Over the past two years, Texas’s changing energy landscape has been a focus of EDF’s work. In our Texas’ Energy Crunch report from March 2013, we highlighted that Texas has a peak capacity constraint – meaning that the power grid becomes strained when, for example, everyone is using their air conditioning units on hot summer afternoons. This challenge, coupled with increased climate change and drought, signal the need to prepare by adopting a smarter grid and cleaner resources.
The Public Utilities Commission of Texas (PUCT) and the Electric Reliability Council of Texas (ERCOT) have been engaged in this conversation and various proposals have been laid on the table to determine what Texas’ energy future will look like. EDF maintains the position that, whatever reforms are made, customer-facing, demand-side resources – defined here as demand response (DR), renewable energy, energy efficiency and energy storage – must play a key role to ensuring reliability, affordability, customer choice and environmental improvements.
Energy-Only Status Quo or Capacity Market or…?
Texas’ current energy-only market structure pays power plants only for the energy they produce. This is beneficial in that generators are not overcompensated, but the downside is that energy companies aren’t incentivized to build in Texas and energy management providers (DR companies) are not viewed as equal players. Energy prices are low due to an upsurge in cheap, abundant natural gas and wind – and without a guarantee for a high return on investment, companies will not take the risk of constructing costly new power plants. Read More
Also posted in Demand Response, Energy Efficiency, General, Renewable Energy, Texas, Texas Energy Crunch, Water
Tagged Capabilities Market, Capacity Market, Energy-Water Nexus, ERCOT, PUCT, Texas Energy Market, Texas Public Utilities Commission, Third Way
Last month I travelled to Amsterdam for European Utility Week (EUW), Europe’s largest “smart energy” conference that was attended by more than 7,000 people, hundreds of exhibitors, utilities, regulators and policy experts. The theme of this year’s conference was “Pulling in One Direction,” with a focus on greater collaboration between the European power transmission and distribution sectors. I was invited to speak about EDF’s Smart Power Initiative, which aims to change the trajectory of the U.S. electricity system to help avoid dangerous climate change through smart power policies and clean energy investments.
Why would EUW be interested in EDF’s approach? Because EDF seeks to knit together key state and regional regulatory agendas to “move the needle” toward a clean and modernized power grid, and to fix the “disconnect” between power transmission and distribution. Increasing the connection between the wholesale sector (typically has more sophisticated markets including real time pricing) and the distribution sector (has less sophisticated pricing) can unlock the value of smart grid.
This is one reason why our team seeks to enable smart metering and dynamic pricing for customers on the distribution side. Dynamic pricing incentivizes the shifting electricity use to periods of lower demand and lower prices (often when clean, low-carbon energy is most available). Enhancing the flow of information and energy between the wholesale and distribution sector will also empower smart grid solutions such as: reducing wasted energy through energy efficiency and demand response (which rewards customers who use less electricity during times of peak, or high, energy demand) and increasing the use of clean, distributed generation (like wind and solar). These innovative solutions will ultimately make the system cleaner, less wasteful and eliminate the need to invest in additional polluting fossil fuel power plants. Read More
This commentary originally appeared on EDF Voices blog.
Rooftop solar owners in Arizona will pay higher costs for utility service under a new decision by state regulators, but the increase was much lower than the amount sought by Arizona Public Service, the state’s largest utility company. Both sides claimed victory. The case is part of a growing trend of more states reviewing these charges.
What is net metering?
The case involves a practice known as “net metering” where the utility pays rooftop solar owners for the excess energy the rooftop solar panels send back to the grid. Most states allow net metering. In many states, the utility company pays rooftop solar owners the full price the utility charges for power it delivers to customers. Utility companies claim this price is higher than their actual cost to produce electricity. The rooftop solar industry claims that raising costs would crush a new industry that provides cheap, clean energy and fails to recognize the benefits provided by rooftop solar.
Regulators must find the right balance between utilities and the rooftop solar industry by allowing utilities the opportunity to recover all their costs while ensuring that rooftop solar owners receive full credit for the benefits they provide to the electric distribution system.
Source: Pecan Street Inc.
Over the past few years, we’ve seen some of the world’s largest automakers release their first mass-market electric vehicles. Models like the Chevrolet Volt, Nissan Leaf and Tesla Model S are popular with consumers looking to reduce their carbon footprint and spend less at the pump. But the vehicles’ rising popularity has raised concerns about the effect they might have on the electric grid, particularly during the hot summer months in Texas.
Electric vehicles are the largest new home electric load in decades. Some suspected that drivers, upon returning home from work, would charge their vehicles during the evening hours (a ‘rush-hour’ time for the wires that carry our energy, which strains the electric grid). They thought that the increased need for energy would overwhelm the electric system, possibly force utilities to fire up more dirty fossil fuel power plants and offset any potential environmental benefits of the gasoline-free car. Thankfully, this line of thinking is now an idea of the past.
A recent report from Pecan Street proves that electric vehicles have less of an impact on the electric grid than anticipated. Read More
In the 1983 thriller WarGames, Matthew Broderick plays a teen-age computer geek who unknowingly signs onto a Pentagon computer while hacking into a toy company’s new computer game. Thinking that he’s simply playing a game called Global Thermonuclear Warfare, Broderick launches the game and nearly starts a nuclear war. The North American Electric Reliability Council (NERC) will hold its own war game next month with a simulated attack on the U.S. power grid.
The drill, called GridEx II, will take place on November 13-14 of this year. The participants will include 65 utilities and eight regional transmission organizations, representing most of the nation’s electricity customers. The drill will test how well the electric utility industry and the grid itself respond to physical and cyber attacks.
A NERC Critical Infrastructure Protection Committee (CIPC) working group will begin the drill by sending participants a series of simulated physical and cyber attacks, climaxing in a national security emergency. Participants will then respond and interact with each other, just as they would in a real emergency. The simulation will last 36 hours, and the CIPC working group will evaluate the participants’ responses and provide feedback on how their actions impact the ongoing scenario. After the drill, the working group will analyze the results and prepare a report on lessons learned.
When Hurricane Sandy barreled through our country’s Northeast nearly a year ago, ravaging coastlines and submerging entire neighborhoods, New Jersey suffered catastrophic effects. The state suffered more than $30 billion in damage, most of it along the Jersey shore, while an estimated 2.6 million households lost power, many of them for weeks. Five days after Sandy hit, a third of New Jersey’s homes and businesses still did not have electricity.
New Jersey Governor Chris Christie immediately sought to restore the state’s most vital infrastructure and was tireless in attracting funds for the relief effort. However, it became clear that it was imperative to not just repair damage caused by Sandy but to upgrade and modernize the state’s outmoded, century-old grid to prevent damage from the next superstorm.
Last week, Governor Christie took a positive step toward upgrading to a smarter, more flexible power grid, which is crucial to resilience, safety, and storm recovery. He announced the allocation of $25 million in federal funds to local governments to develop alternative energy projects designed to make New Jersey’s energy infrastructure resilient and reliable in the face of power outages.
Last month, the Wall Street Journal reported on an initiative at an increasing number of companies nationwide: on-site, or distributed, power generation. There are many reasons for this growing trend in corporate sustainability, along with many ramifications for the prevailing utility model in the United States – all of which highlight the importance of employing market-based solutions to create a cleaner, smarter, more resilient electric system.
Why Do Companies Unplug?
For companies such as Walmart, increasing the use of distributed, renewable generation is a vital part of larger sustainability goals, including increased use of clean energy and a call for safer ingredients used in the products the company sells. To be sure, however, even the most altruistic companies would be hard pressed to shift off the power grid without sound economic reasons.
A confluence of market factors, including tax incentives that spur attractive returns on investment, advances in solar and wind technologies and policies that encourage greater use of and investments in clean energy (like net metering and time-of-use pricing), has created an economic environment that makes distributed generation not just a viable option, but often a very attractive one. Further, off-grid power can be an effective way for companies to hedge against outages due to storms or unforeseeable catastrophes, a key idea included in the Hurricane Sandy Rebuilding Strategy.
Hawaii recently topped the national rankings for energy saving initiatives for the second year in a row. In August, the Energy Services Coalition (ESC) granted the state its ‘Race to the Top’ award for modeling excellence in energy and water efficiency. ESC’s Race to the Top challenge ranks states based on investment per capita in energy savings performance contracting. Hawaii leads with $132.25 per capita, followed by Ohio with $108.58 and Kansas with $97.77. The national average hangs at a low $37.20.
Hawaii sets a strong example for outstanding, innovative energy savings performance contracting. Performance contracts are commonly used for public-sector buildings, especially schools, which often cannot afford the upfront costs attributed to energy and water efficiency upgrades. Under many performance contracts, contractors pay the upfront costs and even guarantee net energy savings for the building owner. The contractor then recoups the investment through a portion of the resulting energy savings. This payment structure enables school districts and other public-sector entities to upgrade existing buildings with improved energy efficiency and without the worry of high upfront costs. To see why upgrades are so important for school buildings, see my other blog post here.
This commentary originally appeared on EDF's California Dream 2.0 blog.
As the 8th largest economy in the world, California remains a global leader in clean tech investment, innovation and adoption of landmark climate and energy policies. What defines our success? Our ability to try things first, set the bar high, and get policies right.
California’s Renewable Portfolio Standard (RPS) is a perfect example of that bold, pioneering spirit. Passed in 2011, the RPS required that 33% of electricity come from renewables by 2020 – a lofty benchmark, even by California’s standards. Along with self-generation and solar rooftop programs, California is successfully adding solar, wind, and other distributed generation to its resource portfolio.
In fact, renewables are successfully becoming a large part of daytime energy production, the California Independent Systems Operator (CAISO) – the organization in charge of balancing the statewide grid – is concerned over how to make up for that energy when the sun goes down while evening energy demand spikes. The question is: How can the CAISO reliably integrate renewables?
The CAISO is currently figuring out how to address this need for “flexible” power and will have a draft decision out on October 2nd. Just like people prefer to take routes they know well when they drive, the CAISO is most comfortable with what they know: familiar fossil fuels. Using clean resources and demand response instead is new territory for them that will require careful orienteering.
Earlier this year, the Alliance Commission on National Energy Efficiency Policy unveiled a plan to double nationwide energy productivity by 2030. It’s an ambitious move to greatly increase our nation’s use of energy efficiency, which represents a huge – and largely untapped – opportunity. Reducing wasted energy through efficiency cuts harmful pollution and saves people money on their energy bills. After all, the cheapest, cleanest, most reliable electricity is the electricity we don’t have to use.
Source: Church Times
Similarly, the State Energy Race to the Top Initiative (Initiative) is an incentive for states to make voluntary progress to increase their energy productivity. The U.S. Senate is moving forward to make this idea a reality. Originally introduced as a bill in June, the Initiative has now been filed as a potential amendment, sponsored by Senators Mark Warner (D-VA), Joe Manchin (D-WV), and Jon Tester (D-MT), to the Shaheen-Portman energy efficiency bill. If passed, the Initiative will stimulate energy innovation in both the public and private sectors, and allow states to tailor energy saving policies to their particular needs.
Administered by the Department of Energy (DOE), the Initiative will be broken into two phases. In the first phase, following the submission of state proposals through their energy office, DOE selects 25 states to receive funding (a combined $60 million) to move their energy productivity concepts forward. Although states have complete independence in developing and implementing their own clean energy strategies, the DOE will provide technical assistance upon request. Eighteen months later, in the second phase, the 25 states will be asked to submit progress reports to DOE. Based on their projects’ success, DOE will then select up to six states to receive a share of $122 million to continue their energy saving efforts.