These are exciting times. New York’s ‘Reforming the Energy Vision’ (REV) has paved the way for change of unprecedented proportions. New York regulators are preparing the state for a future in which rooftop solar installations are ubiquitous and the rumbling staccato of gasoline-fueled automobiles is replaced by the relative silence of electric vehicles.
While more rooftop solar energy and electric vehicles are certainly part of our energy future, some of the biggest changes are likely to come from less visible – and less obvious – sources, particularly for customers in densely populated metropolitan areas and low-income customers, who make up a significant portion of New York state’s customer base.
Urban dwellers, for whom mass transit is a central part of daily life and owning your own rooftop is less common, may view electric cars, rooftop solar, wind, battery storage, and on-site energy generation as appealing, but also abstractions more suitable for upstate homeowners than those living in crowded apartment buildings.
For these customers, the opportunity to contribute to a clean energy future will be guided largely by the domain of Adam Smith’s invisible hand: economic forces that enable greater control over how much energy is used and at what price. Read More
When the door to one power plant closes, a window to more clean energy solutions opens.
It may seem logical that once a power plant closes, another one needs to be built to replace it – after all, we need to make up for its potential energy generation with more natural gas or nuclear-powered energy, right? San Diego Gas & Electric (SDG&E) is certainly trying to convince Californians this is true. Trouble is, EDF and other environmental groups, along with the California Public Utilities Commission (CPUC), aren’t buying it. And you shouldn’t either.
This story begins in 2013, when the San Onofre Nuclear Generating Stations (SONGS) permanently closed, shutting down a nuclear power plant with a capacity of 2,200 megawatts (MW) and sparking a debate about how to replace this lost power source. When first determining how to proceed in the wake of the SONGS closure, the CPUC decided SDG&E could buy between 500 to 800 megawatts (MW) of new energy resources by 2022. Further, at least 200 MW of this power had to – and all of it could – be met with preferred resources like energy efficiency, renewable energy, energy storage, and demand response (an energy conservation tool that pays people to save energy when the electric grid is stressed). Read More
The amount of energy we use at any given time is constantly changing. Lights are switched on and off by time of day – other appliances, such as air conditioners, might operate based on the season. In order to meet our dynamic energy demands, our system has to have the infrastructure and resources in place to respond when needed.
What may not be clear to many of us is that the costs associated with supplying this electricity also change with time, and during certain hours of the day and year these costs can be much higher. This isn’t readily apparent because the electricity rates we pay throughout the year are essentially flat.
Many, including Environmental Defense Fund (EDF), have made the case for electricity pricing that helps signal these fluctuating costs to customers. There are a variety of ways to design pricing that varies with time, while communicating to individuals and businesses the value of cutting back on electricity, or shifting use to other times. These options can take the form of paying a different amount for energy at different times, or perhaps being compensated for reducing use at times when the electric system is most constrained. Read More
Despite its enormous relevance to the struggle to build a cleaner, greener electric system, New York’s ‘Reforming the Energy Vision’ (REV) proceeding is not fundamentally an environmental one. It is concerned with building a new electric marketplace for a broad range of energy resources, some zero-carbon and some not, which are expected to reduce total costs paid by tomorrow’s customers over the long term compared to what would be expected under a ’business as usual’ scenario.
My last blog post described the new electric industry market structure envisioned by New York regulators in the recent Track 1 order of the REV proceeding. As promised, this week I’m providing a closer look at the environmental implications of the new order.
While reducing carbon emissions is one of the six stated goals of the proceeding, it is not the sole thrust. Interestingly, the order begins a deep dive on what decarbonization means for the electric system and discusses various environmental issues at length, potentially raising their profile in the proceeding. Highlighting the importance of environmental issues is a welcome change, but, to accomplish the goal of emissions reductions, the devil is in the details. Read More
Ask most people what the Beatles and California have in common and they might very well be at a loss. However, the answer is pretty simple: they are both unabashed trendsetters in the face of resistance – the former in their musical style and the latter in its clean energy policies.
Not content with setting a Renewable Portfolio Standard that ends at 2020, Governor Jerry Brown and state legislators are pushing for the Golden State to get 50 percent of its energy from renewable resources by 2030.
To meet this ambitious target, California must build a system that is largely based on renewable electricity, like wind and solar. This is not an easy task. The primary reason? Sunshine and wind are only available at certain times of the day and can be variable during those times.
Traditionally, managers of the electricity grid have relied upon dirty “peaker” power plants – usually fossil fuel-fired and only needed a couple of days a year – to balance the grid during periods of variability or when electricity demand exceeds supply. But, in a world where 50 percent of our energy comes from renewable sources as a means to achieving a clean energy economy, we can’t rely on these dirty peaker plants to balance the variability of wind and solar.
Luckily, technology is available today that can help fill the gap of these peaker plants – and the California Public Utilities Commission (CPUC) is starting to embrace it. Read More
Also posted in Air Quality, California, Cap and Trade, Clean Energy, Climate, Demand Response, Electric Vehicles, Energy Efficiency, Energy Storage, Energy-Water Nexus, Renewable Energy, Smart Grid
With time-variant pricing, people can choose to run their dishwashers at times of day when electricity is less expensive.
Today, most residential electricity customers are charged the same price regardless of when the electricity is actually being used. Charging customers a uniform price for electric service looks a bit like buying groceries by the cart instead of by the items purchased (e.g., apples versus filet mignon) – simple, to be sure, but so riddled with inefficiencies that no one would actually propose operating a supermarket that way. A cartful of filet mignon may weigh the same as a cartful of apples, but the value of these items and the cost of bringing them to market is drastically different. Similarly, electricity costs differ depending on the time of day power is produced and delivered.
Time-variant electric pricing addresses this issue by charging customers different prices depending on when electricity is used, reflecting the true costs of producing and delivering electricity. This gives customers greater control over their electricity bills by allowing them to reduce their energy use at higher-cost times. A recent blog post by my colleague, economist Beia Spiller, explained how time-variant electricity pricing can benefit customers, utilities, and the environment, and described several different types of time-variant pricing.
Given its compelling economics, one would think time-variant pricing would be widespread. Part of the reason it’s not is sheer inertia, but there’s more to it than that. Read More