Nicholas Institute for Environmental Policy Solutions
November 2021

A Closer Look at RGGI and Grid Reliability

A Closer Look at RGGI and Grid Reliability cover

Eleven Northeast and Mid-Atlantic states participate in the Regional Greenhouse Gas Initiative (RGGI), a market-based initiative that limits carbon dioxide (CO2) emissions from fossil fuel-fired power plants. Stakeholders newer to RGGI have raised questions about the potential impacts of this program on electric reliability and about the extent to which reliability is considered in RGGI analysis. As a new wave of states consider RGGI participation, and with RGGI’s third program review just underway, this is an opportune time to consider and address these questions and to ensure that RGGI poses no threat to grid reliability.

This policy brief reviews how RGGI modeling has considered reliability issues and mines existing research on the real-world impacts of RGGI since 2008. In short, research indicates that the program’s implementation has not impacted grid reliability—and that RGGI may help to improve reliability through strategic demand-side investments—all while delivering important economic, public health, and emissions reduction benefits to consumers. Indeed, the inherent flexibility of a regional, market-based program that enables power plant operators to make efficiency upgrades, shift generation to lower-emitting options, or purchase allowances makes this policy tool a good fit with grid reliability goals.