Regulators interested in PBR are searching for real-life examples where it has worked well. Luckily, the United Kingdom began moving in this direction a few years ago. Though the U.K. is different in its public policy priorities and regulatory capacity and philosophy than many U.S. states, RIIO already provides U.S.-relevant lessons from their experience.
Last year America’s Power Plan published a five-step framework for getting the most out of grid modernization to ensure customers get the value promised from grid modernization investment programs. Electrification is one subset of these efforts, and a similar approach (adding market development as a precursor) can help regulators prepare for immense market changes. Getting the most out of vehicle electrification requires supporting market development, integrated distribution planning, defining goals, setting metrics, defining targets, and exploring changes to utility financial incentives.
A version of this article was originally published on July 25, 2017 on Greentech Media. By Matt Golden Just about every plan to achieve a clean energy low carbon future includes a large helping of energy efficiency. But while it’s true […]
Imagine that we have built enough wind and solar power plants to supply 100 percent of the electricity a region like California or Germany consumes in a year. Sure, the wind and sun aren’t always available, so this system would need flexible resources that can fill in the gaps. Filling this gap is one of the principal flexibility challenges of a low-carbon grid. But what will that flexibility cost?
In April, DOE Secretary Rick Perry issued a memorandum to his staff asking some pointed questions about the future of the electric grid as coal is retired off the system. The DOE’s publication of this memorandum presents an opportunity to uncover many outdated assumptions and understand the drivers behind the unstoppable transition from coal to other technologies. By taking each premise in turn and providing evidence-based analysis, we can see that the projected demise of coal will result in a cleaner, cheaper, and more reliable energy system.
As the need for flexible resources grows, there will be an increasing number of bellwether events – or demand spikes due to unusual temperature changes or other events. Resource developers are likely to respond by building new resources that can capture this value on the spot market and through bilateral contracts with utilities. However, not all markets are structured to reward flexibility in the same way as in energy-only markets.
States and utilities around the country are considering new utility investments in modernizing the grid. As utilities come to the table for grid modernization funds in many states, regulators and stakeholders should start planning now to get ahead of the process and generate the most benefits from those investments. APP experts Sonia Aggarwal and Mike O’Boyle have laid out five steps utility regulators can take to ensure customers reap the benefits promised by a modern grid.
Some nuclear plants consistently in the red in competitive wholesale markets have driven some to call for re-regulation and the abandonment of a free market approach. With an aging nuclear fleet, policymakers will inevitably face decisions about how long to support existing plants and how to avoid capacity shortfalls when shutting them down at the ends of their lives. Which of these options drives a cheaper, cleaner, and more reliable electric system will vary based on context.
For years, many debates on the future of the electricity system centered on getting the balance right between higher costs and lower environmental impacts. But the economics of the renewable energy transition are rapidly shifting. It’s looking like we may not have to choose between affordability and environmental impact – a cleaner, cheaper grid may be within reach.
Back in January, I suggested 2016 was the year for wholesale power market reform. So, was it? While shifts in these kinds of institutions take longer than one year, we’ve seen real progress on the four factors that made 2016 a turning point, and we believe progress will continue in 2017. America’s electricity mix continues to churn. During this period of transition, policymakers must pay particularly close attention to proposed wholesale power market changes.