in my view (continued from p. 112) ability to store gas can provide the necessary temporal arbitrage that would be increasingly important with greater penetration of renewables. The other essentially untapped potential for balancing an intermittent renewable supply is not through batteries or dispatchable gas plants. The demandside alternatives remain a huge potential resource through near-term use of conventional dispatchable demand participation in wholesale electricity markets and through the as-yet unrealized but great promise of the smart grid and distributed energy resources. The cheapest source of balancing services for renewables might be thermal storage in buildings coupled with better information technology. Despite the fog of false promises, there could be a demand-side revolution in the making. Hence, there does not appear to be any fundamental technological problem of accommodating a large penetration of renewables. The challenge is more one of conflicting policies and costs. Current policies for advancing renewables have important impacts on electricity markets. By subsidizing renewables through supply push, average costs go up but marginal operating costs go down. And the marginal costs determine the economics in the shortterm organized markets. The problem is most evident in Germany, but the same symptoms appear in the U.S. organized markets. Wholesale electricity market prices have fallen enough to threaten the economic viability of nuclear and traditional coal-fired plants. The principal cause in the United States has been the low cost of natural gas and other environmental regulations. But the contribution of renewables to this problem is evident in the regular appearance of negative prices for electricity, down to the size of the production tax credit subsidy. Given the design of the subsidy, this makes perfect sense for the renewable suppliers. However, this subsidy works at cross purposes of ensuring the necessary dispatchable capacity and ramping capabilities to integrate increasing levels of renewables. july/august 2015 ieee power & energy magazine 109