Energy Policy & Market Analysis Flashcards
7 cards from real CEA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Energy Policy & Market Analysis flashcards as text
The Energy Policy Act of 2005 created a Production Tax Credit (PTC) primarily for which technology at that time?
Answer: Wind energy and other qualifying renewables
The PTC provides a per-kilowatt-hour tax credit for electricity generated from qualifying renewable sources, with wind historically being the primary beneficiary.
In deregulated electricity markets, the 'energy-only' market design relies on which mechanism to incentivize adequate generation investment?
Answer: High energy prices during scarcity events (scarcity pricing)
Energy-only markets depend on elevated spot prices during scarcity to provide the revenue signals needed to attract new investment without separate capacity payments.
What is the primary purpose of a strategic petroleum reserve (SPR)?
Answer: To provide emergency crude oil supply during supply disruptions
The U.S. SPR holds crude oil stocks that can be released to counteract sudden supply interruptions and reduce economic impacts of oil price shocks.
Under a cap-and-trade program, if the allowance price rises significantly above expectations, which policy safety valve is sometimes included?
Answer: A cost containment reserve that releases additional allowances at a trigger price
A cost containment reserve releases a fixed pool of extra allowances at a predetermined price ceiling, preventing compliance costs from exceeding policy intent.
Which concept describes the minimum price at which a generator will offer power into the wholesale market, typically reflecting variable operating costs?
Answer: Marginal cost (short-run)
A generator's short-run marginal cost (primarily fuel and variable O&M) sets its offer floor, since it will not bid below the cost of actually producing each additional megawatt-hour.
The Inflation Reduction Act (IRA) of 2022 significantly altered U.S. clean energy policy primarily by:
Answer: Providing large-scale tax credits and direct pay for clean energy investments
The IRA deployed roughly $370 billion in tax credits, grants, and loans for clean energy, EVs, and industrial decarbonization, making it the largest U.S. climate investment to date.
In natural gas markets, the Henry Hub price is best described as:
Answer: The benchmark spot price for natural gas in North America
Henry Hub in Louisiana serves as the primary pricing point and benchmark for NYMEX natural gas futures contracts and spot trading in North America.