Capacity planning for the smart grid.
The one-day-in-10-years criterion for capacity planning is coming under scrutiny. Making the most of the smart grid and demand management requires a less conservative approach. Markets and prices rather than administrative rules will ensure resource adequacy in a more efficient way.
New England grapples with excess capacity and rock-bottom prices.
“Corrosive.” “Seriously flawed.” On the “brink of market failure.”That’s what critics say about New England’s forward capacity market (FCM), whereby ISO New England conducts auctions to solicit offers from project developers to make electric capacity available three years into the future to meet anticipated regional demand.
Has the one-day-in-10-years criterion outlived its usefulness?
The one-day-in-10-years criterion might have lost its usefulness in today’s energy markets. The criterion is highly conservative when used in calculating reserve margins for reliability. Can the industry continue justifying the high cost of overbuilding?
Has demand response hit an evolutionary dead end?
On March 18, the day after this issue went to press, FERC was scheduled at its decisional meeting to open a new formal inquiry on the role of demand response in regions that already have competitive wholesale power markets. In particular, how much money should grid operators pay to electric customers who promise not to buy wholesale power?
How merchant funding is remaking the rules for renewables.
Six weeks ago, FERC opened a notice of inquiry to invite industry comments on whether wind, solar, and other intermittent energy sources face unfair obstacles in wholesale power markets. Now assigned their own acronym—VERs, for “variable energy resources”—renewables make up a growing percentage of the nation’s energy supply portfolio. But as FERC notes, they present “unique challenges,” especially in terms of constraints on location and limits on the degree to which system operators can control or dispatch individual VER units. Thus, FERC suggests that certain common rules and practices, such as those for unit commitment, dispatch, and scheduling, might make it overly difficult to integrate VERs into the grid.
A trio of eager tech startups confronts an industry intent on preserving the status quo.
In light of all the excitement created by smart-grid regulatory initiatives and stimulus funding, three clever tech startups have come forward with proposals for novel grid projects. In California, Western Grid Development proposes to install energy storage devices ranging in size from 10 to 50 MW at various discrete and strategic locations in PG&E’s service territory where the California ISO has identified reliability problems. Second, a company called Primary Power proposes to deploy a total of four advanced, 500-MVAR static VAR compensators (SVC) at three separate locations within the PJM footprint. Third, in Clovis, N.M., Tres Amigas plans to allow power producers to move market-relevant quantities of electric power and energy between and among the nation’s three asynchronous transmission grids: ERCOT and the Eastern and Western Interconnections.
The changing architecture of demand response in America.
Pilot projects are demonstrating the potential of smart metering and smart rates to make the most of supply and demand resources. But as empirical studies show, not all pricing designs are equally suited to every region.
Proving market performance requires detailed analysis.
Now that fuel prices have fallen recently from the highs seen in 2008 and wholesale electricity prices also have decreased, it might be tempting to attribute the lower prices to the restructuring of the wholesale electricity markets. Unfortunately, it’s a little more complicated than that.
FERC fights for the green-grid superhighway—even if Congress won’t.
The Senate’s deadlock over carbon cap-and-trade legislation has not deterred FERC Chairman Jon Wellinghoff from an agenda bent on promoting renewable energy and fighting climate change. Last fall, even as Congress dithered, FERC launched a landmark initiative that likely will lead to sweeping new rules for expanding the nation’s electric transmission grid, grounded on Wellinghoff’s belief in wind, solar, and green power resources.
Economists take sides in the battle for DR’s soul.
Back when the U.S. economy and power consumption still were bubbling, PJM reported in August 2006 that customer curtailments during a week-long August heat wave had generated more than $650 million in market-wide energy savings—all at a mere $5 million cost, as measured in direct payments made to the demand response (DR) providers, set according to wholesale power prices prevailing at the time. Where else but the lottery can you get an instant payoff of 130-1?