embed these additional carbon charges in their energy offers (referred to as the supplier’s carbon adder in $/MWh) and thus, incorporate the carbon price into the commitment, dispatch and price formation through NYISO’s existing processes.
  • In addition to charging internal generators for their emissions, NYISO would charge imports for emissions and credit exports for avoiding other emissions to prevent the carbon charges on internal generation from causing emissions leakage and costly distortions.  Wheel-through transactions would pass through without being subjected to carbon charges – other than the difference between entry and exit points.
    • Market participants would have to know, in-advance of the day ahead and real-time offer submission deadlines, the applicable charges/credits at each interface so they could be incorporated into offers and bids to compete with internal resources as-intended.
    • Wheel-through transactions would pass through without being subjected to carbon charges other than the difference between entry and exit points.
  • Market participants would have to know the applicable charges/credits at each interface in advance of the day ahead and real-time offer submission deadlines, allowing for their incorporation into offers and bids to compete with internal resources as-intended.
  • NYISO would debit the LBMP from LSEs for wholesale energy purchases, which would account for the carbon adder of the marginal units.  NYISO would also credit the carbon charge residuals (equal to the sum of the carbon charges debited from suppliers) to the LSEs.  The methodology would compensate for zonal differences in the carbon component of the LBMP.

 

The Brattle Group, in its analysis, “Summarizing the Consumer Impact of Incorporating the Cost of Carbon Emissions in the Wholesale Electric Market”, concluded that integrating the cost of carbon will enhance transparency and lead to more innovative solutions as the market absorbs and deals with the new cost.  The study also notes that NYISO is on the forefront of expanding its fleet of renewable resources and, that incorporating carbon costs into its market will attract more competition.

NYISO has engaged in stakeholder discussions to develop a model that can (a) attain the stated goals of carbon reduction and (b) enhance market liquidity, transmission development and new generation projects on both a near-term and forward basis.

 

PCI Systems Evolve With NYISO & All Other Markets

PCI’s entire solutions platform evolves accommodate all changes in every North American energy market.  The PCI GenTrader optimization platform, provides market participants the ability to model and plan for the impact of emission costs and constraints in any time horizon (near, mid and long-term).  Our integrated bid-to-bill solution, PCI’s GenManager, gives traders the power to easily incorporate emissions costs into their bids so that all costs can be recovered.

Monica Jha

Monica Jha

Related blog posts

Loading...
Nov 23
Sustainable Energy

What Are ADERs and Why Are They Important to the Future of the Grid?

battery storage units in a field of grass
Oct 25
Energy Storage Optimization and Trading,Sustainable Energy

Green Energy and Energy Storage

Transmission lines against a bright blue sky
Oct 19
Renewable Energy Trading,Sustainable Energy,Transmission Scheduling

Transmission Will Play Key Role in Our Net Zero Future

Related press

Loading...
Laptop computer with code displayed on the screen
Jan 23
Cybersecurity

PCI Successfully Completes SOC/FISMA Examinations for 2022

Ron Swartz, senior director of Trading Analytics, at PCI Energy Solutions
Jan 11

Energy Trading Product Visionary Ron Swartz Joins PCI Energy Solutions

Transmission Lines
Nov 16
SEEM

Multiple Customers Go Live With the PCI SEEMTrader Platform for Autonomous Power Trading in the Southeast Energy Exchange Market (SEEM)

PCI Energy Solutions

PCI Energy Solutions

Also known as Power Costs, Inc.

Connect with us

U.S. 1+ 405.447.6933

Sales 1+ 405.701.7301

301 David L. Boren Blvd., Suite 2000
Norman, OK 73072

Contact us

We’re Hiring! 

Linkedin Twitter
  • Energy Trading and Optimization
  • Wholesale Market Participation
  • ETRM
  • Portfolio Optimization
  • Settlements and Billing
  • Gas & Fuels Management
  • Generation Outage Management
  • Company Type
  • Utilities
  • Generators
  • Traders
  • Renewable Energy
  • Asset Managers
  • Retailers
  • About
  • About Us
  • Cybersecurity
  • Leadership
  • Our Technology
  • Newsroom
  • Careers

Subscribe to our newsletter

Subscribe
  • Transmission and Reliability
  • Transmission Outage Management
  • Transmission Scheduling
  • e-Tagging
  • Balancing Authority Operations
  • Energy Accounting
  • Settlements and Billing
  • Sustainable Energy
  • Renewables Trading & Scheduling
  • Energy Storage Optimization & Trading
  • Hydrogen
  • Hydropower
  • Carbon Intensity
  • Markets
  • US ISO/RTO Markets
  • US Bilateral Markets
  • Canada
  • Chile
  • Mexico
  • Europe
  • Australia
  • Thought Leadership
  • Blog
  • Webinars & Events
  • Customer Portal
  • INFOCUS Conference
  • Product Trainings
  • Product Documentation
  • Issue Tracker

© Power Costs, Inc. 2022 | All Rights Reserved.

  • Privacy Policy
  • Sitemap
Manage Cookie Consent
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behavior or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes. The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.
Manage options Manage services Manage vendors Read more about these purposes
View preferences
{title} {title} {title}

Request More Information

  • This field is for validation purposes and should be left unchanged.

Contact

Name(Required)
This field is for validation purposes and should be left unchanged.

Subscribe

Name
I am not a robot 🤖

Solutions

Energy Trading and Optimization

  • Wholesale Market Participation
  • ETRM
  • Portfolio Optimization
  • Settlements and Billing
  • Gas & Fuels Management
  • Generation Outage Management
  • Wholesale Market Participation
  • ETRM
  • Portfolio Optimization
  • Settlements and Billing
  • Gas & Fuels Management
  • Generation Outage Management

Transmission and Reliability

  • Transmission Outage Management
  • Transmission Scheduling
  • e-Tagging
  • Balancing Authority Operations
  • Settlements and Billing
  • Energy Accounting
  • Transmission Outage Management
  • Transmission Scheduling
  • e-Tagging
  • Balancing Authority Operations
  • Settlements and Billing
  • Energy Accounting

Sustainable Energy

  • Renewable Energy Trading & Scheduling
  • Energy Storage Optimization & Trading
  • Hydrogen
  • Hydropower
  • Carbon Intensity
  • Renewable Energy Trading & Scheduling
  • Energy Storage Optimization & Trading
  • Hydrogen
  • Hydropower
  • Carbon Intensity

Markets

  • US ISO/RTO Markets
  • US Bilateral Markets
  • Canada
  • Mexico
  • Chile
  • Europe
  • Australia
  • US ISO/RTO Markets
  • US Bilateral Markets
  • Canada
  • Mexico
  • Chile
  • Europe
  • Australia

Resources

Thought Leadership

  • Blog
  • Webinars & Events
  • Blog
  • Webinars & Events

Customer Portal

  • INFOCUS Conference 2023
  • Product Trainings
  • Product Documentation
  • Issue Tracker
  • INFOCUS Conference 2023
  • Product Trainings
  • Product Documentation
  • Issue Tracker

About Us

  • About
  • Leadership
  • Newsroom
  • Our Technology
  • Cybersecurity
  • About
  • Leadership
  • Newsroom
  • Our Technology
  • Cybersecurity

Careers

Contact Us