Tap into our research: Clean Power
PURC is helping policymakers and infrastructure executives throughout the world stay on the cutting-edge of knowledge while the regulatory landscape continues to change. The December 2015 edition of the PURC Research Update is now available.
In the 2016 presidential campaign, the Clean Power Plan may be considered a proxy for the myriad issues associated with climate change. An issue for presidential candidates is whether they want to support measures to mitigate climate change and the response seems to be divided thus far along party lines. A second question is: even if they do, is an EPA rulemaking process the best way to do it? The latter question touches on the broader issue of federal-state jurisdictional issues. The paper explores Florida’s efforts to date to address the Clean Power Plan in the context of the upcoming presidential election.
Challenges in Quantifying Optimal CO2 Emissions Policy: The Case of Electricity Generation in Florida
Significant debate surrounds EPA policy to limit carbon dioxide emissions from existing power plants. Most of the debate surrounds the cost-effectiveness of these plans, but what about the efficiency? This paper demonstrates that the marginal cost curve of carbon abatement in Florida is not well-behaved, and how this leads to difficulty in the characterization of an ‘optimal’ level of abatement.
How can energy storage developments evolve with regulatory uncertainty present? Energy storage has the capacity to be a game-changer for our electric grid, providing better integration of renewable energy, enhanced reliability, and reduced use of carbon-intensive fuels. Energy storage faces a number of obstacles, however, including technological, financial, and regulatory uncertainty. This Article focuses on regulatory uncertainty. It explains that there are different types of regulatory uncertainty and that uncertainty surrounding storage can be managed in a way to avoid stifling technological development. This Article sets forth strategies for regulators and regulated entities to continue to function, even within this zone of regulatory uncertainty.
What do we learn from the comparison of the approaches used by the EU and the U.S.? A better grasp of the interaction of the three policy methods used to reduce CO2 emissions is necessary to fine-tune energy policy and ensure achievement of overarching goals, such as those adopted by the EU. For the U.S., which has not adopted national CO2 reduction goals, the EU situation demonstrates the importance of adopting clear policy objectives in concert with a uniform measurement methodology. Only with a policy framework that includes measurable outcomes and a clearly identified means of measuring progress toward those outcomes will the policy package be sufficiently robust to ensure effective implementation.
A petition for a constitutional amendment that is circulating in Florida would remove barriers to local solar electricity supply. If it appears on the ballot and is ultimately approved by voters, this amendment would bypass the established regulatory process for determining cost allocation, establishing and enforcing service standards, and intervening in consumer-utility disputes, in one segment of the electricity market. These and other issues triggered by the Solar Amendment may, if the amendment is adopted, open the door to litigation and succeeding initiatives to ‘tweak’ the language if unforeseen consequences emerge.
EU Energy Efficiency Regulation and Governance: Lessons for the US?
What can the US learn from the EU’s Energy Efficiency Policies? The chapter compares the approaches of the United States and the European Union toward energy regulation and governance. It explores the question of what the US can learn from the EU’s experiences in developing and implementing energy efficiency policies in the area of electricity generation and use. A larger question is whether an initiative dependent upon the combined efforts of separate jurisdictions to meet a collective goal can effectively address an issue as complex as energy efficiency. Localized interests may be less of a priority or conflict with broader federal interests. Conversely, national or international policies may thwart localized policies.
How can utility regulators and the industry find a new paradigm? This paper describes a process of change for today's dynamic and uncertain environment. The paper examines three juxtapositions. The first is to focus on next practices, not best practices. Best practice is about following in someone else's footsteps, whereas next practice is about going into areas where no one has gone before. The second is focusing on why rather than focus on what. Asking “What should we do next?” emphasizes practice whereas asking “Why have certain practices been successful?” searches for underlying needs and context. The third juxtaposition is between leading and leadership. A leader provides direction, which is proper when the right direction is known. In contrast leadership mobilizes people to tackle difficult and often ambiguous problems and circumstances.
With increasing concern over the environmental effects of burning fossil fuels, the call for a more sustainable resource base has never been louder. Both developed and developing nations depend on an assortment of primary energy sources to produce electricity, like coal, natural gas, biomass, oil and renewables. This study addresses the problem of transitioning to a renewable energy-based electricity generating infrastructure.
What are the effective roles for utility regulators to improve energy efficiency? Regulators should apply the basic tools of regulation – providing incentives and monitoring performance – but also engage effectively with other government agencies. Incentives should be provided for reducing line losses, improving load patterns and overall reliability, providing decision-relevant billing information to customers, providing energy audits, and implementing smart grids. Efficiency programs impact utility revenues and costs, so the regulator should design incentives that encourage efficiency. Because other agencies affect efficiency by setting standards for appliances and providing subsidies, the sector regulator should factor in the interdependencies among energy efficiency programs when determining the cost-effectiveness of utility-based programs.
States are reassessing renewable portfolio standard (RPS) policies, spurred by lower natural gas prices, declining prices for renewable technologies, and political pressure. However, natural gas prices likely will increase in the future, the business case for new coal and nuclear plants is hard to justify, and renewable energy is popular. RPS remains a viable tool for pursuing fuel diversity and reducing carbon emissions.
Evaluating the Energy Savings Effect of a Utility Demand-Side Management Program using a Difference-in-Difference Coarsened Exact Matching Approach
Do demand-side management programs save energy? This paper estimates the energy savings effect of a Demand-Side Management program, specifically Gainesville Regional Utility’s (GRU) high-efficiency central Air Conditioner (AC) rebate program. In this program GRU offers financial incentives to its customers to replace their old, low-efficiency AC units with high-efficiency models. The research finds substantial annual energy savings, with impacts on the summer-peak being the most significant. There was no statistically significant rebound effect.
It can be more cost effective to reduce the demand for electricity than to increase its supply. In response, legislators and regulators around the world have implemented policies to induce electric utilities to reduce electricity consumption by their customers. Few scholars have developed rigorous economic models that can be employed to inform the optimal design of policies to reduce electricity consumption. The purpose of this research is to present one such model and to discuss its policy implications, focusing on how to motivate a utility to deliver effort that enhances the performance of programs designed to reduce electricity consumption. This motivation problem is important because, in the absence of explicit financial rewards for reduced electricity consumption, utility effort that reduces consumption often will reduce utility profit. Consequently, the utility may be reluctant to work diligently to ensure program success.
Wind generation can reduce wholesale electricity market prices by displacing conventional generation, but how large is the effect in an electricity market dominated by hydroelectric generation? This research examines wholesale electricity prices in the Pacific Northwest region of the United States and finds that increased wind generation reduces wholesale market prices by a small, but statistically-significant, amount. While a hydro-rich system can integrate wind generation at a lower cost than a thermal-dominated region, the direct economic benefits to end-users from greater investment in wind power may be negligible.
Watch Ted Kury, PURC Director of Energy Studies, explain the implications of the US Clean Energy Plan for Florida.
For more information on our research or trainings, please contact us via email (purcecon at warrington.ufl.edu).