Wind

In 2009, unconventional shale gas emerged as the dominant driver in North American natural gas markets. Rapid increases in shale gas production and shale-driven upward revisions to the U.S. natural gas resource base have reversed the outlook for the U.S. natural gas supply. In contrast, the economic recession and growing uncertainties around the role of natural gas in power generation have clouded the outlook for natural gas demand. Natural gas has been called the “bridge fuel” for its potential to support the transition to a low carbon U.S. economy.

The power grid has been slow to embrace renewable energy sources. In order to allow renewable energy sources to evolve into a solution rather than a headache, new tools and processes will need to be developed to forecast and control renewable production capabilities.

Six weeks ago, FERC opened a notice of inquiry to invite industry comments on whether wind, solar, and other intermittent energy sources face unfair obstacles in wholesale power markets. Now assigned their own acronym—VERs, for “variable energy resources”—renewables make up a growing percentage of the nation’s energy supply portfolio. But as FERC notes, they present “unique challenges,” especially in terms of constraints on location and limits on the degree to which system operators can control or dispatch individual VER units. Thus, FERC suggests that certain common rules and practices, such as those for unit commitment, dispatch, and scheduling, might make it overly difficult to integrate VERs into the grid.

The operations and planning rules for integrating variable resources aren’t the same across the electric power industry in the United States at present. Opinions are somewhat divided about what these should be, as well as the assessments of potential benefits and costs. In order to support sustainable deployment of variable resources at value, it’s critical to identify major sources of potential problems and to proactively design and implement a systematic framework for managing their unique characteristics as reliably and efficiently as possible.

This year has marked a sea change in energy policy, from environmental compliance to transmission pricing. Fortnightly interviews top lawyers to better understand how regulatory developments are affecting the power and gas industries.

Dramatic changes are coming to the electric industry, sparked by a surge of renewable energy and related transmission. Growth in demand-side resources, conservation and smart technologies will add integration dilemmas to an already complex power system.

Lawyers get a bad rap in this country, and in some cases it’s well earned. However, during the month of October I enjoyed the distinct privilege of interviewing nearly a dozen of the industry’s most insightful, informed and hard-working people—all of them law-firm lawyers serving energy companies, regulatory agencies and customer groups.