Why keep rate design shackled to the ways of the past, especially at the dawn of a solar revolution?
Opportunity for advancement or exercise in futility?
With the U.N. Climate Change Conference in Copenhagen now over, the electric utility industry is under an ever-expanding microscope and is being confronted by a wide array of global energy concerns, a result of political and economic policies targeting climate change. While the Copenhagen Conference might not have been the success that some hoped, it has caused intensified scrutiny. Many of the concerns addressed at the conference have created the most significant impetus for change the industry ever has seen. The subsequent alignment of worries among many politicians, regulators, and customers has renewed concerns that ultimately should result in new legislation and regulations aimed at combating climate change.
An important concern that will need to be addressed by the industry as it tries to combat climate change is the incorporation of new sources of renewable energy ( e.g., wind and solar) into the electric grid. Integrating these new sources of energy will result in a variety of positive outcomes, including the reduction of carbon emissions, the curbing of reliance on foreign sources of energy, and the creation of new green sector jobs that have become a constant topic of discussion in the current economic and political climate.
Renewable sources of energy also pose significant challenges, because they operate in a very different manner from the more common forms of energy generation. Renewables tend to be more expensive, while their energy production is neither constant nor predictable. For these reasons, the electric utility industry has been slow to embrace renewables as the answer to current and future energy production needs. In order to allow renewable energy sources to evolve into a possible solution, new tools need to be developed to forecast and control their production capabilities as they become increasingly prolific, while new forms of energy capture and storage also need to be devised or further improved.
Fortunately, recent scientific and technological advancements to assist with this process currently are being analyzed, and several of them are being piloted. Examples of these recent advancements include: wind energy forecasting, power system visualization and transparency in grid operations, and advanced concepts of power system automation and control through the use of phasor measurement units (PMUs). Ultimately, integrating renewable sources of energy into the electric grid will be viewed from one of two conflicting viewpoints. Will this process be viewed as an impediment to progress, or as the next great opportunity for the electric industry?
As the climate-change debate continues to rage, and regardless of one’s position, there are certain incontrovertible facts:
• The cost of gasoline and other petroleum-related fuels will continue to rise as global demand increases, while at the same time the availability of low-cost reserves will decrease, making production even more expensive;
• Auto makers are attempting to reposition themselves as friends to the environment, with the introduction of electric and electric-hybrid vehicles, leading to increased electrification of transportation; and
• Electric load is continuing to grow