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.
With future federal clean energy policies in doubt, proactive clean energy policy will likely be left largely to states in the next few years. Fortunately, a New York policy proposal could show the way forward on energy efficiency for utilities. An outcome-oriented metric would focus on the policy goal of reduced energy use overall, putting a smaller emphasis on the administratively intensive business of attributing savings to specific actions.
Land-constrained Northeastern states looking to decarbonize their electricity systems and maintain affordable, reliable electricity service have renewed interest in an old resource – imported Canadian hydroelectricity. Several projects underway across America, including a successful Minnesota model, show the Northeast how to overcome traditional siting challenges to access Canadian hydro.
With such low wind and solar costs in Colorado, the question became: how can fossil plants that raise the cost of service to consumers be shut down or retired in favor of new wind and solar to support, rather than oppose the utility’s financial interests?
Like any corporation, investor-owned electric utilities have a duty to maximize shareholder profits. But today, how utilities make money must change to adapt to new grid needs, customer demands, and technological realities.
New York’s Reforming the Energy Vision (REV) initiative is transforming how utility stakeholders view the power sector’s future, but for the first time polling has revealed widespread support from consumers themselves. Evidence of strongly positive attitudes toward clean energy in general, and REV in particular, has major implications for utilities and regulators.
Texas’ cold winter and hot summer in 2011 triggered debate on how best to guarantee long-term grid reliability. In 2014, regulators decided against a standard forward capacity market for an energy-only market design. This decision has likely saved Texas consumers billions even as reliability improved, evidencing an energy transition driven by load reductions, incread renewables generation, and cheap natural gas.
Distributed energy resources (DER) and better system awareness made possible by information technology have created massive new opportunities for utilities to minimize costs while optimizing the grid system around reliable, safe, and clean service.
Independent System Operators have empowered aggregators of distributed energy resources (DERs) to sell services into the transmission grid through market mechanisms. But since the flow of electrons between DERs and the transmission grid is mediated by distribution utilities, simply opening the door for DERs to join the party only goes so far.