Transactions
(February 2009)
Redefining PV Capacity
Effective metrics give solar its due credit.
Photovoltaic (PV) power generation is an intermittent, non-dispatchable resource generally considered as energy-only with no capacity credit. However, there is ample evidence that solar energy reliably is available at peak demand time when loads are driven by day-time commercial air conditioning, and can contribute effectively to increasing the capacity available on a regional grid.
Auction or Allocate
The great debate over emissions allowance distribution.
Various approaches to distributing emissions allowances spark a heated debate over costs and fairness, but the allocation methodology doesn’t determine whether a regulatory scheme will reduce emissions. Auctioning allowances and distributing them for free both offer advantages and challenges for a successful cap-and-trade system.
Transmission Incentive Overhaul
FERC’s ROE incentive adder policy sends the wrong signals.
FERC is offering incentive rates to entice transmission investment. But the authors identify serious flaws in emerging policy regarding return on equity (ROE) incentive adders. Determining whether and when ROE adders are appropriate requires a more deliberative approach.
Risk Management Forum: Desperately Seeking Liquidity
Troubled markets drive defensive tactics.
The credit crisis has split U.S. utility companies into the haves and have-nots. Companies that planned ahead are enjoying the benefits of liquidity, while the rest are struggling to manage their financial risks in a volatile market. Nevertheless, companies across the sector are cutting spending and deferring projects as they weather the storm.
Wooing the Western Wind
How a move to bring power markets to the Great Plains has uncovered a crisis in grid planning.
They call the United States the “Saudi Arabia of Wind.” That’s due in large part to the huge potential of the Great Plains. But there’s a hole in the metaphor. Wind power development in some parts of the prairie is falling short of expectations.
Clear Skies for Gas
Unconventional sources brighten the U.S. supply outlook.
The future of natural gas supplies in the United States looks promising due to rising projections of recoverable resources, including unconventional production. A strong supply outlook bodes well for using natural gas as a low-emission transportation fuel.
Obama vs. Reality
Even blue-sky goals fall short.
Obama has set high expectations for his administration. But as the president acknowledged in his inaugural address, fulfilling those expectations won’t be easy. For the U.S. power and gas industry, the specific questions are whether Obama really means what he says about energy policy; whether his policy priorities are sufficient to accomplish the goals he’s set; and whether his “Yes we can!” strategy can survive in the real world, with all its practical constraints and party politics, after the “change” buzz subsides.
Energy Strategy: Flat Bills, Peak Satisfaction?
Why a risk-hedging product for small customers isn’t the gamble you may think.
Most believe flat electric bills pose tremendous risk, but the reality is that an exciting pricing opportunity exists. The energy supplier can manage uncertainty by gradually building program participation as it learns to balance risk and returns, or through a risk adder. The experience of Internet and telecom service providers suggests that safe, profitable flat fees can be constructed, and that customers will buy them.
Trial and Error in Texas
A hard year puts deregulation to the test.
Deregulation is being tested by a series of crises, from a devastating hurricane to the Wall Street meltdown. Regulators and companies are applying the lessons learned to strengthen the Texas market’s framework.