Integration

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.

So far, states have taken the lead in carbon-control strategies. These state actions, however, could lead to constitutional conflicts—as recent court battles demonstrate. Only the U.S. Congress can regulate interstate trade, so states must step carefully in controlling carbon leakage.

Photovoltaic (PV) power generation is an intermittent, non-dispatchable resource generally considered as energy-only with no capacity credit. However, there is ample evidence that solar energy reliably is available at peak demand time when loads are driven by day-time commercial air conditioning, and can contribute effectively to increasing the capacity available on a regional grid.

They call the United States the “Saudi Arabia of Wind.” That’s due in large part to the huge potential of the Great Plains. But there’s a hole in the metaphor. Wind power development in some parts of the prairie is falling short of expectations.

Pumped-storage technology allows utilities to defer the time value of energy, but project developers have struggled to make their economics work. Increased demand for ancillary services and standby capacity might make pumped storage more viable.

Photovoltaic technologies are beginning to appear more attractive than concentrated solar thermal plants. PV’s competitiveness is improving from technical and operational advancements, as well as significant commitments made by such utilities as Southern California Edison. In the long run, distributed central PV plants likely will gain a strong market position.

Federal regulators have penalized wholesale energy market participants with fines ranging from $300 thousand to $300 million over the past two years. The magnitude of the penalties, along with uncertainty over how to effectively mitigate the risk of any civil action by regulators, has raised concern about how companies are approaching their regulatory obligations.

The purpose of utility-system automation, in a nutshell, is to bring utility service into the 21st century. These advancements will help improve customer service by allowing utilities to respond sooner to situations that cause outages—but only if workforce processes make use of the intelligence these new systems provide.

While both NERC and the NERC regional councils (known today as the Electric Reliability Organization) have standards and guidelines for resource adequacy and system reliability, much of the specificity as to how interruptible (e.g., demand-side) and intermittent resources (e.g., wind) are included is left up to the individual ISO/RTOs, states, provinces, etc. In fact, the various regions across North America each seem to have their own methodology for incorporating these resources into their resource adequacy and reserve-margin calculations. As the North American energy industry escalates its desire to reduce greenhouse-gas emissions through the expanded use of demand-side resources and intermittent renewables, the importance of this topic also will escalate.

Company leaders should expect to go through at least one company merger. If you’re in the energy industry, it’s time to begin pre-deal initiatives.