Climate and Energy最新文献

The 28th meeting of the Conference of the Parties (COP28) to the United Nations Framework Convention on Climate Change (UNFCCC) was hosted by the United Arab Emirates. While there were many competing priorities on the COP28 agenda, climate finance was “front and center.”¹ Dr. Sultan Ahmed Al Jaber, President-Designate for COP28, in a pre-COP letter, stated the need to “radically scale up climate financing” by “delivering on old promises” and “setting the framework” for new finance.²

Over the past three decades, utility regulators have increasingly strayed from traditional methods of setting utility revenue requirements to improve performance, help achieve public policy goals, and reduce costs. Under the traditional regulatory compact, utilities are allowed to collect revenues from customers sufficient to cover the costs of providing services. This includes recovery of all operating costs, power purchase costs and other pass-throughs, and return of and on investment necessary to maintain safe and reliable service to all customers regardless of size, type, or demands they place on the system. And utility services are to be provided at a fair and reasonable cost, as determined by regulators.

Uninterrupted grid edge connectivity is essential for distribution utilities driving towards a future where efficient, secure, and reliable field area network (FAN) operation is not just preferable but required. Communications and network connectivity have been rapidly evolving over the last several years and will continue to do so—including in the areas of spectrum options, carrier solutions, device manufacturers, core manufacturers, and network management options. Utilities have a greater choice of options to deploy, while needing to remain prudent in their investments. One of the options gaining traction in the United States is the private virtual network operator (PVNO) model.

Broad consensus calls for more US transmission infrastructure to speed the entry of new renewable generation into the resource mix. Many types of possible transmission projects vie for a role in pursuing that goal, including the three selected for partial support with $1.3 billion in recent commitments from the U.S. Department of Energy (DOE).¹ These projects reflect the DOE’s stated goal of promoting “clean energy” in diverse forms—onshore wind and solar electricity in the West and Southwest regions of the United States and the entry of new offshore wind in New England. These projects are “bi-directional”—transmission that can handle new wind and solar generating sources moving electricity one way when available, with more traditional “dispatchable” moving the other way when not.

A theme I have struck multiple times in this column is the reality that energy policy designed to eliminate atmospheric carbon as quickly as possible must—to be genuinely sustainable through political cycles and reliability challenges—recognize that natural gas will be here and play an important role in our energy mix for a very long time to come. Even the Biden Administration, with its stated objective of phasing out all fossil fuels, has recognized this reality, through the projections of its own U.S. Energy Information Administration (EIA). In the 2023 Annual Energy Outlook prepared by EIA, one of its cases in assessing the future energy mix includes one in which non-hydro resources, primarily solar and wind, become low-cost enough to be competitive leaders in the marketplace. Figure 1 depicts EIA’s projection, which does see renewables surpassing natural gas in market share by the late 2040s but still leaves natural gas with a 25 percent share of domestic energy consumption, down only 8 percent from current levels. Of course, when exports of liquefied natural gas (LNG) are added to this, as the largest exporter of LNG in the world, the natural gas line is much flatter.

Welcome to the fourth edition of the annual Top Ten Resolutions for the utility industry. These ten resolutions illustrate a renewed vigor and determination entering the New Year to make progress toward accomplishing so many things. Now armed with unprecedented federal funding and a majority of public support, the call for modernizing our energy system action and subsequent acceleration of this action is louder than ever. While utility priorities continue to change as the industry and world transform to a clean energy economy, utilities continue to rise to the occasion, and utility leadership continues to seize opportunities with a continued mission to deliver safe, reliable, clean, and low-cost energy.

Ten billion dollars—the amount of money the U.S. Department of Energy (DOE) estimates could be saved through the deployment of virtual power plants (VPPs), simultaneously helping to meet the estimated 200 gigawatt (GW) of peak demand growth expected by 2030.¹ While there are variations within the industry on the construct of VPPs, one common definition of a VPP is “aggregations of [distributed energy resources] DERs that can balance electric loads and provide utility-scale and utility-grade services like a traditional power plant.”² DOE is actively supporting VPPs, as evidenced by the issuance of the September 2023 report Pathways to Commercial Liftoff: Virtual Power Plants, as well as the announcement that same month of a $300 billion commitment to Project Hestia, an effort to make DERs, and the accompanying consumer-facing software to enable a nationwide VPP infrastructure, more widely available to American homeowners.³ This backing, combined with recent legislative and regulatory actions, such as the Inflation Reduction Act (IRA) of 2022 and the Federal Energy Regulatory Commission (FERC) Order No. 2222, which established a framework for DER aggregations that meet minimum size requirements of 100 kilowatts (kW) to participate in organized wholesale markets, is likely to promote greater deployment and participation of DERs in the market and could result in a large influx of such resources in a relatively short time span.

Greenhouse gas (GHG) emissions are projected to continue increasing through 2040, resulting in at least a 1.5°C increase in global temperatures, as modeled by the Intergovernmental Panel on Climate Change (IPCC).¹ The near-term IPCC modeling scenarios include extreme and concurrent hazards, with unequal distribution of warming across geographies and impacts on industries, and socioeconomic communities and populations.² Globally, 41 percent of carbon dioxide (CO₂) emissions are attributed to the energy sector.³ The United States is responsible for 12.5 percent of the global emissions, with China as the second largest GHG emitter.⁴ In efforts to reduce emissions, an increasing number of governments and regulating bodies are employing a variety of policy mechanisms, creating carbon markets to incentivize companies to invest in innovative and efficient clean energy technologies. Among these policies is a cap-and-trade or a cap-and-invest (C&I) framework impacting the largest emitters. The C&I framework is intended to hold industries accountable while allowing individual companies to buy, sell, trade, or invest allowances for carbon emissions.

As society adapts to a changing climate and responds globally and locally to the undeniable and more frequent impacts of climate change, now more than ever government leaders are accelerating efforts to simultaneously mitigate these impacts and increase the speed of decarbonization. Summer 2023 witnessed more devastating and frequently occurring weather-related events, including more severe hurricanes and tropical cyclones forming more rapidly and providing humans within their path little time to prepare. Damaging winds, torrential rains, higher storm surge and flash floods, record numbers of wildfires burning out of control—impacting the public health of people thousands of miles away from the fires, and the hottest summer of atmospheric and ocean temperatures ever recorded across the world are now approaching a new normal.

Can we spend too much on transportation and occupational safety, pollution abatement and climate change mitigation? The answer for many, including climate activists, regulators, politicians, and policymakers, is “of course we can't.” How can one doubt that these activities are socially desirable, especially when they could help to avoid cataclysmic outcomes? For an economist, however, it is not so farfetched to think that we can spend too much. The simple Econ 101 explanation is that, at the margin, the additional benefits fall short of the additional costs.