Making Power Markets Designed for Fossil Generation Fit for Purpose When Renewables and Storage Dominate

The goal of power markets is to provide incentives for generators, transmitters, and users of power to meet our electricity needs sustainably, reliably, and at least cost. Principles of good design include penalizing pollution, establishing level playing fields that are open to all comers and reward performance, and prices that reflect for how decisions at one place and time affect system reliability and costs elsewhere and later. How do the very different operating characteristics of storage, variable renewables, and demand response challenge existing electricity market designs and policies, which were designed primarily for systems with large dispatchable thermal gennerators? Can those designs be adapted, or should they be scrapped for altogether different approaches?