This page provides a list publications that have been written by or in collaboration with Energy Innovation staff. We provide a brief description of each entry to help you navigate to the publications that are of interest to you.
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The rush to build more than 60 gigawatts of natural gas plants and pipelines risks tens of billions in investment and a trillion dollars in consumer costs by 2030. This report outlines these evolving risks for shareholders, lays out investor strategies to accelerate the clean energy transition, and shows how clean energy cuts utility investment risks from over-reliance on natural gas while providing new growth opportunities supporting decarbonization.
EI partnered with ACEEE to identify states using performance incentive mechanisms (PIMs) for strategic demand reduction (SDR).
New research using the California Energy Policy Simulator finds California climate policies risk overshooting the state’s 2030 goal by 25 MMT CO2e, but six policy fixes can hit the goal and deliver $21 billion in benefits.
Hong Kong currently does not have a long-term decarbonization strategy or target beyond 2030, but must formulate a long-term decarbonization plan to conform with short- and medium-term actions. World Resources Institute and Civic Exchange collaborated with Energy Innovation to develop the Hong Kong Energy Policy Simulator (EPS) to provide technical support for developing Hong Kong’s 2050 deep decarbonization strategy. This technical note describes the structure, input data sources, outputs, limitations, future development, and online interface of the Hong Kong EPS.
At least 36 GW of uneconomic coal-fired capacity is forecast to be retired by 2024. These policy briefs highlight how to help utilities balance stakeholder interests, facilitate the financial transition away from uneconomic coal, and help states embrace clean energy.
Utilities can be regulated to address their monopsony market power so that competitive solicitations result in many bidders and low prices for generation projects, creating benefits for consumers and utility shareholders. This brief highlights lessons from Colorado’s experience leveling the playing field to ensure competitive bid results in the state are achievable as part of the financial transition away from uneconomic coal generation.
Energy Innovation’s net zero emissions by 2050 illustrative policy package helps put the United States on a pathway to achieve the Paris Agreement goals and abates more than 6 Gt of emissions a year by decarbonizing America’s industrial, transportation, electricity, and buildings sectors.
The Trump Administration’s proposed fuel economy standard rollback and emissions standards freeze will harm consumers and the environment. This research note finds the proposal would cost the U.S. economy up to $400 billion through 2050, increase U.S. emissions up to 10%, and gasoline use up to 7.6 billion barrels through 2035. It would also cost Canada up to $70 billion through 2050 and increase its emissions up to 11% by 2035.
Competitive wholesale electricity markets are at a turning point. These papers outline questions emerging about wholesale market reform and introduce two pathways for markets to evolve.
America has entered the “coal cost crossover” where existing coal is more expensive than cleaner alternatives. Today, local wind and solar could replace 74 percent of the U.S. coal fleet at an immediate savings to customers. By 2025, this number grows to 86 percent of the coal fleet.
This research paper explores energy transition impacts on competitive power markets, finding every U.S. organized power market except ERCOT is oversupplied due to seven oversupply drivers. Oversupply slows decarbonization, but market operators and load serving entities have options to responsibly manage the power system through this transition. The full version of this paper was published in the March 2019 issue of Current Sustainable/Renewable Energy Reports, and is available upon request. https://link.springer.com/article/10.1007/s40518-019-00123-6
By analyzing publicly available financial information, policymakers and utility stakeholders can identify where running existing fossil fuel generation costs more than replacing it with new wind or solar. A suite of financial instruments can facilitate and reduce costs of this financial transition away from fossil fuels toward clean energy. This brief uses Colorado’s experience transitioning from coal to clean energy as a case study analyzing existing generation costs, and introduces financial tools to help electric utilities that own fossil generation manage the clean energy transition.
Early retirement of uneconomic coal assets can improve shareholder earnings if a utility is allowed to reinvest capital in new renewable energy generation. When building new renewables is cheaper than operating existing coal, swapping steel for fuel adds value for investors, customers, and the environment. This brief addresses equity shareholder perspectives and suggests how potential funding sources can mitigate impacts on communities and workers affected by early plant retirements while improving environmental performance.
Depreciation accounting recognizes asset value reduction over time. For coal plants, depreciation determines the value remaining when plants retire early. Depreciation is an important tool for transitioning away from older assets, such as coal plants, to cheaper resources, such as wind and solar. This brief reviews how depreciation schedules affect utility earnings and ratepayer costs, as well as other stakeholder interests.
When electric utilities transition from fossil fuels to clean energy, they must address unrecovered investment balances. Depreciation schedules are often accelerated to line up with earlier-than-planned retirement dates, which can increase short term consumer rates. This brief reviews how utilities can refinance undepreciated balances on plants in service to lessen the consumer rate burden, primarily through replacing some portion of equity with corporate debt.
Navigating Utility Business Model Reform seeks to establish foundational elements of different reform options, poses key questions to explore their applicability, identifies illustrative experiences for ideas and concepts, and explores policy implementation options to help spur action. Navigating Utility Business Model…
Energy Innovation’s new book Designing Climate Solutions is the first policy manual for low-carbon energy and is the first book to identify the 10 policies, applied to the 20 highest-emitting countries, that can reduce emissions fast enough to stay below 2°C of global warming and avoid the worst impacts of climate change.
Cement manufacturing produces 5.6% of global CO2 emissions. This research finds that capturing 80% of cement’s process emissions (and no thermal emissions) by 2050 can make cement carbon-neutral, as natural carbonation offsets remaining emissions. If thermal fuel supply were fully decarbonized by 2050, a 53% process emissions capture rate achieves carbon-neutral cement. Higher capture rates than these would provide net negative CO2 emissions and the possibility that simply making concrete could reduce atmospheric CO2 concentrations.
The Trump Administration has proposed directing funds to keep uneconomic coal and nuclear plants online. This research note assesses the $2 billion in subsidies that would be needed to keep the six plants owned by FirstEnergy in the Ohio Valley in operation, and finds the funds would be better spent supporting economic transition for the power plant communities and displaced workers.
UPDATE: We updated this analysis in August 2019 to incorporate newer data and assumptions in a new research note. The Trump Administration’s proposed fuel economy standard rollback and revocation of California’s ability to set vehicle emissions standards will harm consumers and the environment. This research note finds the proposal would cost the U.S. economy up to $457 billion through 2050, while increasing U.S. emissions up to 11% and gasoline use 20% through 2035.
This research paper outlines how competitive electricity markets are undergoing a rapid transformation from systems with large, inﬂexible baseload resources to ones with smaller, modular, variable resources. Enabling a smooth transition requires making the grid more ﬂexible, and a signiﬁcant amount of unused ﬂexibility exists in the system, but harnessing it requires market rule changes.
This research paper reviews what it would take to achieve energy system decarbonization, including parts of the energy system that are particularly difficult to decarbonize including aviation, long-distance transport, steel and cement production, and provision of a reliable electricity supply. The full version of this paper was published in the June 2018 issue of Science http://science.sciencemag.org/node/711939.full
Carbon pricing is increasingly used to reduce carbon emissions through carbon taxes and cap-and-trade programs, and the most important new development in carbon pricing is China’s national carbon market. This research note discusses how California’s “consignment auctioning” approach to allowance distribution provides an option for Chinese policymakers to introduce auctioning while cushioning economic effects on covered entities through free allocation.
“Emerald Cities: Planning for Smart and Green China” is the first comprehensive manual detailing how to build a sustainable city from the ground up in China, laying out green building and urban sustainability practices for low-carbon city planning and construction in China and abroad. The manual proposes 10 principles to help set a new development direction for Chinese cities and aims to establish green, healthy and economic vibrant cities, while solving pollution and livability challenges faced by China’s cities. The manual is available for free download in English and in Chinese.
Canada’s government has proposed the ambitious Pan-Canadian Framework (PCF) policies to help achieve its emissions reduction goals. The Canada Energy Policy Simulator was created to evaluate the PCF, and this report finds that even if the PCF is fully implemented, Canada’s 2030 emissions will miss its goal by 161 million metric tons (MMT), a gap 3.7 times larger than the government’s 44 MMT predicted shortfall. Extending and strengthening PCF policies would allow Canada to come much closer to its target, save money, and save human lives.
The U.S. Chamber of Commerce’s proposal to raise the federal fuel user fee (gas tax) $0.25 per gallon has driven debate over U.S. transportation funding. This research note finds the proposal would generate $840 billion in federal government revenue by 2050 and cost U.S. drivers $30 billion per year by 2022. It would also increase annual EV sales by 100,000 per year and add 1.2 million total additional EVs to U.S. roads while reducing annual fuel consumption 40-45 million barrels and cutting total fuel use more than 1.3 billion barrels, both by 2050, and would equal a national carbon tax of $29 per ton.
New data show that carbon emission allowance oversupply has grown in the Western Climate Initiative cap-and-trade program linking California, Ontario, and Quebec. Left unaddressed, this oversupply is estimated to reach 270 million metric tons by 2020, resulting in higher than intended emissions. This report details how a straightforward lowering of future caps to counter early oversupply solves the problem.
Utilities should consider two business models when considering their role as distribution system operators (DSO). In the first, the utility would represent a DSO and run the centralized system, with full visibility into available resources for real-time load balancing and responsibility for construction and maintenance, and be compensated on meeting policy goals. In the second, the utility owns the system, reveals its needs, with a separate DSO entity meeting those needs and integrating all assets including DERs.
DOE’s cost-recovery proposal would roil U.S. wholesale power markets to keep uneconomic coal and nuclear generation operating. This report finds DOE’s proposal could cost customers up to $10.6 billion per year, with up to $7.3 billion borne by customers in PJM Interconnection. More than 80% of the coal generation subsidy would go to just five companies and nearly 90% of the nuclear generation subsidy costs would go to just five companies.
America’s electricity market operators are increasingly looking for ways to make their systems more flexible as more renewables, flexible demand resources, and energy storage come online. This report outlines which types of flexibility are needed for grid reliability, offers advice on how markets can ensure sufficient flexibility, and will help identify ways to manage the grid with a rapidly evolving mix of resources.
A presentation on the future of U.S. wholesale markets, three potential outcome, and related implications for retail power markets from Energy Innovation Vice President Sonia Aggawal.
New modeling using the Energy Policy Simulator forecasts electric vehicle sales will make up 65% of new light-duty vehicle sales by 2050, and could reach up to 75% by 2050 in the event of high oil prices or strong technology cost declines. The modeling includes expected market share expansion and penetration levels, the effects of internal factors like battery prices, external factors like oil prices and government policy support, and related national electricity demand.
Restructured wholesale electricity markets serve stakeholders by providing three principal services: economically efficient real-time dispatch, incentives for resource adequacy and long-term cost recovery. Because at least two of these functions happened dynamically through market forces, future scenarios for clean, affordable…
A court decision to vacate EPA’s rule to reduce hydrofluorocarbons (HFCs) could cost at least 3.6 billion metric tons avoided emissions through 2050 and limits U.S. options to fully implement the Kigali Amendment to the Montreal Protocol, which could cut cumulative U.S. emissions by 9.5 billion metric tons. This research note report analyzes potential impacts of the court decision, as well as alternatives for the U.S. to fully implement the Kigali Amendment.
For the first time last year, a portion of the current vintage allowances offered in one of the California-Quebec cap-and-trade program’s quarterly auctions went unsold. This report provides a quantitative analysis of the supply and demand for carbon allowances in the linked California-Quebec cap-and-trade program to help discern the role that temporary or systemic oversupply may be playing.
The Northeastern U.S. is simultaneously home to the most ambitious regional renewable energy goals and the most constrained lands in the U.S. This paper builds upon past work on siting policy to examine siting solutions tailored to meeting renewable energy demand in a land-constrained region. Along with creative new approaches to renewables siting, the paper examines four approaches to reduce the need for land-intensive utility-scale renewables.
Every utility regulatory model has embedded incentives. This list is intended to help state policymakers and other stakeholders pinpoint questions they can ask and answer to explore how incentives from cost of service regulation and performance regulation relate to today’s power system goals.
The prospect of large grid modernization investment triggers a key question – is it worth it? As different states consider upfront investments in modernizing the grid, regulators need ways to ensure utilities maximize the potential benefits of grid modernization. This white paper provides program design considerations and metrics that can guide utility investment and increase the chances that customers get the most out of grid modernization efforts. A version of the paper was also published in Electricity Policy, and can be found here.
Paris marked an unprecedented political commitment to reduce the threat of climate change. Marrakesh is the moment to move from what we must do to how we will do it. This collection of resources includes reports on how to design and implement policies to meet the world’s climate goals, as well as design guides for four of the world’s top energy policies: 1) carbon pricing, 2) vehicle performance standards, 3) vehicle and fuel fees and feebates, and 4) urban mobility policies. More of these policy-specific guides are coming soon.
How can Mexico achieve its climate targets and work toward the Paris Agreement goals? This working paper addresses this question by identifying and evaluating the key climate and energy policy options available to Mexico to support the implementation of its INDC. The analysis shows that Mexico can meet its unconditional and conditional targets while at the same time saving money and lives.
Urban Sustainability Planning for Mexico City offers recommendations for the City’s new Urban Development General Plan. Energy Innovation joined the government of Mexico City, colleagues from the Mario Molina Center for Energy and the Environment, and other Mexico City-based experts for this project, which draws on the framework developed in 12 Green Guidelines.
This report provides insight into which climate and energy policies can most cost-effectively drive down China’s emissions. The report’s recommendations are based on results from the Energy Policy Simulator (EPS), which assesses the combined effects of 35 climate, energy, and environmental policies on a variety of metrics.
This paper synthesizes the reasons for California’s successful climate policy. It considers the relative strengths and weaknesses of different types of policy, concluding that performance standards have led in reducing statewide emissions. Market failures beyond the lack of a price on carbon mean the best policy approach combines the three types of policy: performance standards, economic signals, and research and development (R&D).
This paper explores which regulatory models align utility profit with societal value under scenarios in which traditional, utility-owned solutions may not be optimal for customers. The cases in this paper offer insight into whether and how cost-of-service regulation and its alternatives (performance incentive mechanisms and revenue caps) can align utility shareholder values with societal values.
The grid will require a substantial transformation as more renewable sources come online. Some critics argue technological, financial, and institutional barriers will prevent significant decarbonization of the power sector, but four common clean energy myths are easily debunked by facts and real-world experiences showing the feasibility of a low-carbon energy future.
The climate problem is enormous: It threatens much of modern civilization, and its principal source, in burning hydrocarbons, is embedded in most of the modern economy. But a handful of insights, grounded in careful math, can clarify the situation, and point out a straightforward path to a reasonable climate future. This paper cuts through the clutter, and points to a reasonable, cost-effective solution to climate change, with clear steps to get there.
Given the momentum toward performance-based regulation across the country, these briefs provide perspective on how regulators might decide to design performance incentive mechanisms for success.
This white paper is the first in our Incentive Mechanism Design, series, which offers perspective on how regulators might decide to design performance incentive mechanisms for success. The paper examines a straw proposal for a new performance incentive to motivate utilities to reduce peak demand–a driver of investment in the electricity system–improving the affordability and environmental performance of the electricity system.
This white paper is the first in our Incentive Mechanism Design series, which offers perspective on how regulators might decide to design performance incentive mechanisms for success. The paper explores different approaches to simplify the measurement of energy efficiency savings to better align utility incentives with efficiency outcomes. These metrics can be helpful for many states where utility revenue is linked to energy efficiency, but their programs are bogged down in tedious and controversial evaluation, measurement, and verification requirements.
This white paper is the first in our Incentive Mechanism Design series, which offers perspective on how regulators might decide to design performance incentive mechanisms for success. The paper examines California’s Risk-Reward Incentive Mechanism (RRIM) as a case study to show that, while counterfactuals may be appropriate as an adjustment mechanism, they can also lead to unfair outcomes and unnecessary regulatory conflict.
An abundance of new technologies are now available to produce cleaner, cheaper electricity. But in order to take advantage of them, system operators must build a flexible electricity grid. This paper reviews the types of resources that can deliver grid flexibility and provides case studies and recommendations for how to incorporate flexibility into grid systems.
This chapter in Future of Utilities – Utilities of the Future explores the nature of the customer-grid interface from the point of view of the customer. Customers are reconsidering the compromises they make given their new options for distributed energy services. This chapter exposes the underlying nature of the transactions happening at the customer/grid interface. The chapter uses analogies from the commerce and finance world to describe the currency-like features of electricity, and proposes ways of integrating new transactions into a future “fractal” grid.
Even the most well-intentioned energy policies will not meet their desired goals if they aren’t designed and implemented correctly. A handful of design principles, when properly applied, make for highly effective policies. This paper, an update from the original “Policies That Work” report, describes how to determine the right goals, choose the right policy approaches, and design and implement the specific policies to meet these goals.
Negotiations by the world leaders at the COP21 summit should be guided by California’s experience. This paper describes how performance standards and carbon pricing mechanisms have helped the state reduce emissions and increase renewable energy while creating economic growth, putting the state well on its way to achieving its emissions goals.
Over the past several years, the world has witnessed an upward trend in climate and clean energy investment. This has helped drive down costs of innovative low-carbon technologies, which has enabled their incredible market growth. In many situations, renewable energy sources, such as wind and utility-scale solar, are now cost-competitive with traditional fossil fuel sources. The following factsheet highlights the most current data on global investment in low-carbon technologies.
California can accomplish its goal of reducing carbon emissions 40% below 1990 levels by 2030 with proper attention to smart growth. By emphasizing better land use patterns, and supporting better transit and more walkable neighborhoods, carbon reductions of this magnitude are not just technically feasible, but would also save billions of dollars on infrastructure, fuel, and health costs while empowering economic growth and helping counter income inequality.
This paper presents case studies about performance management in publicly-owned utilities, drawing out concrete steps that can support municipal utilities, public utility districts, and cooperatives to adapt to changing technology and market trends. These steps – which involve taking “no regrets” actions, exploring evolutions in government, and considering more drastic action if performance lags – can enable POUs to deliver greater value to their customers.
CDBC’s Green and Smart Urban Development Guidelines highlight the key design features that make for a healthy, prosperous, and vibrant city. Energy Innovation, in partnership with China Development Bank Capital (CDBC) and Energy Foundation, developed these guidelines to provide a foundation for sustainable urban growth in China.
12 Green Guidelines lays out a dozen key features that constitute sustainable cities. These guidelines fall into three key categories: urban form, transportation, and energy and resources. These guidelines are beneficial, measurable, and practical, and they concisely describe the foundations of sustainable urban development. This report defines each of these guidelines; provides a rationale; explains the key economic, environmental, and social benefits; provides a brief case study; and lists key best practices for optimal implementation.
Six Smart Guidelines highlights a series of smart technologies that cities can use to improve livability and comfort, as well as advance sustainable urban development. When done in addition to the 12 Green Guidelines, smart technologies can capture additional economic, environmental, and social benefits. The Smart Guidelines fall into six key categories: smart telecommunications, smart mobility, smart energy management, smart governance, smart public services, and smart safety.
The Pearl District in Portland, Oregon is a model for why CDBC’s Green and Smart Urban Development Guidelines are key to economically prosperous and sustainable urban development. The Pearl District is a world-renowned urban redevelopment project. This case study reveals the regulatory, technical, and financial elements that bolster the guidelines.
This case study provides a comprehensive look at the sustainable urban development process of Hammarby Sjöstad in Stockholm. The study is organized around each of the Green Guidelines and expands on the goals, processes, and mechanisms that made Hammarby Sjöstad a sustainable and economically prosperous urban development.
In October 2015, Energy Innovation launched Energy Policy Solutions, an assessment of climate and energy policies to help meet decarbonization goals. We created a computer model, the Energy Policy Simulator, to quantitatively measure the cost and emissions impacts of more than 50 policies across all economic sectors. This page summarizes key findings from our model analysis, including recommended policy packages for meeting the U.S. 2025 emissions target and the Clean Power Plan target.
Energy Innovation’s Policy Solutions, based on transparent data and objective analysis, provide a roadmap to a clean energy future for America. Policy Solutions is a coherent set of the most cost-effective set of 15 policies to achieve the United States’ emissions reductions goals, and save hundreds of billions of dollars between 2016 and 2030.
Discover the most effective policies to decarbonize America’s economy at the lowest cost. The Energy Policy Simulator was designed to empower decision makers to find the best course toward a low-carbon U.S. economy. The Energy Policy Simulator works in real-time to measure the cost and emissions impacts of more than 50 climate and energy policies.
Energy Innovation identified a cost-effective package of six policies that the U.S. could use to meet the Clean Power Plan at a national average scale. This scenario actually exceeds the emissions goals in later years, as policies designed to meet earlier targets continue to reap benefits in later years, and saves the U.S. more than $40 billion between 2016 and 2030.
It pays to adopt smart energy policy sooner rather than later. If policymakers wait just four years (until 2020) to take action and want to achieve the same emissions reductions by 2030, they risk nearly $400 billion in additional costs. Policy implementation should start early to take advantage of natural capital stock turnover and the increased productivity of an efficient system.
This paper, an addendum to An Adaptive Approach to System Optimization, presents a series of case studies on various ways to integrate cost-effective distributed technologies that have run into outdated regulatory models. It identifies strengths and weaknesses associated with utility-owned and operated DERs, third-party-operated DERs, and customer-operated DERs.
California can accomplish its goal of reducing carbon emissions 40% below 1990 levels by 2030 with proper attention to Smart Growth. By emphasizing better land use patterns, and supporting better transit and more walkable neighborhoods, carbon reductions of this magnitude are not just technically feasible, but would also save billions of dollars on infrastructure, fuel, and health costs while empowering economic growth and helping counter income inequality.
This paper describes Energy Innovation’s Energy Policy Simulator, a system dynamics model that assists in selecting policies that will allow China to achieve its emissions reduction goals. The model’s results find that China can peak its carbon emissions before its target year of 2030, and this is done most cost-effectively via a package of policies supporting a diverse set of technologies.
This paper argues that the financial “value engine”—the difference between a utility’s return on investment and its cost of capital—drives shareholder returns. Regulators should use this value engine to align utilities’ financial motivations with delivering value to customers and society.
This document represents key insights developed at the Restoring Blue Skies Air Quality Workshop held in Beijing on September 17-18, 2014 co-organized by the Paulson Institute, Energy Foundation, Energy Innovation and Chinese partners. Participants included 80 leaders from 42 Chinese and international organizations.
This report synthesizes data gathered during a literature review of studies that quantify the economic, environmental, and social impacts associated with urban development. It concludes that compact, walkable, and transit-oriented development creates sustainable, healthy, and economically vibrant cities. The elements of urban design necessary for sustainable development are characterized by The 8 Principles, which are originally defined in Planning Cities for People.
During his recent inaugural address in early 2015, California Governor Jerry Brown announced a set of clean energy and climate goals to be met by 2030. For the last several months, Energy Innovation has engaged in policy analysis to produce three papers that provide guidance on how to achieve these goals.
Energy Innovation’s new report on California climate policy argues the state should adopt an ambitious 2030 target of 40% below the 1990 level of greenhouse gas emissions, and describes a method for how to get there. This strong yet achievable goal would get California halfway to its 2050 target in one-third of the time and help the state maintain its clean energy leadership at a time of unprecedented global commitments to fight climate change.
This paper recommends policy initiatives that California can take in order to meet Gov. Brown’s renewable energy, energy efficiency, and transportation fuel use goals for 2030. Recommendations include expansion of the Renewable Portfolio Standard, a carbon standard to decarbonize the electricity supply, and a new energy efficiency performance incentive for utilities.
This policy brief highlights the top policies that will enable California to meet its renewable energy, energy efficiency, and transportation fuel use targets in 2030. Policy recommendations in the brief pertain to the state’s cap-and-trade program, electricity sector, transportation sector, and methane sources.
This paper, a submission for the Solar Electric Power Association’s (SEPA) 51st State Challenge, synthesizes current thinking on system optimization by returning to first principles of rate design and market structure. By starting from first principles, the recommendations can be widely applied across jurisdictions with different market structures, resources, and demographics, including but not limited to a hypothetical 51st State.
This report, written for the Major Economies Forum, describes the power sector transformation underway across the globe. The transformation will undoubtedly look different around the world, but this paper posits five potential pathways to a dramatically-improved power system. Policymakers can use these pathways to proactively guide the sector’s transformation. A 2-page report summary can be found here.
This report profiles three communities (Hammarby in Stockholm, Sweden; Vauban in Freiburg, Germany; and Liuyun Xiaoqu in Guangzhou, China) that encompass characteristics of smart urban form and transportation systems. It highlights the environmental, economic, and social benefits that these communities gain by following The 8 Principles of smart urban form.
This report compiles the research from a number of studies and organizes their findings on the quantitative impacts of good urban form and transportation systems in cities. This literature review finds evidence from the studies to be supportive of The 8 Principles for low-carbon urbanization.
Electric utilities have great potential to reinvent themselves in order to stay relevant throughout the power sector’s imminent transformation. A confluence of factors – new and cheap technologies, declining electricity demand, and increased action against climate change – are driving this change. To account for these factors, utilities must evolve from electron suppliers to system optimizers, and they ought to be rewarded based on performance rather than sales.
This study analyzes the level of greenhouse gas emissions that are attributable to electricity generated from natural gas versus coal. The study concludes that certain methane emissions, at certain leakage rates, could actually cause electricity generate from natural gas to contribute to higher GHG emissions in the near to mid-term, compared to electricity generated from coal.
This paper explores the science of measuring methane emissions and calls on the EPA to improve its approach to estimating methane emissions. New research concludes that methane emissions are significantly undercounted by the EPA Inventory of Greenhouse Gas Emissions and Sinks. Uncertainty remains about the sources of this “missing,” methane, but there are strong indications that at least some of it is coming from the natural gas system. Better data on methane emissions is needed to guide climate policy and more efficiently regulate the natural gas industry.
This report discusses the future for electric utility companies as ‘disruptive’ technologies, flattening energy load, and environmental regulations all potentially threaten their traditional business model. It proposes new business opportunities for utilities, giving special attention to performance-based ratemaking. Several case studies are included to demonstrate various elements of performance-based ratemaking, followed by best practice principles and recommendations. A version of this paper was published in the July 2014 issue of the Electricity Journal.
This paper recommends policies for California to maintain and enhance its status as a global leader in carbon-free prosperity. It offers policy recommendations in five areas: electricity sector policy, building sector policy, transportation sector policy, policy for fracking and methane emissions, and spurring policy action in other states and regions. The state is well on track to meeting its 2020 emission reduction goal, but additional policy innovation is needed if California is to achieve the longer term goal of reducing greenhouse emissions by 80 percent by 2050.
This working paper describes the role of state green banks in helping to deploy and commercialize clean energy technologies. Similar to a public-private partnership, state green banks use initial government funding to lever private investment in clean energy and energy efficiency. This paper discusses the purpose, goals, and structure of state green banks, highlighting Connecticut’s Clean Energy Finance and Investment Authority as a case study. It concludes with the strengths and weaknesses of state green banks as a tool to spur the clean energy economy.
Power markets and power market mechanisms could use an upgrade to take advantage of new resources and fairly compensate the resources already on the system for the services they provide. Power markets should increase energy efficiency, upgrade system operations to…
This op-ed piece discusses the successes and failures that Germany has encountered during its Energiewende, or energy transition. Despite the country’s many achievements in renewable energy policy and practices, energy customers remain concerned with the increase in variable energy sources creating an unreliable supply of electricity or raising energy bills. As Germany’s electric power system continues to evolve, policymakers will need to consider how existing programs, market structures, and utility business models will need to change in order to remain effective and relevant.
This paper provides an overview of America’s Power Plan (APP), a series of papers on how policymakers, market operators, and utilities can address changing market conditions head-on. The papers cover wholesale market design, utility business models, finance policy, transmission policy, distributed energy resources, distributed generation, and siting. Energy Innovation’s Director of Strategy, Sonia Aggarwal, directed research for APP’s development.
This paper discusses the potential role for Staircase Capabilities Markets as a pricing mechanism to tackle some of the major issues associated with load balancing as more variable sources are added to the grid. This involves long-term planning for investment certainty, as well as flexible, small volume requests for proposals to encourage capabilities experimentation. The paper includes a California case study, provides a list of systems that could effectively participate in the market mechanism, and discusses the conditions of transitioning toward a new energy paradigm.
This paper was adapted from Energy Innovation’s previous publication, The Extremes Become the Norm, to explain how small changes in average temperature lead to large changes in extreme weather. As global temperatures move upward, certain parts of the world will become drier, causing droughts and wildfires, while other parts will become wetter, causing hurricanes and flooding. Increasing occurrence of these natural disasters will have catastrophic economic, health, and social impacts in communities around the world.
Frack or Fiction offers recommendations to the California Department of Oil, Gas, and Geothermal Resources on its draft regulation released in December 2012. The report also includes an overview of technological, environmental, and policy issues. California’s Monterey shale formation is estimated to represent 64 percent of recoverable U.S. Shale Oil. Energy Innovation’s Director of Research, Chris Busch, concludes that the draft regulation needs significant improvements if resource development in this region is to be done responsibly.
This paper discusses why small changes in average temperature lead to large changes in extreme weather, describes the upward shift in what are considered “normal” temperatures over time, illustrates the changing odds of extreme events with a moving bell curve, and points out regions that will become drier or wetter.
This is one of several case studies published by the American Energy Innovation Council illustrating the various ways in which government support has been a critical enabler of energy technologies that are widely-used and important today. This paper focuses on the development of low-emissivity (highly insulated) windows, which now constitute the majority of all windows sold in the U.S.
This is one of several case studies published by the American Energy Innovation Council illustrating the various ways in which government support has been a critical enabler of energy technologies that are widely-used and important today. This paper focuses on the development of advanced (more efficient, lower-polluting) diesel internal combustion engines, commonly used in trucks.
As China’s urban population continues to expand, it becomes increasingly important that cities are built with sustainability in mind. This piece discusses best practices for these cities, including walkability, mixed-use development, and high-quality public transit. These urban planning components make cities more comfortable, as well as healthier, for its citizens.
This paper discusses the three stages of energy technology innovation — research, engineering, and commercialization — and recommends tools and practices that should be implemented at each stage to best stimulate energy technology innovation. Recommendations include “stage gating” research to shut down failures early (for research), granting industry access to costly government resources and facilities (for engineering), and ensuring long-term, large market signals to provide investment certainty and influence large-scale adoption (for commercialization).
Seventeen R&D Leaders at major corporations were interviewed to find out how they manage their R&D, what government policies are helpful to their R&D efforts, and what are the most important challenges preventing greater R&D success.
This article, published in the journal Dædalus, argues that humans have a “budget” of a trillion tons of carbon we can emit before the probability of adverse consequences grows significantly, half of which has been spent. They use results from modeling using the En-ROADS software tool to study how changes in energy supply and demand might affect emissions and, in turn, climate. Topics discussed and modeled through EN-ROADS include carbon emissions growth in developing countries, energy efficiency, renewable energy, CCS, and other new technology.
This whitepaper, written as part of America’s Power Plan, describes the changing role of electric utility companies as new technologies for energy efficiency and distributed generation pose threats to their traditional business models. Aging infrastructure, changing customer demands, and stricter environmental and climate regulations additionally incite the need for evolution of utility structures. This paper offers recommendations for several types of utility structures, but focuses mostly on vertically-integrated and regulated utilities. It outlines three future scenarios for utilities; minimum utility involvement, medium involvement as smart integrator; or orchestrator; or maximum role as energy services utility.
This paper, written for the Paulson Institute, describes the trend of China’s rapidly urbanizing population. It outlines the benefits of smart urbanization, including quality of life, community, access and mobility, prosperity, and reductions in pollution, noise, and global warming. It provides six ingredients for successful urbanization: permeable urban form, transit-centered transportation with walking and biking, effective building codes, municipal finance reform, better measures of urban sustainability, and a strengthened planning process.
Demand-response will continue to play an important role in modernizing the power system by allowing grid operators to control electricity demand. This paper describes two ways that demand-response can be used to optimize electricity flows, avoiding peak capacity issues and balancing unprecedented levels of variable generation.
This paper was written at the request of the government of Japan to describe best practices in renewable energy policy design, using numerous international case studies as examples. It evaluates Japan’s status with respect to these policies and makes recommendations, including: update Japan’s transmission system, reduce the power of utility monopolies, implement policies to support biomass and geothermal, and strengthen clean energy R&D.
China has already suffered through the world’s worst traffic jam, which was 60 miles long and lasted for 11 days, and its cities have developed a reputation for terrible traffic congestion. At the same time, China’s cities are usually crisscrossed by huge avenues and highways. How can such big streets become so easily clogged? This piece explains why big streets lead to bigger traffic jams, and how Bus Rapid Transit can be a solution to road congestion.
This report analyzes the macroeconomic impacts of the U.S.’s 2011 proposal to extend performance standards for cars and light trucks , with particular attention to the employment effects. The proposed standards would increase vehicle fuel economy to 54.5 miles per gallon and reduce emissions to 163 grams of CO2 per mile by 2025. The report concludes that these proposed standards will create new jobs, increase real wages, and boost GDP by 2030.
This report defines the benefit of upside hedge value: the extra avoided expenditures on gasoline and diesel fuel that accrue when their prices spike as a result of climate policies like AB 32 (California’s Global Warming Solutions Act). It develops two historically grounded price spike scenarios: a moderate spike of 25 percent and a large spike of 50 percent. After accounting for short-term price elasticity of demand effects, the upside hedge value is estimated to be between $2.4 billion and $5.2 billion (2007 dollars) for the moderate and large shock scenarios, respectively.
This paper recommends ten specific policies that, if well-designed, can effectively reduce carbon dioxide emissions while protecting economic growth. These policies include vehicle performance standards, fuel taxes, energy efficiency programs, building codes, smart urban design, support for R&D, and more. The report takes a global perspective and uses examples from a variety of countries.
This report emphasizes the need to take immediate action to lower emissions. It explains how concentrations increase when there are more carbon sources than sinks, and that the effects of higher concentrations are likely to be irreversible due to natural feedback loops that spin the system out of control. The report concludes that it will be easier and cheaper to reduce emissions that help achieve our carbon budget goals if we start today, rather than delaying climate action to future years or decades.
This report aims to guide Chinese decision makers on ways to incorporate sustainable design practices into cities. The recommendations are: (1) develop neighborhoods that promote walking, (2) prioritize bicycle networks, (3) create dense networks of streets and paths, (4) support high-quality transit, (5) zone for mixed-use neighborhoods, (6) match density to transit capacity, (7) create compact regions with short commutes, and (8) increase mobility by regulating parking and road use. These recommendations reinforce one another, and are intended to be implemented together.