Energy Exchange

Why Falling Oil Prices Don’t Hurt Demand for Renewable Energy

By EDF Blogs / Published: January 5, 2015

By: Victor A. Rojas, Senior Manager, Financial Policy, and Paul Stinson, Program Coordinator

solar greeneryIt’s understandable that many people would look at falling oil prices and wonder what it might mean for clean, renewable energy sources. Some recent headlines even suggest that cheaper crude might spell doom for the burgeoning clean energy economy.

Over the last six months, the price of crude oil has fallen by about 40 percent, currently trading below $60 a barrel, the lowest it’s been since 2009. Continuing global production and oversupply mean oil prices could remain low through the winter months and well into 2015.

While it’s true that stocks for some of the more trusted, clean energy investments are being dragged down by dipping oil prices, it doesn’t mean demand for clean energy is also suffering. In fact, as oil prices have tumbled, demand for energy efficiency and renewable energy only keeps growing.

Oil can mean energy, but energy doesn’t mean oil

The historic correlation between the price of oil and the demand for renewable energy has been increasingly weakened in today’s global markets. Like apples and oranges, we use oil and renewables to make completely different types of juice: oil primarily to produce transportation fuels, and renewables primarily to generate electricity. From an economics perspective, oil and renewables are not substitutes: when the price of one decreases, demand for the other does not decrease. Read More »

Posted in Clean Energy, Energy Financing, Investor Confidence Project, Natural Gas, Renewable Energy / Read 1 Response

We need strong national methane rules. Here’s how we get there.

By EDF Blogs / Published: December 22, 2014

By Karin Rives, EDF’s editorial manager and editor of the EDF Voices blog

New York’s statewide ban on fracking is a vindication for communities around the country that have been hit hard by unconventional natural gas production, writes Fred Krupp, Environmental Defense Fund’s president, in a Dec. 22 op-ed piece in The Washington Post.

It demonstrates what can happen when oil and gas producers erode public trust by brushing aside legitimate questions – and reinforces the urgent need for strong, sensible regulation.

The growing controversy surrounding our natural gas industry has created a decisive moment for President Obama.

As the administration prepares a policy to reduce methane emissions from the oil and gas sector, the president has an opportunity to cut both energy waste and climate pollution – in addition to protecting the ecosystem and public health.

In a second op-ed piece published Dec. 17 in The Hill, Fred lays out five principles that should guide the national methane standards the Obama administration is expected to announce soon: Read More »

Posted in Climate, Methane, Natural Gas / Read 1 Response

Untapped Incentives for Energy Efficiency Projects

By EDF Blogs / Published: December 17, 2014

By: Abraham Weiner, 2013 EDF Climate Corps Alumnus

money presentAs an EDF Climate Corps fellow back in 2013, one task that was of particular interest to me was figuring out how to help my host organization fund, in whole or in part, its efficiency upgrades. In my research, the most unique funding source I found was the energy efficiency forward capacity market.

This program allows those who invested in energy efficiency over the last several years to go back and obtain additional incentive dollars on top of traditional utility rebates. This is essentially free money for organizations who have invested in efficiency measures. In fact, when I was a fellow, I identified over $50,000 in incentives that my EDF Climate Corps host organization was eligible for from projects completed before I even arrived.

In order to explain how this program works, I need to explain who PJM is and what they do. PJM Interconnection is a regional transmission organization. They coordinate the activity of suppliers, generators, and utilities to maintain an adequate flow of electricity on the grid. Their territory touches 13 states and the District of Columbia, and they are the largest electricity market in the world. They are also unique because they allow energy efficiency to participate in their forward capacity markets. Fortunately, my EDF Climate Corps host organization was in their territory. Read More »

Posted in Clean Energy, Energy Efficiency / Tagged | Comments are closed

Smart Meters Need Effective Electricity Pricing to Deliver Their Full Benefits

By EDF Blogs / Published: December 16, 2014

By: Beia Spiller, Economist, and Kristina Mohlin, Economist

walletSmart meters, which provide detailed electricity use data throughout the day, are a critical piece of a smarter, more resilient 21st century energy system. But they are not a cure-all for modernizing our antiquated power grid.

In Matthew Wald’s recent New York Times article, entitled “Power Savings of Smart Meters Prove Slow to Materialize,” he argues that smart meters have failed to produce measurable savings. And we agree – but not because smart meters themselves have failed. Rather, most customers with smart meters don’t have access to people-powered, or time-variant, electricity pricing, which creates opportunities to save money. This is a missed opportunity for customers, utilities, and the environment.

Time-variant pricing better reflects electricity costs

Throughout most of the country, the price paid for residential electricity is the same regardless of the time of day when it’s consumed. This arrangement is a byproduct of an earlier era, one in which electricity information was difficult to convey and the actions of individual customers was impossible to gauge in real time. In practice, electricity is actually dirtier and more expensive to produce and transmit at certain times of the day, particularly when everybody wants it – for example, at 6pm during a heat wave when customers are cooling their homes. Also, during this high-demand time, energy prices spike and electric utilities flip on expensive and dirty fossil fuel “peaker” power plants to meet energy demand. From an economic point of view, it would be more efficient for electricity used at these peak demand times to have a higher price. Read More »

Posted in Clean Energy, Electricity Pricing, Grid Modernization / Read 7 Responses

Utility 2.0: New York Draws Lessons on Utility Regulation from Across the Pond

By EDF Blogs / Published: December 8, 2014

By: Gavin Purchas, Acting Director, Idea Bank, and Elizabeth B. Stein, Attorney

parliament-544751_1280When the New York Public Service Commission (Commission) opened its historic “Reforming the Energy Vision” (REV) proceeding earlier this year, it recognized that the way utility companies have been regulated is out of sync with innovations in technology, business realities, and evolving customer needs,  including the need to reduce harmful pollution. In order for utility companies to become part of the solution, the Commission has made it clear that everything is up for grabs – even the basic regulatory paradigm governing how utility companies do business in New York.

Luckily, the Commission won’t have to completely reinvent the wheel since a new regulatory paradigm from the United Kingdom could serve as a potential model. This regulatory approach is known as RIIO and is based on the following formulation: Revenues = Incentives + Innovation + Outputs. RIIO was developed by the UK regulatory body, Office of Gas and Electricity Markets, after the country recognized that its previous framework – while extremely effective at achieving cost reductions – stymied innovation. RIIO includes several elements that may be useful in the New York setting, including: Read More »

Posted in Clean Energy, Demand Response, New York, Utility Business Models / Read 3 Responses

Can Birds and Wind Energy Co-exist?

By EDF Blogs / Published: December 5, 2014

By: Stacy Small-Lorenz, Conservation Scientist, and Jim Marston, Vice President, US Climate and Energy

farm-62260_1280Climate change will have major impacts on birds and their habitats, according to a recent report from the National Audubon Society. Scientists project climate change will drastically alter and shrink habitats in the U.S. for many bird species. These findings add to mounting evidence that natural systems are at serious risk for climate change impacts, which we must act swiftly to mitigate.

One solution is to adopt more clean, renewable energy. Utilities have been investing in large-scale wind energy farms at an impressive rate, resulting in 127 million tons of avoided carbon dioxide a year in the U.S. – the equivalent of taking 20 million cars off the road.

But a tricky challenge persists in the effort to make our energy system more sustainable overall: large, utility-scale wind energy developments have been known to kill bats and birds and risk fragmenting sensitive habitats. And while wind turbines kill far fewer songbirds than building collisions or cats, raptors and bats are still at risk for turbine collisions. Read More »

Posted in Clean Energy, Climate, Energy Efficiency, Renewable Energy / Read 2 Responses