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Power System Blueprint

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Accomplishing climate neutrality by 2050 requires a zero-emissions power sector by the mid-2030s. Securing a decarbonized power system early will unlock pathways for the whole economy. One of the biggest challenges to accomplishing this ambitious goal is time—we have a need for speed if we want to meet decarbonization goals by 2035.  

This is why RAP has created the Power System Blueprint, an interactive website that allows visitors to view different options for decarbonizing Europe’s power system. The Blueprint lays out how to design the regulatory context to achieve a clean, reliable, equitable and affordable European power system by 2035. RAP pulled together the latest insights for supporting regulators, NGO’s, governments and anyone interested in the decarbonization pursuit. 

The Blueprint is designed as a schematic of regulatory solutions linked to six important central principles. In the suite of regulatory solutions (also known as factsheets),you will find comprehensive information, the most important regulatory steps and further reading. 

The decarbonization of the power sector can be done by 2035 but will require a rapid and systemic rethink of the existing European power system regulatory landscape. Within the Power System Blueprint website, you’ll find solutions to some of the some of the largest tasks we face working within this tight timeframe.   

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Securing Benefits from Transportation Electrification

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​In a presentation for the New Mexico Public Regulation Commission’s Transportation Electrification Summit, David Farnsworth discussed the value of electrification as a flexible grid resource as well as the benefits from data tracking and use of advisory services.

Electricity Pricing: Drivers, Practices and Pitfalls

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At the Financial Research Institute’s Advanced Electricity Seminar on Utility Rates and Pricing for the Future, Carl Linvill explored smart rate design fundamentals and exposed some common policy pitfalls.

Surf’s Up: Catching the IIJA Wave

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I’m learning how to surf. For my birthday, my kids got together and bought me a surfboard. One day last summer I spent about three hours in the waves off of Popham Beach in Maine trying to figure things out. After about 60 attempts — no kidding — trying to catch a wave, I finally caught one. But I had help. I got tips from my kids, and from other surfers about things, like when to paddle hard and where to place myself on the board. When I finally caught that wave, all that paddling and the soreness in my neck and shoulders faded away. I was lifted and carried forward at easily three times the speed while the others alongside me and I were effortlessly propelled forward toward the shore by the energy of that wave.

I was recently reminded of my first day surfing as I read an order from the North Carolina Utility Commission (NCUC) in which it recognized that it too could use a little help better understanding the implications of the wave of federal funding — $1.2 trillion over eight years) — that is about to reach the states.

The Infrastructure Investment and Jobs Act of 2021 (IIJA) makes available billions of dollars for investment in utility infrastructure, including support for electric vehicle charging, smart distribution grid improvements, energy storage, and water system resilience and security. Referring to the IIJA, the NCUC opened its order with a “preliminary conclusion”:

It is in the public interest for the public utilities of this State to fully and carefully consider taking advantage of these available federal grants and loans, in order to promote adequate, reliable, and economical utility service to the citizens and residents of the State.

The order poses basic questions like:

  • Which federal programs could assist utilities in meeting their obligations?
  • What actions does the NCUC need to take to facilitate access to the funds?
  • What other organizations will utilities need to coordinate with?
  • What actions are other state agencies taking or considering?

More than a dozen utilities and others provided comments to the NCUC in this docket. The order not only brought together these parties, encouraging their insights and testing their ideas, but it also created a larger public conversation about the best ways to spend federal dollars for utilities in North Carolina.  It is the Commission’s role to ensure that the power sector develops in a manner that promotes the public good, and the NCUC recognizes that responses to the questions posed in the three-page order will enhance its expertise to best promote that public good.

Other states should consider taking a page from the NCUC’s playbook. It will create the opportunity to be more informed and better positioned to make decisions you very likely will need to make. Why wait until you are constrained by limitations associated with having to review a filing in a contested case? After all, who would be better situated to render a decision: a commission that has reviewed diverse comments and participated in discussions regarding the best ways to use federal dollars for the benefit of its state prior to having to review an actual proposal, or a commission that hasn’t?

Riding a wave requires help. Adopting the North Carolina approach will better position your utility commission to ride the oncoming wave of federal funding for the benefit of your utility sector and state economy.

Owning the future: A framework of regulations for decarbonising owner-occupied homes in Scotland

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Scotland’s recent Heat in Buildings Strategy sets out a plan to achieve the ambitious target for all Scottish buildings to be decarbonised by 2045. In practice this means replacing the heating systems of nearly 90% of Scotland’s 2.5 million homes that are currently heated with fossil fuels. As part of its regulatory framework, the Strategy states that all homes should achieve a minimum energy performance, defined as Energy Performance Certificate (EPC) C, by 2033. And all fossil fuel boilers will be phased out beginning in 2025. In short, there’s a lot to do over the next 20 years.

In Owning the future: A framework of regulations for decarbonising owner-occupied homes in Scotland, authors Dr. Catrin Maby and Louise Sunderland take a deep dive into the Strategy, focusing specifically on the owner-occupied building stock. The proposals in this report aim to identify and fill gaps in the framework of regulations, as well as ensure that implementation is well timed and staged so that fabric improvements are completed before heating systems are changed. The proposals also take into account different building types and the need to decarbonise higher carbon fuels first. Regulations alone, however, do not guarantee successful renovations, so the report outlines essential funding, finance, practical support and safeguards for affordability that must come alongside.

The authors put forth a number of recommendations on how to best strengthen the Strategy. Although specifically designed for Scotland, these recommendations may be applicable to any government designing an efficient, effective and fair regulatory framework:

  • Remove uncertainty on the decarbonisation options for buildings to ensure all actions are no regrets
  • Enable effective standards through changes to EPCs and the Standard Assessment Procedure (SAP)
  • Introduce a fabric energy efficiency standard to enable efficient, flexible heating
  • Phase out fossil fuels for heating through early incentives, and regulatory triggers and backstops
  • Enable alternative compliance routes for more complex, multi-occupancy buildings
  • Utilise existing compliance structures and resource local authorities to enable and enforce

You can find the report’s executive summary here.

Price shock absorber: Temporary electricity price relief during times of gas market crisis

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European policymakers are weighing possible responses to the extraordinary surge in energy prices and the consequences for citizens and industry. The European Commission expects to issue additional guidance in May, following analysis due in April from the Agency for the Cooperation of Energy Regulators. Targeted relief to vulnerable consumers should be undertaken in any case. Whilst RAP would urge caution in considering possible broader interventions in the electricity markets, if such a course of action is under serious consideration, we offer this proposal of a ‘price shock absorber’ for reflection as a measure best fit for purpose, designed to acknowledge and address the essential aspects of the current crisis:

  • This is a gas market crisis — it is an extraordinary event that is adversely affecting all sectors of Europe’s economy. The priority for the electricity sector must be measures that allow the electricity market to ride through this shock to the system, and similar future shocks, preserving its functionality whilst avoiding undue harm to consumers.
  • The midst of a crisis is the wrong time to take decisions with long-term implications that will be difficult to walk back once the crisis has passed. Our proposal acknowledges that the fundamental design of the electricity market is sound; whilst improvements are certainly needed, they have no direct bearing on the causes of or remedies for this crisis.
  • This crisis has revealed in stark terms the true cost of dependence on a volatile fossil gas market, including the risks inherent in the prominent position Russia will continue to occupy in global supply.
  • Consumers and industry have the power to contribute to the response to these risks, by procuring the energy services they need more efficiently and flexibly.

When responding to the crisis, policymakers should preserve and even intensify the electricity market’s role in mobilising and empowering consumers rather than concealing the true cost of ‘business as usual.’ The value of the only durable response — an accelerated transition away from fossil fuels — must remain visible to consumers in an equitable fashion.

The authors outline this price shock absorber mechanism as an additional market feature to bring consumers some measure of relief whilst preserving the market’s essential functions. These include valuing energy efficiency, rewarding beneficial demand and resource flexibility and ensuring a ‘normal’ level of expected inframarginal rent to incentivise and compensate investors in the energy transition for the value of their investments. If a decision is taken to intervene broadly in the electricity market, we suggest this approach offers a significant measure of relief whilst doing the least harm.

 

Grid Operations and Why They Matter for Air Quality — Part 1

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In a training for the Mid-Atlantic Regional Air Management Association (MARAMA), Nancy Seidman discussed regional transmission and opportunities for collaboration among air quality regulators, state energy offices and utility commissions.

Foundations of Retail Electricity Rates

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​In a presentation to an Energy Systems Integration Group task force, Mark LeBel explored utility pricing principles and rate-making best practices for today’s power sector.