California has the most successful carbon cap program in the world. Many state actors have expressed their support for the program’s extension to at least 2030. in order to serve its intended purpose of reducing emissions while generating revenue and accounting for disadvantaged communities, California’s next carbon cap program would benefit from four crucial elements: set price collars, intelligent use of auction revenues, clear strategy for disadvantaged communities, and constraints for carbon offsets.
Permit demand surged at California’s carbon allowance auction this month, in line with our prediction: 100 percent of current vintage allowances sold at the auction floor price of $13.80. The sale will raise upwards of $450 million dollars for the state’s Greenhouse Gas Reduction Fund. Today’s results underline the California carbon market’s core strength – fundamentally strong policy design.
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. 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.
New technology has tipping points—defined by functionality, consumer preference, and price. Clean energy is passing a huge one. It is now cheaper, in many parts of the country, to build a brand-new wind farm or solar plant than simply to pay the operating costs of coal, and sometimes even natural gas. That is the kind of tipping point worth paying attention to. There is clean energy, and cash, on the table—let’s use them to accelerate our low-carbon energy transition.
As the need for flexible resources grows, there will be an increasing number of “bellwether 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.
The Fletcher Forum interviewed Mr. Hal Harvey, CEO of Energy Innovation (a San Francisco-based energy and environmental policy firm) at the 2017 Tufts Energy Conference, where he discussed energy R&D, the political landscape for energy technologies, energy infrastructure challenges, and financial opportunities for energy innovation.
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? OK, of course shifts in these kinds of institutions take longer than one year, but 2016 has seen real progress and there’s a good chance it will continue in 2017 and beyond. The electricity mix continues to churn. During this period of transition, it is particularly important for policymakers to pay close attention to proposed changes in wholesale power markets.