An Energy Imbalance Market In the Southeastern United States

By Matt Butner, PhD

Contributing Editor: Tyler H. Norris 

September 2020

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This report establishes the case for an Energy Imbalance Market (EIM)—a voluntary wholesale electricity market operating in real-time—in the Southeastern United States. While a more comprehensive and widely implemented RTO may ultimately be optimal for the Southeast, an EIM is a straightforward, low-cost first step toward a more efficient and flexible electricity grid that can be achieved without structural reform. 

Perhaps most importantly, a traditional EIM is likely to identify more cost-saving opportunities and better balance renewable generation than existing proposals for energy market reform in the Southeast—namely, the proposed Southeast Energy Exchange Market (SEEM). 

Specifically, the modeling conducted in this report estimates that an EIM could save $100–600 million annually to Duke Energy alone, which encompasses approximately 40 gigawatts of generating capacity. In contrast, SEEM is projected to save around $40–50 million annually across its full territory, encompassing four times the generating capacity of Duke Energy.

About the Author:

Matt Butner earned a Ph.D. in Economics from the University of Colorado in 2019, where he specialized in environmental economics, energy markets, and industrial organization. Until September 2020, he was a Fellow at the Energy Transition Institute and an Economic Fellow at NYU's Institute for Policy Integrity, a non-partisan think tank, where he worked on electricity markets, carbon pricing, and transportation policy. He now serves as an Economist at the Federal Energy Regulatory Commission (FERC).