Measures of generator unit performance are uncertain.
Devrim Albuz, Hind Farag, and Mark Griffith
The news is full of stories about Calpine and the difficulty merchant generation players face from the uncertainty and volatility of power markets. Now is a good time to review key measures of performance and profitability under uncertain conditions.
How the World Bank Group removes generation risks in emerging markets.
Infrastructure investors have had their share of pain over the past few years, particularly in developing countries. Aside from worries about the safety and stability of the investment itself, investors also face a more expensive cost of capital. Political risk insurance cannot remove the uncertainties associated with infrastructure investments, but the combination of sound deal structure and clear and reasonable expectations by all parties can mitigate some of these risks.
With increasing unit costs, the financial prospects and credit outlook for many utilities will depend on their success in passing along such costs to consumers.
The utility sector still has excellent access to the capital and credit markets. Yet, it is never safe to assume utilities will continue to enjoy the same low costs of capital. This is particularly true for companies facing compressed margins, regulatory deferrals or disallowances, and rising debt leverage.
How to avoid the billions of dollars in costs that were disallowed during the last round of construction.
With nuclear energy again being viewed as part of the solution for the United States’ energy needs, a number of companies are starting the early permitting and licensing process. Meeting budget targets means the industry must address project-management issues and the risk of end-of-project disallowances for any company or regulator to be able to move forward with new construction.
Congress renews PURPA’s call for conservation and load management, but the world has changed since the 1970s.
Bruce W. Radford
The “N-word” in the title first appeared in this journal more than 20 years ago, courtesy of the celebrated environmentalist Amory Lovins and his widely quoted piece, “Saving Gigabucks with Negawatts” (Fortnightly, 1985). Scroll forward a few decades. With restructuring of wholesale electric markets at FERC, plus formation of regional transmission organizations and independent system operators, the game was changed.
Cooperation and coordination will help the United States avoid an energy-policy confrontation.
Michael T. Burr
China is seeking to acquire resources and infrastructure from all over the world, from the oil fields of Venezuela to new shipyards for building liquefied natural gas tankers in Shanghai. But the country’s acquisition pattern puts it on a collision course with the United States and the rest of the world.
This overview of ratemaking and rate-design principles should ease the myriad tasks awaiting new rate analysts and attorneys, while provoking nostalgia among industry veterans still manning the ratemaking stations.
Better designs are needed to realize the goal of lower-cost gas.
Ken Costello and James F. Wilson
A gas procurement incentive mechanism that provides strong incentives for a broad range of procurement-related costs and revenues, using a benchmark that is both exogenous and adaptive to external circumstances, can benefit consumers.
Nine companies, consortia, or joint ventures are planning approximately 12 new nuclear power plants in the United States. How do the business challenges they face differ from the challenges faced by companies using other fuel sources?
Could local generators be used either to regulate voltage or control the power factor on distribution systems in New York?
John Kueck and Darrell Massie
Reactive power is becoming a hot issue in many regions of the country. Regulators and grid operators are grappling with ways to account fairly for reactive power supplies, and to encourage such resources to come online where they are needed. These analyses, however, are largely ignoring a vast fleet of infrastructure already installed on the network. West Point military academy, for example, has four small synchronous generators that are used for combined heat and power or emergency power applications. If these generators also were used as synchronous condensers, they might supply additional revenue to pay for the distributed energy investment.
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