Free MarketsThe National Capital Area Chapter for the U.S. Association for Energy Economics (NCAC-USAEE) held its annual energy policy conference on April 6th entitled “Energy Reset? Conflicting Forces in the Energy Space.” The event captured the economic implications of the announced and expected shift in energy policy between the Obama and Trump administrations. One reoccurring theme was the evolving role of government and market influences. It began with Thad Hill, CEO and President of Calpine Corp., emphasizing the need for free “markets, not mandates” and Tom Pyle, President of the American Energy Alliance, detailing President Trump’s energy deregulation agenda.

A panel on electricity generation began with Stephen Munro of Bloomberg New Energy Finance outlining the economic and policy landscape, followed by a colorful discussion between Tom Matzzie of CleanChoice Energy and Ray Shepherd from Peabody Energy on the role of public policy, especially regarding renewables and coal. Munro noted rising deployment and cost reductions for wind and solar, which have unsubsidized average output costs equivalent to natural gas generation in some states. Shepherd mentioned the value of high-efficiency generation and carbon capture, utilization, and storage. This technology currently requires public policy support. Matzzie emphasized that all forms of energy have received subsidies, many dating back to the 19th century.

Hill has previously stated that putting a price on carbon will let free markets drive emission reductions, which is a better option than government mandates and tax credits. This echoes points made by the independent market monitors of regional transmission organizations. The uptick in interventions has primarily come from the state level, prompting the Federal Energy Regulatory Commission to host a technical conference in May on state policy interventions.