Adding up the benefits of infrastructure investments.
J.P. Pfeifenberger and D. Hou
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.
Shaping system transformation.
New technologies—and new expectations—require taking a fresh look at the institutions and practices that have provided reliable electricity for the past century. Collective action is needed to define the key attributes of a future grid and then to take the more difficult next step—adapting our processes and institutions to align with that future vision. A thoughtful approach will allow America to capture the potential value that’s offered by sweeping changes in technologies and policies.
Green energy mandates might overburden gas pipelines.
By Diane A. Rigos, Boris L. Shapiro and Richard L. Levitan
Market rules could evolve to compensate gas suppliers for pressurizing pipelines when needed on short notice. Enhanced ancillary services will require innovative strategies using line pack in interstate pipelines and stepped up communication among gas and electric market participants to preserve reliability objectives in gas and electric markets.
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.
Subsidies might not be the best solution for interconnecting renewables.
Supporters of renewable energy are seeking to socialize the cost of a new interstate highway system for transporting green power. But utilities and transmission owners will build or finance new transmission systems to serve economic demands. Policy makers shouldn’t pre-ordain the direction of industry progress.