Energy Exchange

Debate Over a Changing Texas Energy Market Heats Up at Senate Natural Resources Committee Hearing

By Marita Mirzatuny / Published: November 27, 2013

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 »

Posted in Demand Response, Energy Efficiency, General, Grid Modernization, Renewable Energy, Texas / Tagged Capabilities Market, Capacity Market, Energy-Water Nexus, ERCOT, Third Way | Comments are closed

Verizon Invests Big in Clean Energy

By Rory Christian / Published: November 27, 2013

This commentary originally appeared on Verizon’s News Center.

Technology giant Verizon is making significant strides toward increasing the use of on-site green energy throughout its national portfolio with plans to finish more than $100 million in clean and renewable energy projects across facilities in seven states by the end of this year. The investment is estimated to reduce carbon emissions by over 15,000 metric tons each year, which is comparable to over 2,000 homes’ annual electricity use. Verizon’s video showcasing its plans includes an introduction by Environmental Defense Fund (EDF)’s very own Victoria Mills, managing director of Corporate Partnerships.

The move builds on the company’s earlier foray into clean technology, resulting in Verizon’s successful 2005 investment in a 1.4 megawatt fuel cell in Garden City, New York. Fuel cells use an electrochemical process in which oxygen and fuel (natural gas or biogas) react to produce amounts of electricity. The process produces less carbon emissions than more conventional sources of electricity, and enables the possibility of affordable on-site, user-owned power generation that is as constant and reliable as a utility and provides an attractive economic payback for customers.

When selecting locations for solar and fuel-cell energy projects, Verizon was careful to consider sites with favorable zoning requirements, utility partners and regulatory regimes. Despite being financially viable, identifying suitable projects was no simple task. Financing these projects without incentives at the federal and state levels proved impossible, and the incentives often came with conflicting timetables and were difficult to leverage. Read More »

Posted in EDF Climate Corps, General, Renewable Energy / Tagged Clean Energy, Green Bank, OBR, On Bill Repayment, Verizon | Read 2 Responses

The U.S. Can Learn from Renewable Energy Integration in Europe

By Raya Salter / Published: November 27, 2013

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 »

Posted in Climate, General, Grid Modernization, Renewable Energy / Tagged Clean Energy | Comments are closed

New Study Underscores Urgent Need to Reduce Methane Emissions from Natural Gas Operations

By Steven Hamburg / Published: November 26, 2013

You may have seen news reports about a new methane emissions study conducted by climate researchers from Harvard and seven other institutions and just published in Proceedings of the National Academy of Sciences (PNAS). The new paper provides an improved estimate of the total methane budget of the US – in other words, how much methane is being released into the atmosphere each year from all sources, including livestock and oil-and-gas production.

Based on analysis of nearly 5,000 air samples collected in 2007 and 2008 from ten communications towers located around the country, as well as 7,700 samples taken in those years from an aircraft monitoring program, the study finds that total methane emissions due to human activity were roughly 1.5 times greater at that time than previously estimated. Emissions from livestock were roughly twice as high as previous estimates. Emissions from oil-and-gas operations in Oklahoma and Texas were 2.7 times higher than estimated.

We are glad to see the methane issue getting the attention it deserves. While EDF’s work to deepen our understanding of current emissions continues, there’s no question about the need for regulation to measure and reduce these emissions. In August, scientists with the National Oceanic and Atmospheric Administration (NOAA) and the University of Colorado (UC) at Boulder published a long-awaited paper on methane leakage in the journal Geophysical Research Letters that reported an alarmingly high level of methane emissions in the Uintah Basin of Utah — 6.2 to 11.7 percent of total production for an area about 1,000 square miles. Read More »

Posted in Climate, Methane, Natural Gas / Tagged Methane, Methane emissions | Read 1 Response

The Arizona Public Service Ruling on Solar: Here’s Why it’s Win-Win

By John Finnigan / Published: November 26, 2013

John Finnigan Photo

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.

Posted in Grid Modernization / Tagged Arizona, Net metering | Read 1 Response

Fueling Cities with West Texas Wind as CREZ Comes Online

By Marita Mirzatuny / Published: November 25, 2013

As we approach the end of 2013, Texas’ power grid is soon to embark on a new clean energy path. While most people don’t get too excited about electrical transmission and distribution lines, the much awaited Competitive Renewable Energy Zone (CREZ) transmission project– set to come online in a few weeks and roll out through 2014 – could be the exception.

Approved by the Public Utility Commission of Texas (PUCT) in 2008, CREZ is a 3,600 mile transmission line that will connect remote West Texas wind energy to the eastern cities that need its power – 18,500 megawatts of power to be exact. This is enough power to energize 3.7 million to 7.4 million homes and increase available wind power supply by a whopping 50 percent.

Much like some other wind-rich regions in the country, wind in the West and Panhandle regions of Texas was partially unused, or curtailed, because local communities could not use all of the available supply and the state’s current, outmoded electric grid could not efficiently deliver the abundant energy to high-demand eastern cities. This “congestion” bottleneck forced wind farms to lower prices and at times pay the utilities to take their electricity. Read More »

Posted in Renewable Energy, Texas, Utility Business Models / Tagged CREZ | Read 2 Responses