Reforming retail electricity rates to facilitate economy-wide decarbonization

Deep decarbonization of the economy depends heavily on the decarbonization of the electricity sector and the electrification of several key end-use sectors. Decarbonization of the electricity sector requires replacement of most dispatchable fossil generation with wind, solar, and storage. Wind and solar have high capital costs and nearly zero marginal operating costs. The transition of the electricity sector will lead to a fundamental change in the distribution of prices and marginal operating costs at the wholesale or bulk power level.