The Brattle Group

What Price, GHGs?

Calculating the implied value of CO2 abatement in green energy policies.

Renewable portfolio standards and other green energy rules put a price on environmental benefits. Calculating this price can help clarify the social value of GHG reductions.

RTO Tango

PJM and MISO ran from the altar once before. Now there’s talk of a shotgun wedding.

Utilities in the Midwest ISO want greater access to sell into PJM’s lucrative market. But that might require a virtual merger of the two RTOs — a move rejected seven years ago as too costly, and perhaps still impractical today.

Edison Under the Hood

Can utilities put EV batteries in the rate base?

Thomas Edison once hoped to make a fortune in the auto business—selling electric cars. Of course it never happened; he and Henry Ford tried and failed to bring a low-cost electric car to market. They scuttled the project after investing $1.5 million toward the effort—more than $32 million in today’s dollars. Edison’s nickel-iron batteries just couldn't match the performance of Ford’s petrol-powered bang-bang.

Transmission's True Value

Adding up the benefits of infrastructure investments.

Allocating the costs of new transmission investments requires accurately assessing the value of those new lines, and identifying the primary beneficiaries. But formulaic approaches rely too much on the most easily quantified cost savings, and reject benefits that are dispersed across service areas—or that might change over the course of time. Brattle Group analysts J.P. Pfeifenberger and D. Hou explain that comprehensive valuation produces a more accurate picture.

Technology for the Masses

The consumer-centric smart grid and its challenge for regulators.

Federal and state regulators play a critical role in the evolution of the smart grid. Lawmakers face a host of questions, from deciding who owns consumer data and how it can be used, to defining a new range of regulated and unregulated utility services and applications. How much regulation will be needed to manage the transformation to a smart grid? And how much regulation will be too much?

Energy Efficiency: 15 percent by 2020?

A new survey of energy industry experts reveals a surprising consensus on the size of the energy efficiency resource. Overall, energy efficiency is expected to lower electricity consumption by 5 to 15 percent, and natural gas consumption by 5 to 10 percent. These results debunk the notion that conservation is a fad. On the contrary, they herald a new beginning for energy efficiency.

Efficiency pessimists contend that energy efficiency (inclusive of demand response) is unlikely to make much of a dent on energy consumption and peak demand in the year 2020 since all the low-hanging fruit has been harvested. Ergo, the solution to meeting the nation’s future energy needs in a carbon-constrained future is to build more power plants (preferably those that don’t burn coal), transmission lines and distribution systems.

Gas Demand Response

As more natural gas is used for power generation, more volatility can be expected in gas markets. Demand response might provide a tool for managing that volatility, but is it technically feasible? And will gas customers accept it?

In general, demand response refers to the ability of consumers to respond to a supply shortage by curtailing demand, thereby improving economic efficiency. Since the California energy crisis, demand response has been widely used in electricity markets throughout the United States and Canada.1 Recent developments in the natural gas sector suggest that the time may have come to also introduce demand response in that sector.

Treading Water

With no guidance yet from FERC, Atlantic Wind is forced to wait.

Touted as the nation’s first-ever “offshore transmission highway,” the proposed Atlantic Wind Connection (AWC) high-voltage power line in theory could foster dozens of wind farms in shallow offshore costal waters up and down the mid-Atlantic seaboard — but only if federal regulators can get buy-in for new transmission planning rules that give precedence to large, macro projects aimed at boosting renewable energy. Otherwise, the grid project might never pass muster with the engineers charged with OK’ing new power lines, since the AWC is probably not needed to maintain reliability, and likely would not make electricity rates any cheaper for East Coast ratepayers. Should wind energy developers start with massive grid projects to attract clusters of wind turbines, or should the wind farms come first?

The Art of the Plausible

Prospects for clean energy legislation in 2011.

With budget battles heating up in Washington, Congress and the Obama administration are squaring off to debate energy policy legislation. While Democratic leadership favors a clean energy standard, Republican lawmakers are focused on blocking administration initiatives to regulate greenhouse gas emissions. A compromise approach might bring substantial changes to America’s national energy strategy.

DR Distortion

Are subsidies the best way to achieve smart grid goals?

FERC has proposed that wholesale energy markets should subsidize load reductions with full LMP (locational marginal price), without deducting the customers’ retail savings. Such a policy could distort the market, and other solutions might achieve the same objectives more efficiently.