This is a follow up to my post Just The Beginning Of The Awakening To Disruption From Alternative Energy. It turns out that last month Germany drastically reduced its forecast for grid expansion.
In my original post I talked about how a consultant told the NARUC conference “that cost alone will drive the power industry toward “non-transmission alternatives” (NTAs).” (NTAs include all forms of distributed generation plus energy efficiency.) Quite simply, energy efficiency, solar, combined heat and power (CHP), and load response will make additional new transmission unnecessary. Now that has occurred in Germany.
The Network Agency in Germany had projected an urgent need for 74 new power lines spanning 3,800 km. Now it thinks the urgent need is only for 51 lines of 2,800 km. Though not explicitly stated, it could be that the slowing in the development of offshore wind reduced the urgency of the lines necessary to carry the power from north to south.
One key result is that “two of the main cost drivers in the energy transition have been reduced considerably: offshore wind and grid expansion.” With the continued, electrifying growth of solar power in Germany, I expect urgent transmission need to further decline.
On October 25, 2012, the Texas Public Utilities Commission (PUC) decided to rely on market prices to provide adequate capacity instead of creating a capacity market to reward central station power plants, opening the front door for customer participation in the market through load response, energy efficiency, and solar.
On October 25, 2012 the Texas PUC decided to rely on market energy prices to provide adequate price signals to customers and producers with regard to the value of electricity in ERCOT. The Texas PUC voted to allow price caps to increase to $9000/MWh by 2015 from the current maximum of $4500/MWh. For reference, the average daily market price in ERCOT typically is $25-30/MWh and the average daily peak price typically is $40-50/MWh.
Texas faces a potential shortage of electric generating capacity, which could cause brownouts or rotating blackouts in two or three years. The Brattle Group presented three alternatives: 1) keep the current energy-only marketplace, 2) keep the current energy-only marketplace but add administrative programs to encourage demand response to help ensure adequate generating capacity, or 3) create a capacity market, similar to PJM, to pay central station power plants for existing and being able to generate power if needed.
The Brattle Group’s evaluation all but recommended door number 3; the Texas PUC chose Continue reading
Non-Transmission Alternatives (Distributed Generation, Energy Efficiency) Take Spotlight At NARUC Conference
A consultant from Synapse Energy Economics, Doug Hurley, tells the National Association of Regulatory Utility Commissioners (NARUC) “that cost alone will drive the power industry toward “non-transmission alternatives” (NTAs).” NTAs include all forms of distributed generation plus energy efficiency. The FERC Chairman and state commissioners recognize regulatory rules do not give economically correct signals, and instead favor the existing paradigm.
That’s getting pushback from traditional transmission suppliers who see themselves left providing the backup power for consumers who expect to pay little each month but be able to turn to the grid on the hottest summer days or during blizzards.
Speakers said major transmission providers are already asking state regulators to require users with larger on-site generation capacity to pay grid stand-by charges. They also worry large new investment in transmission lines may end up being stranded as more areas find ways to meet their electric needs with NTAs.