Energy Exchange

ERCOT Protocols Debated In Business And Commerce Committee Hearing

By Marita Mirzatuny / Published: July 13, 2012

On Tuesday, the Business and Commerce Committee in the Texas Senate held an interim charge hearing on the Electric Reliability Council of Texas (ERCOT) protocols, including a look at the impact on system reliability, a topic that EDF is following closely. The charge as given directs the Texas Senate Business and Commerce Committee to:

Review current and pending ERCOT protocols as they apply to all generation technology, and identify those protocols that may provide operational, administrative, or competitive advantages to any specific generation by fuel type. Consider the impact any revisions to the protocols may have on grid reliability and electricity rates. Make recommendations for revisions or statutory changes to limit distortions in the Texas electrical market.”

Leaders from all parts of the Texas electric system discussed the process of creating protocols and concerns about the impact of protocols on system reliability: Public Utility Commission (PUC) Commissioner Ken Anderson gave an update on activities at PUC and ERCOT this year, many of which we’ve discussed previously. Anderson was followed by a panel including ERCOT CEO Trip Doggett.

Mr. Doggett told lawmakers that the “electric supply will be tight this summer and warned that the agency will likely declare Energy Emergency Alerts asking consumers to cut back on use. ERCOT may also implement emergency procedures, including taking industrial users offline. But blackouts would happen only if there was an extraordinary drop in generation or the state experienced record high temperatures.” Senator Leticia Van de Putte asked about the Brattle report’s suggestion of a capacity market that would allow demand response (DR) and whether the 13 percent reserve margin should be treated as a target or a minimum requirement. This was not fully addressed beyond saying the Brattle report will be discussed at a Commission workshop on July 27.

The Director of ERCOT’s Independent Market Monitor, Dan Jones, keeps an eye on the system to make sure the market is functioning efficiently and no one is exerting undue influence over the Texas market. Concerns of market manipulation have been raised by outside observers and committee members were clearly concerned about those allegations, which Mr. Jones is in the process of studying. Jones also discussed the Brattle report recommendations, including one to further increase price caps in ERCOT. Senator Kirk Watson asked how the recent cap increase, approved by the PUC to encourage more generation, could affect volatility, another issue that will be addressed along at the upcoming PUC workshop.

John Fainter, representing the Association of Electric companies of Texas (AECT), an electric industry group, stated that the industry “supports the flexibility in the process with the current protocols” and that “we will continue to have emerging technologies and that demand management should be part of the solution.”

We agree that it is important for the protocol development process to remain flexible and stakeholder driven, but the problem lies in the inertia with which these new emerging technologies and demand resources are brought into the market. The current stakeholder process tends to favor the status quo and, if that process is not successful in implementing the desired solution, consider further action through other means.

According to Brattle, “competitive DR resources can reduce our peak demand needs by 15 percent, greatly improving system reliability and playing a critical role in addressing future resource adequacy concerns.” Large commercial and industrial customers, who are already “quite engaged” in various DR programs, only represent 14 percent of the total DR potential in ERCOT. In contrast, during the summer of 2011 residential and small commercial customers accounted for 72 percent of peak load and “currently provide little DR.”

While EDF did not testify at the hearing, we submitted written testimony. Despite the current flexibility, the mechanisms by which new demand side resources expand do not necessarily allow for all stakeholders to be evenly weighed and can stymie the flexibility needed. Texas is currently among the lowest states in terms of load management, despite having the highest potential according to FERC and the Brattle Group. As ERCOT works to address resource adequacy issues, and this committee considers whether some protocols provide operational or competitive advantages to any specific generation, we believe it is important to note that ERCOT protocols generally provide operational and competitive advantages to generation resources over most demand side resources.

Therefore, we advocate the following changes to ERCOT’s market structure, including protocol revisions as proposed by Brattle:

Enabling DR to directly participate in energy markets so it can set prices directly;
Enabling all emergency DR to set prices at their individual strike prices during reserve shortage conditions, as in PJM;
The adoptions of provisions by ERCOT that allow demand resources to submit other operational data in lieu of telemetered data in order to substantially expand participation; and
If supply offers clear, they should be paid a market price, such as the economically efficient price as determined by ERCOT’s Demand Side Working Group.

As this committee, ERCOT, and the PUC consider resource adequacy and inequities within current protocols, EDF recommends paying special attention to expanding DR options for residential customers and small business. The four-market structure changes recommended above are critical to those efforts, but more work is needed to ensure that as other changes begin to impact retail rates, customers have recourse through DR programs that compensate them based on a fair market price.

Posted in Demand Response, Texas / Comments are closed

The Heat Is On In Texas, But Will The Power Be?

By Marita Mirzatuny / Published: June 29, 2012

Source: Doggett, Trip. “Texas Renewable Energy Industries Association.” ERCOT. April 9, 2012.

As Texans celebrated the Summer solstice last week, the forecast for this week’s weather was simultaneously making people uneasy. With practically all of Texas, from El Paso to the Panhandle and the Coast, hitting 100+ degrees the only solace is that we were spared triple digits for the majority of June. Despite this respite, it was by no means a cool spring. According to the National Climactic Data Center, “Texas had its warmest spring (March through May) on record and its third warmest January-through-May period“.

This heat is not only uncomfortable for the people living in it, but it also puts a strain on our electric grid as demand increases. According to the Electric Reliability Council of Texas (ERCOT), “peak-hour power consumption could exceed 66,000 megawatts (MW) Monday afternoon, surpassing the monthly records for June of last year and straining the state’s electric resources.” ERCOT goes on to conclude that it “expects to have adequate generation and surplus available to serve the state without imposing emergency programs that could lead to curtailment of power to certain industrial customers or broader rolling outages,” however warning, “that rolling outages could occur this summer given the state’s limited amount of surplus generation.”

So what is ERCOT planning for?

ERCOT is projecting weather, and thus electricity usage, using a “normal weather” baseline that reflects more a 2007 outlier (an abnormally cool and lush summer) than it does the actual trajectory of increasing temperatures year after year from 2006 to 2011. Their “normal weather” equates to a usage of 63,898 MW.

But we are breaking records yet again. In May, we already set a “monthly power demand record of 59,037 MW, surpassing the previous high set in May 2011 by 2.9 percent, and an all-time ERCOT’s peak of 68,379 MW was set last August.” And this week, as predicted, “Tuesday broke the new peak demand record it set Monday. Electric use during the 4-5 p.m. hour reached 66,583 MW, also exceeding the standing record for July”. Typically in the high 80’s this time of year, Galveston reached 100 degrees in June for the first time ever.

Despite, breaking records this June, and hitting that all-time peak of 68,379 MW last August, ERCOT’s projection for peak summer demand in 2013 is around 67,168 MW. This is a risky projection, but the good news is that this peak amount includes reductions that come from demand response (DR) and energy efficiency mechanisms thus allowing for a firm forecast of 65,649 MW instead. We argue that if restrictions were lifted for demand response (DR) and energy efficiency measures were not being gutted we would cut that amount even further, avoiding the need for ramping up polluting peaker plants and building new ones.

PUC Chairman Nelson also reflected uncertainty as to the reliability of our grid when she said, “You know, we want to get the message out of reduced usage during peak demand…At the same time, we want to get the message out ‘Texas is open for business. We want to get the message out, peak demand, turn your thermostat up a couple degrees, don’t do your laundry, those kinds of things. But we don’t want to say, ‘if you don’t we’ll have rolling outages’, OK? So, it’s a fine line to walk.”

However, as we reported a few weeks ago, parts of the PUC’s proposed rules would actually hurt energy efficiency programs and decrease the effectiveness of current programs by adding unnecessary red tape and discouraging efficiency. The same types of programs that help shore up ERCOT’s peak demand projections for next year. Right when efficiency needs to expand, the PUC instead is making it more difficult. Why this mixed message?

John Moura, the reliability assessment manager at NERC, the North American Electric Reliability Corp., said “the ‘million-dollar question’ is what will happen if Texas sees a repeat of Aug. 3, 2011, when a prolonged heat wave led to a state record for electricity demand. If power lines go down, the wind stops blowing or drought forces a power plant to stop sucking up water to cool its equipment, the state could be in trouble.”

Posted in Demand Response, Energy Efficiency, Texas / Comments are closed

General Motors Reposts EDF, Revokes The Heartland Institute

By Marita Mirzatuny / Published: April 9, 2012

(Source: www.inhabitat.com)

Did EDF’s own Jamie Fine and Colin Meehan have a little influence on General Motors (GM)? Perhaps? Just a few days after GM reposted on their website a blog written by Jamie and Colin on the EDF Energy Exchange explaining the Chevy Volt’s brief production suspension and emphasizing it is not a reason to worry about the future of electric vehicles (EVs), GM decides to change course on climate change. Whereas once they were a denier by proxy, they have now seen the light. On Friday, GM announced they are pulling funding from the climate-denial group the Heartland Institute, an industry front group with contributors like Charles Koch and the U.S. Chamber of Commerce.

This announcement came after GM’s CEO Dan Akerson gave a speech last month stating that they are operating under the assumption that climate change is happening. This new messaging for GM is now consistent with their advances in alternative auto technologies such as the Volt. It would be difficult for many consumers to choose the Volt while wondering why GM takes those dollars – $45,000 over the last 3 years including 2012 – and funds active climate deniers like the Heartland Institute.

As we told you a few weeks ago, the recent pause in production of the Volt is not a reason to worry. Despite not reaching their rather optimistic sales projections, the Chevy Volt and Nissan Leaf are actually beating the sales history of their hybrid cousins. When the Toyota Prius and Honda Insight were offered as the first commercially available hybrids in 2000, only 9,350 cars were sold. The Prius is now among the best selling cars in the U.S. with over 2 million vehicles on the road. Meanwhile just last Friday, GM announced that record Volt sales in March are reportedly leading them to consider ramping up production. Change takes time and if the Volt is already outpacing its hybrid competitors, we can potentially expect millions of Volts on the road in the next decade. But you wouldn’t believe that if you listened to the naysayers.

Maybe after being on the receiving end of faux alarmists – who are all too excited to write the obituary for “Government Motors” and a fossil free future – GM is rethinking its support for groups that ignore the truth and distort facts just the same.

Posted in Climate, Electric Vehicles / Comments are closed

Clean Energy And The 2013 Budget Proposal

By Marita Mirzatuny / Published: February 15, 2012

Source: EcoWatch

In his State of the Union Address last month, President Obama made energy issues a focal point. Taking a clear stance, he said that it was time to “end the taxpayer giveaways to an industry that’s rarely been more profitable, and double-down on a clean energy industry that’s never been more promising.” With this statement, President Obama is addressing the reality that government support for new energy sources is the lowest it has been in any point in U.S. history, according to a report by DBL investors. “During the early years of what would become the U.S. oil and gas industries, federal subsidies for producers averaged half a percent of the federal budget. By contrast, the current support for renewables is barely a fifth that size, just one tenth of one percent of federal spending.”

Going further in addressing climate change the President said, “I know that there are those who disagree with the overwhelming scientific evidence on climate change. But here’s the thing. Even if you doubt the evidence, providing incentives for energy efficiency and clean energy are the right thing to do for our future, because the nation that leads the clean-energy economy will be the nation that leads the global economy, and America must be that nation.”

On Monday he unveiled his budget proposal for FY 2013. So, how does it hold up to the goals of his speech with regards to a clean energy future?

The Good News:

– The world’s largest energy consumer, the Department of Defense (DOD), would receive approximately $1 billion for energy conservation efforts. This would further the DOD’s increasing commitment to renewable energy which now makes up 8.5 percent of its energy production and procurement.

– With a 3.2 percent increase from the year before, the budget proposes $27.2 billion for the Department of Energy. Of that:

Research and development for energy efficiency, advanced vehicles and biofuels would get $2.3 billion
Renewable energy sources will get a $522 million increase and an additional $174 million for a revamped industrial technology-advanced manufacturing program.
$12 million would be directed towards multi-year research investments in safer natural gas infrastructure in order to reduce risks associated with hydraulic fracturing in shale formations.
Furthermore, pipeline safety would receive a 70 percent, $64 million, increase.
This 3.2 percent increase comes just as a report vindicates the DOE loan program, confirming that the “overall loan portfolio as a whole is expected to perform well and holds less than the amount of risk envisioned by Congress when they designed and funded the program.” Energy Secretary Steven Chu states that, “we have always known that there were inherent risks in backing innovative technologies at full commercial scale, and it is very likely that there will be other companies in the portfolio that won’t succeed. But the vast majority of companies are expected to pay the loans back in full, on time and with about $8 billion in interest — while supporting a total of 60,000 American jobs and helping us compete for a rapidly growing global industry.”

The Bad News:

– Seeming to cave to current attacks, the fiscal 2013 budget proposes stifling cuts to the Environmental Protection Agency (EPA):

Reducing current agency funding levels by $105 million, the EPA is slated to receive $8.3 billion. This would make for the first time since 1994 that the agency’s budget was cut for three consecutive years.

– Counterproductive cuts to USDA’s Natural Resources Conservation Service:

Proposed cuts for Farm Bill conservation programs would be about $600 million.
Already Congress has cut conservation funding by $2.8 billion over the last five years, representing 81 percent of the nearly $3.5 billion in Farm Bill spending cuts over that time period(FY 2008-2012).

Despite some disappointment, overall we at EDF are pleased that the President chose to not only speak to the importance of a clean energy future but that his budget reflects this as well.

Elgie Holstein, our senior director for strategic planning here at EDF and a former associate director of the Office of Management and Budget for Natural Resources, Energy and Science, sums it up well, “despite some flaws, the president’s budget is a big net plus for the environment, and we urge Congress to embrace the positive aspects of it.” That latter part will be the true challenge.

Vice president of EDF’s Energy Program, Jim Marston continues: “The fact is: clean energy and responsible environmental policy make good economic policy as well because they create jobs, while cutting energy and medical bills for American families. Look at it this way: environmental conservation is cheaper than environmental cleanup, just like preventive medicine is cheaper than emergency room treatment. We applaud the President’s support of job-creating, clean energy programs.”

The President understands that getting our energy future on the right path is an essential foundation that our country needs to be competitive, provide jobs and protect our health and environment.

Posted in Climate, Energy Efficiency, Natural Gas, Renewable Energy, Washington, DC / Read 2 Responses

Switch Is Flipped In Webberville, Texas: 30 MW Of Solar Now Online

By Marita Mirzatuny / Published: January 9, 2012

Driving through the bustle of downtown Austin, past the sleepy, revitalizing East Side, one reaches the pastures and prairie countryside of Travis County. It is on this thirteen mile trek, the smell of wood smoking BBQ wafting the air that you come to the village of Webberville.

While the settlement dates back to 1827, it is Webberville’s modern day activity that will put it on the map. Friday morning, SunEdison along with the mayor of Webberville, the City of Austin, and Austin Energy held the grand opening ceremony and ribbon cutting for the Webberville Solar Project. Webberville Mayor Hector Gonzales summed it up well, stating that today the “past shakes hands with the future.”

With its “rough reputation” dubbing it Hell’s Half Acre, Webberville now has 380 acres of solar generating power to add to its claim to fame. The 127, 728 panels will ultimately generate 30 MW of solar energy and will offset 1.6 billion pounds of carbon dioxide over the next 25 years. The facility utilizes solar PV technology that is mounted on horizontal-axis trackers rotating in the East-West directions with the sun’s position in the sky to optimize electricity production.

All of this translates to producing enough electricity to power 5,000 average-size homes annually. The launch contributes to Austin Energy’s generation goal of 35% renewable energy by 2020 and creates green jobs for the area. “It is the largest active solar project of any public power utility in the country, the largest active project in Texas and among the largest of all operating solar projects in America.”

If there are two things in Texas that we have plenty of, besides oil and gas, it’s sunshine and pride and we are proud to have this solar farm on our soil.

Posted in Texas / Tagged Energy Crunch | Comments are closed

Top 10 Clean Energy Stories Of 2011

By Marita Mirzatuny / Published: January 5, 2012

Although we have said goodbye to 2011, the advances and achievements in clean energy last year have propelled us into 2012 and will only become more widespread and successful with each passing year. As Steven Lacey at Climate Progress points out in his “Top 10 Clean Energy Stories of 2011”, it was an “odd” year for the clean energy sector, but with great successes. While public demand favors a move to a clean energy economy and environmental sustainability necessitates it, some politicians and their corporate cronies are doing their best to demonize and stall the inevitable leap forward. The reasons why there is obstruction are obvious but it still is a pretty bad calculation and ultimately they are on the wrong side of history. My colleague Colin Meehan responded just a few weeks ago to Grover Norquist’s ill-informed rant against renewable energy. But once we break through the noise and distraction, the reality of what the future holds becomes encouraging. While deniers love to isolate the Solyndra scandal as their defining proof that we must keep and accelerate fossil fuels, it hardly defines the activity and achievements on the ground. In fact, as Lacey articulates, there are much better parameters to judge the new energy revolution:

1. Renewable Power Investments Top Fossil Fuels for First Time

According to Bloomberg New Energy Finance, “electricity from the wind, sun, waves and biomass drew $187 billion last year compared with $157 billion for natural gas, oil and coal.” And they project that renewable energy investments will “double over the next eight years and reach $395 billion per year.”

2. Cost Reductions Make Solar PV Competitive

While complete grid parity will be more of a phased process than a singular result, according to Tom Dinwood, CTO of SunPower, Dan Shugar, CEO of Solaria, and Adam Browning, Executive Director of Vote Solar Initiative, “solar PV is no longer a fringe, cost-prohibitive technology, but rather, a near-commodity that is quickly becoming competitive with nuclear, natural gas, and soon coal.” Solar power is quickly becoming more than cute.

3. Regional Greenhouse Gas Initiative (RGGI) Is A Success

As the aforementioned deniers (in this case the Koch Brothers front group Americans for Prosperity) cried wolf about the RGGI, claiming it would “inflate bills 90% in New Jersey,” the reality of the situation was much different –“RGGI generates greater economic growth in every one of the 10 states that participate than would occur without a carbon price.” This is from a new report, which found that “America’s first mandatory, market-based carbon cap and trade system added $1.6 billion in value to the economies of participating states, set the stage for $1.1 billion in ratepayer savings, and created 16,000 jobs in its first three years of implementation.

4. Pension Funds & Large Companies Invest Big in Energy Efficiency

Further proving you can bet on energy efficiency projects to pay off, two of the largest US pension funds, CalPERS and CalSTERS announced in September they would invest $1 billion toward efficiency projects. In June, the AFL-CIO and the American Federation of Teachers announced over $150 million in similar investments, which utilize product retrofits that have over 90 percent of the content made right here in the USA. “If we retrofitted just 40 percent of the nation’s residential and commercial building stock, we would mobilize a massive amount of domestic labor— more than half a million (625,000) sustained full time jobs over a decade. This would generate as much as $64 billion per year in cost savings for U.S. energy ratepayers. That’s means $300 to $1,200 in savings for individual families.” These are wise investments that “out-perform investments in new oil and gas exploration as a form of job creation or economic stimulus by a factor of 3-to-1.”

5. Geothermal Potential is Massive

Texas’ own SMU recently released a map that shows how much “potential [geothermal] energy is locked beneath America.” While there is still a lot of ground to cover, so to speak, in realizing this resource, we at least know that under our feet lies a huge source of impending power.

6. Green Jobs Reach 2.7 Million

While much of the economy has declined and stagnated over the last few years, green jobs have actually increased, with the “clean economy growing by 8.3% from 2008-2009 — almost double what the overall economy grew during those years.” Not only is this providing jobs in the sectors of energy, transport, building, etc. they are better paying jobs as well at “$7,727 more than the median wages across the broader economy.”

7. Google Phases Out Clean Energy R&D in Favor of Deployment

(credit: www.thinkprogress.org)

While it was reported that Google was abandoning renewables, the media failed to accurately depict the situation. The truth is that Google is “now shifting its focus to project financing rather than R&D, citing the need for more sophisticated research on CSP technologies beyond Google’s scope, and the rapidly changing economics of solar PV switched.” This includes investing more than $850 million in renewable technologies.

8. America is a $1.9 Billion Exporter of Solar Products

Despite the notion that China is outperforming the U.S. in this field, a report from GTM Research and the Solar Energy Industries Association found that the U.S. has a $247 million trade surplus with China. Here is a great chartto illustrate:

9. What Free Market? Subsidies Have Always Been a Big Part of Energy Industry, New Report Shows

This one is pretty self explanatory and frankly, states the obvious. I don’t think we needed a study to tell us that the fossil fuels lobby on Capitol Hill has a pretty good ROI. But it’s always nice to have backup. There is really no clearer depiction of hypocrisy than with the false outrage, served with a little red herring on the side, associated with the Solyndra scandal (as mentioned above). While railing against subsidies for clean energy, these same politicians are not only all too willing to subsidize fossil fuels but prior to politicizing it, were keen on renewable energy monies as well. As Lacey points out, “apparently, many in Congress have forgotten about the last 100 years of government investments in oil, gas and nuclear — all of which have far outpaced investments in renewable energy like solar PV, solar thermal, geothermal and wind.” To be clear, “energy industries have enjoyed a century of federal support. From 1918-2009, the oil and gas industry received $447 billion (adjusted for inflation) in cumulative energy subsidies. Renewable energy sources received $6 billion (adjusted for inflation) for a much shorter period from 1994-2009. There is a striking divergence in early federal incentives. For example, federal support for the nuclear industry overwhelms other subsidies as a percentage of federal budget, but equally striking is the support for oil and gas which was at least 25% higher than renewables, and in the most extreme years 10x as great.”

10. Being Anti-Clean Energy is Bad Politics

Despite all the findings listed in this blog, for some reason those with a vested interest in maintaining the fossil fuel polluting status quo just don’t get it! Americans want to be free of fossils and want to embrace the new energy revolution. According to a poll by the non-partisan Civil Society Institute, “77% of Americans— including 65% of Republicans surveyed — believe ‘the U.S. needs to be a clean energy technology leader and it should invest in the research and domestic manufacturing of wind, solar and energy efficiency technologies.’” And as a segue from number 9 on the list above, the poll found that, “Americans support subsidies for renewable energy over fossil energy 3 to 1. When asked to choose between only subsidizing clean energy or fossil energy, 38% of respondents said they’d choose renewables, while 13% would choose fossils.”

2012 is going to be an intense year. February brings us a leap on the 29^th, politicians will be battling each other leading up to November, and then a new sun begins, according to Mayan tradition a month later on December 21^st. Let’s hope that the clean energy momentum continues and that the will of the people and the condition of the environment that sustains us all is truly at heart. The future looks so bright!

Posted in Climate, Energy Efficiency, Renewable Energy / Read 1 Response