America’s Power Plan was created as a platform for innovative thinking about how to manage the transformation happening in the electric power sector today. We brought together America’s clean energy thought leaders to assemble information on a package of policies, markets, and regulations to maximize the grid’s affordability, reliability/resilience, and environmental performance. America’s Power Plan work now continues through Energy Innovation.
Electricity policy is at a crossroads—a conversation about feed-in tariffs or fixed charges is inextricably linked to a full-blown discussion about rate design, wholesale power markets, grid management, and utility business models. Without a holistic approach to power sector transformation, policymakers may find it difficult to tackle today’s challenges.
Energy Innovation curates expert content from the field, with the aim of integrating previously-siloed work into a package of solutions for regulators, policymakers, market operators, utilities, independent energy service providers, and other power sector professionals. The foundational series of eight papers was originally published as a special issue of the Electricity Journal.
Series: Overview: Rethinking Policy to Deliver a Clean Energy Future, by Hal Harvey and Sonia Aggarwal – Energy Innovation (October 2013)
The electricity system in America, and in many other nations, is in the early days of a radical makeover that will drastically reduce greenhouse gas emissions, increase system flexibility, incorporate new technologies, and shake existing utility business models. But a clear policy signal is required to drive efficiency and then switch to ever-greater proportions of clean power. Change will happen on a regional basis, and innovative partnerships must be forged between previously-siloed decision-makers. Depending on each region’s history and preference, well-designed markets or performance-based regulation can be used to accomplish power system goals of low costs, high reliability, and environmental performance. This overview paper provides top policy recommendations to make this transition happen swiftly, equitably, and cost-effectively.
Aligning Power Markets to Deliver Value, by Mike Hogan – Regulatory Assistance Project (October 2013)
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 enable short-term flexibility, and upgrade investment incentives to enable long-term flexibility. This transition requires fewer and larger balancing areas, enhanced weather forecasting, increased frequency of dispatch decisions, and support for customer-sited technologies and demand-side resources.
New Utility Business Models: Utility and Regulatory Models for the Modern Era, by Ron Lehr– Western Grid Group; former Colorado Public Utilities Commissioner
“Utility and Regulatory Models for the Modern Era” examines the evolving relationship between utilities and public utility commissions (PUCs).This paper offers recommendations for several types of utilities, but focuses mostly on vertically-integrated and regulated utilities. It outlines three future scenarios for utilities: minimum utility involvement, medium involvement as a “smart integrator” or “orchestrator,” or maximum role as an “energy services utility.”
Finance Policy: Removing Investment Barriers and Management Risk, by Todd Foley – ACORE, Uday Varadarajan – Climate Policy Initiative, and Richard Caperton – American Progress
America’s power system – from transmission lines, local distribution grids, transformers and controls — is getting old, and some parts are becoming obsolete as new technologies emerge. This paper discusses investment opportunities to support upgrades to America’s aging grid system. Optimizing the grid to accommodate increasing shares of renewables as well as demand-side resources is expected to require billions of dollars of investment. Financing these upgrades to the grid system requires policy, regulation, and market structures that eliminate barriers to cost-effective financing by enabling long-term debt and equity financing. Smart finance policy will also enable investors to realize the full value of the new assets they deploy, such as reduced emissions or increased reliability.
Distributed Energy Resources: Policy Implications of Decentralization, by James Newcomb, Virginia Lacy, Lena Hansen, and Mathias Bell– Rocky Mountain Institute
Distributed energy resources can help deliver an efficient power system that is cleaner, more affordable, and more reliable. But these disruptive technologies are encountering a regulatory system designed for centralized power plants, monopoly utilities, and passive consumers. To incorporate distributed energy resources, policymakers must first quantify the full range of costs and benefits, analyze tradeoffs, and incorporate distributed energy and services into resource planning. New market mechanisms and business models are needed for both utilities and new companies in order to drive innovation while preserving reliability. This paper lays out recommendations for taking advantage of distributed resources.
Distributed Generation Policy: Encouraging Generation on Both Sides of the Meter, by Joseph Wiedman– Interstate Renewable Energy Council, Inc., and Tom Beach– Crossborder Energy
Consumers are demanding increased control over their own energy production, especially through distributed generation. This paper provides recommendations for policymakers aiming to maximize the benefits of distributed generation. It details several policies that can support distributed generation.
Transmission Policy: Planning for and Investing in Wires, by John W. Jimison – Energy Future Coalition and Bill White – David Gardiner and Associates
America’s aging grid infrastructure is in need of a substantial overhaul as new energy sources become available. This paper suggests five ways to reduce the institutional and political barriers to building new grid infrastructure: 1) assess and communicate the benefits of transmission expansion; 2) prioritize inter-regional lines that link balancing areas; 3) harmonize grid operations and increase market competition; 4) reduce timeline for planning, building, and siting transmission; and 5) optimize transmission lines once they are operational.
Siting Policy: Finding a Home for Renewable Energy and Transmission, by Carl Zichella – Natural Resources Defense Council and Johnathan Hladik – Center for Rural Affairs
This paper focuses on the reforms needed to locate, coordinate, and expedite any new generation or transmission that the grid system requires. New approaches will require engaging stakeholders early, accelerating innovative policy and business models, coordinating among regulatory bodies, employing smart strategies to avoid the risk of environmental and cultural resource conflicts, and improving grid planning and operations to take better advantage of existing infrastructure to reduce costs of integrating more renewable energy.