AEO2017 Models U.S. Long-Term Energy Projections

Posted on January 5, 2017 by Jessica Bell

The Energy Information Administration (EIA) released its Annual Energy Outlook 2017 (AEO2017) this morning.  In its rollout presentation, EIA explains some key takeaways from AEO2017’s modeling, including: the U.S. becomes a net energy exporter over the period modeled in most cases, U.S. crude oil production increases from recent lows, and natural gas production increases.  AEO2017 sees low natural gas prices and renewable tax credits as drivers of natural gas and renewables as the primary sources of new generation, even if the CPP is not implemented (although the CPP, if implemented, would contribute to the retirement of older, less efficient, fossil fuel-fired units).  AEO2017 also projects that residential and commercial consumption will remain relatively flat or decline slightly because of improved equipment and efficiency standards, despite growth.

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A Look at Costs, Benefits, and Impacts of Renewable Portfolio Standards (RPS)

Posted on January 5, 2017 by Jessica Bell

In December, DOE’s National Renewable Energy Laboratory and Lawrence Berkeley National Laboratory released A Prospective Analysis of the Costs, Benefits, and Impacts of U.S. Renewable Portfolio Standards. This study compares three scenarios: (1) a no RPS scenario (RPSs do not exist beyond 2014 and limited economic growth in renewable energy); (2) an existing RPS scenario (assumes RPS requirements continue to grow based on existing state policies as of July 2016); and (3) a high renewable energy scenario (assumes nearly all states adopt aggressive RPSs).  The analysis compares costs (including electric system costs and electricity prices), benefits (in terms of air quality, greenhouse gas emissions, and water use), and impacts (to renewable energy workforce requirements, economic development, and natural gas prices).

The analysis finds that benefits exceed costs, even in the highest cost and lowest benefit outcomes.  The study notes its limitations, though; for example, it considers a subset of potential benefits and impacts and has omitted land use and wildlife impacts.

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FERC Issues Report on Demand Response and Advanced Metering

Posted on January 3, 2017 by Jeff Bayne

FERC staff issued its final report of 2016, entitled Assessment of Demand Response and Advanced Metering.  The Energy Policy Act of 2005 requires FERC to prepare annual reports on demand response resources.  This is the eleventh such report.

Demand response policies allow energy consumers to be paid for curtailing their consumption during periods of high energy demand.  Advanced meters are meters that measure usage data in, at minimum, hourly intervals and that have built-in two-way communication capable of recording and transmitting data instantaneously.

The report explains that demand response can occur at either the wholesale or retail level.  At the retail level, the annual potential peak reduction in 2014 (the most recent year with available data) was 31,191 MW, a 15.1% increase over the previous year.  The potential peak reduction from wholesale demand response programs in 2015 (the most recent year for this data) was 31,754 MW, a 6.6% increase from the prior year.  FERC also notes that the prevalence of advanced meters continues to grow and that, as of 2014, just over 40% of all meters in the U.S. are advanced meters.

In addition to breaking down the data on demand response and advanced metering, the report highlights recent policy and legal activity on these issues.  The biggest news in 2016 was the Supreme Court’s decision in FERC v. EPSA, which upheld FERC’s demand response regulation set forth in Order No. 745.  FERC subsequently issued a series of orders related to the participation of demand response in organized wholesale electric markets, the impacts of which are not yet reflected in the data on demand response.  The report also describes other recent federal actions, such as the Energy Efficiency Improvement Act of 2015, which allows certain grid-enabled water heaters to participate in demand response programs.  The report also highlights various states’ activities in this field.

Finally, the report concludes with an overview of the barriers demand response still faces.  These include a lack of market opportunities beyond acting as emergency resources or directly participating in retail and wholesale markets as well as the lack of coordination among policies at the federal and state levels.

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As New Year and Administration Change Looms, What Role Will States and Local Governments Play in Securing our Energy Future?

Posted on December 29, 2016 by Anjali Patel

This has been a busy and evolving year in the energy and environmental sector, including continued efforts on both a federal and state level to modernize the grid, the entry into force of a global agreement to reduce carbon emissions, major Supreme Court decisions regarding the federal/state jurisdictional divide, and ongoing litigation over national environmental rules that affect the power sector.  Soon after the start of the New Year, a new administration will begin—an administration that has announced energy and carbon policies markedly different from the status quo.  The Clean Power Plan is now unlikely to be implemented at the federal level and the fate of America’s involvement in the Paris Agreement is uncertain.  Because a great deal of energy policy is made at the state and local levels, industry watchers expect state and local government-level policies and developments to drive the course of our nation’s energy future.

We close out the year with two recent resources that address this issue:

  • Growth, Carbon, and Trump: State Progress and Drift on Economic Growth and Emissions ‘Decoupling’ is a Brookings Institute report that analyzes state-level progress in decoupling economic growth from carbon emissions. Based on a review of data between 2000 and 2014 on gross domestic product (GDP) growth and energy-related carbon dioxide emissions for the 50 states and Washington D.C., the report finds that more than 30 states have followed the national trend in delinking their economic growth and carbon emissions (in other words, they have decreased their carbon emissions while increasing economic growth).  The report attributes its findings to a variety of factors including state policies, changing generation resource mixes on both state and regional levels, reliance on nuclear energy, fuel shifts from coal to natural gas, and changes in state industrial structures.  The report concludes that “the trends depicted … suggest that while federal policy reversals could be traumatic, progress on decarbonizing the nation’s economy will likely continue … driven by technology advances, market dynamics, and state policy,” but that “[p]olicy choices at the state level are going to matter even more than in the past.”
  • The Advanced Energy Economy and the Center for the New Energy Economy’s Advanced Energy Legislation Tracker is a national database of state-level advanced energy legislation that has been introduced since 2013. The tracker covers all 50 states and Washington D.C. in the following ten policy categories:  Electricity Generation, Energy Efficiency, Financing, Regulatory, Natural Gas, Emissions, Transportation, Infrastructure, Economic Development, and Other Energy.  Users may search through current and past legislative actions, access bill sponsor information, and review policy trend analyses.

Best wishes to all our readers for a very Happy New Year.

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Michigan Passes Sweeping Reforms to Statewide Energy Policy

Posted on December 27, 2016 by Amber Martin

On Wednesday, December 21, 2016, Michigan Governor Rick Snyder signed into law two bills to implement sweeping reforms to Michigan’s energy policy.  Senate Bill Nos. 437 and 438, now Public Act Nos. 341 and 342, respectively, overhaul Michigan electric utilities’ resource planning obligations, revise the state’s retail electric choice program, and increase the amount of renewable electricity utilities must purchase to serve their customers.

The second of the new laws, SB 438, revises Michigan’s Renewable Portfolio Standard (RPS) to require electric providers obtain at least 12.5% of their electric supply from qualified renewable resources by 2019, ramping up to a target of 15% by 2021.  Previously, Michigan’s RPS required utilities to serve only 10% of their load with renewable resources.  The bill also expands the list of qualified renewable resources to include geothermal and pump storage.  Other reforms include the elimination of a restriction limiting utilities from procuring no more than 50% of their RPS obligation from their own generation, and new resource adequacy requirements for retail electric suppliers.

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