In a workshop for the Public Service Commission of Wisconsin, John Shenot and Camille Kadoch provided an introduction to performance-based regulation as a key tool for aligning utility, ratepayer and public interests.
In a webinar for the Washington Utilities and Transportation Commission, Camille Kadoch, Elaine Prause and Rick Weston provided an introduction to performance-based regulation as a key tool for aligning utility, ratepayer and public interests.
In a technical conference for the Michigan Public Service Commission, Elaine Prause discussed the role of performance-based regulation in reaching reliability and resilience goals.
In a presentation for the U.S. Climate Alliance, Mark LeBel explored the promise of performance-based regulation as an alternative to traditional cost-of-service regulation for utilities.
In a technical meeting for the Connecticut Public Utilities Regulatory Authority, David Littell explored the role of performance-based regulation in helping states achieve a robust and resilient energy system.
Mit fortschreitender Energiewende werden fluktuierende Erneuerbare Energien immer zentraler bei der Energieversorgung. Für ein kosteneffizientes Energiesystem müssen die bestehenden industriellen und größeren kommerziellen Verbraucher sowie deren anstehende Elektrifizierung der Wärme- und Produktionsprozesse (Sektorenkopplung) darauf reagieren. Strompreise signalisieren dabei die Knappheiten und Überschüsse der Erzeugung. Auch das Netz ist schon heute sehr unterschiedlich ausgelastet. Trotzdem gilt, dass auch Knappheiten, die nur über kurze Zeiten auftreten, maßgeblich über einen kostenintensiven Netzausbau beseitigt werden. Kosteneffizient wäre es, auch die neuen und bestehenden Verbrauchseinrichtungen im industriellen Bereich und zur Schnellladung von Elektromobilen (Verbraucher mit registrierender Leistungsmessung) für eine Netzoptimierung einzusetzen.
Hier gewinnt die Frage nach Anreizwirkungen, einschließlich möglicher Hemmnisse und Fehlanreize, die von Netzentgelten (neben anderen Umlagen und Abgaben) ausgehen, stark an Relevanz: Es geht nicht mehr allein um eine „gerechte“ Kostenallokation, sondern um die Frage, ob energiewenderelevante Entwicklungen durch ineffiziente Bemessung und Strukturen der Netzentgelte unangemessen behindert werden.
Dieses Projekt betrachtet, wie die heutigen Regelungen zu problematischen Wirkungen bei der Netzkostenallokation führen können. Geeignete Weiterentwicklungen können sich dabei jedoch nicht auf kleine, kurzfristig umsetzbare Anpassungen und Ausnahmen beschränken. Deshalb werden hier grundlegendere Optionen andisktutiert. Das Ergebnis der Ausarbeitung soll dabei einen Impuls geben und keine konkret und detailliert ausgearbeiteten Vorschläge unterbreiten. Es soll vielmehr einen grundsätzlichen Diskussionsprozess anstoßen, der in die konkrete Ausarbeitung von Details und Implementierungen in der nächsten Legislaturperiode münden soll.
In a presentation for the National Rural Electric Cooperative Association, David Littell discussed performance-based regulation as a valuable tool for electric cooperatives in today’s changing power sector.
This week European Commission Vice President Frans Timmermans revealed that any extension of carbon pricing to heating and transport would be accompanied by a “climate action social fund.” He states the purpose of this fund is to compensate for possible adverse effects, especially for the most vulnerable citizens.
Our new report Pricing is just the Icing assesses these impacts and carbon pricing’s role in the buildings sector. We propose ambitious regulatory reform and a socially focussed renovation fund — not unlike what Timmermans has proposed this week — supported by a gradual and measured introduction of carbon pricing, either at an EU or member state level.
Timmermans explains the necessity for this fund as a consequence of the introduction of carbon pricing, but it is needed and justified even if the Commission does not proceed with the pricing proposals. Europe has already set itself social objectives for the energy transition to be “just and inclusive” and for the Renovation Wave to alleviate energy poverty this decade.
Achieving these obligations will require significant new socially focussed climate measures. The introduction of carbon pricing would increase the need for such assistance and should accelerate the rate at which funding is dispersed.
The impact of the Fit for 55 Package will be felt by Europeans like no previous set of climate measures. The European Commission expects emissions from the residential buildings sector to fall by more than 60% by 2030 from 2015 levels as the Renovation Wave builds over the course of the decade.
To ensure that this transition delivers on the EU’s social goals and turns the tide on rising inequalities, there are opportunities across the entire Fit for 55 package to ensure that the benefits of the transition are available to low-income and vulnerable citizens.
In our report, we assess the role of carbon pricing in buildings decarbonisation. We examine the options open to the Commission, including extending the Emissions Trading System (ETS) or implementing a parallel ETS for the buildings sector. We conclude that neither of these options would be best for the sector.
We analyse how higher energy prices have a regressive impact in many different ways, including geographical impacts, income-based impacts and impacts based on a range of other factors, including efficiency of buildings, access to clean fuel alternatives and other horizontal inequalities.
To shield low-income and otherwise heavily burdened households from the impact of the carbon price on bills, some direct payments to support incomes or reduce energy bills will be required in the short term.
Efforts should be concentrated, however, on low-carbon investment. This permanently reduces heating bills, brings the full benefits of energy efficiency and decarbonisation, and reduces the need for ongoing income or energy bill support. These objectives require up-front investment, which should be a major priority for the new European fund.
This fund should contribute significant additional, dedicated funding for renovations targeted for specific household groups. Many European funds can be used for renovation but not many must be used for renovation.
Buildings therefore have to compete with other decarbonisation or recovery projects, which are often more centralised and rely on fewer dispersed stakeholders. Renovation finds it hard to compete.
Many European funds can be used for renovation but not many must be used for renovation.
The fund should frontload spending as one of the key policy measures to alleviate energy poverty this decade. Funding should ensure as many households as possible are helped to decarbonise in advance of any carbon pricing or mandatory renovations required by minimum energy performance standards.
The fund’s design should meet the following priorities:
The commitment from the Commission to create a social fund is very welcome. Its design will be crucial. If it is dedicated to building renovation and is sufficiently large, targeted and quickly dispersed, the fund can significantly contribute to both its climate and social objectives.
A version of this article originally appeared in Euractiv.
Photo courtesy of Metro Centric / Flickr.
In a seminar for the Financial Research Institute, Dr. Carl Linvill explored smart rate design fundamentals, including a focus on performance incentive mechanisms.
In a webinar hosted by the National Association of Regulatory Utility Commissioners, Megan Anderson provided an overview of opportunities for performance-based regulation in transportation electrification and discussed RAP’s report Metrics to Measure the Effectiveness of Electric Vehicle Grid Integration.
