some thoughts on our energy future(s) ~in pictures~ nw energy coalition nw clean & affordable...
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Some Thoughts on Our Energy Future(s) ~In Pictures~
NW Energy CoalitionNW Clean & Affordable Energy Conference
Comments of Ron BinzPublic Policy Consulting
November 8, 2013 Seattle, WA
Public Policy Consulting
www.rbinz.com
Pressures on the Utility Model
• New environmental regulations• Investment requirements• Flat load growth• Shifting fuel economics• Upward pressure on rates• Distributed energy resources• Falling cost of alternative resources
=
WECC (2032): Potential Bypass Threats from Distributed Generation are Large
• WECC-wide Behind-the-Meter DG: 19 GW of solar PV + 7 GW of CHP• Distributed PV based on “interconnection potential” (no back-flow through
feeders), with adjustments to reflect relative economics among states• CHP additions represent a fixed percentage (~40%) of technical potential in
each state
0%
5%
10%
15%
20%
25%
30%
AB AZ BC CA CO ID MT MX NV NM OR UT WA WY
CHP Solar PV Customer-Sited DG Additions in WECC High DSM Case(Percent of Peak Demand)
Source: E3 (2013).
NREL’s estimate of continued cost reductions for wind energy
Oregon
Colorado New Jersey GermanyArizonaWashington
Renewable Electricity Futures Study (REF)
Exploration of High-PenetrationRenewable Electricity Futures
Available at NREL.gov
Baseline Case
REF ITI Case
How does the assumption of an HREF affect the business model?
Much higher levels of variable generation at the bulk power scale
Greater penetration of distributed energy resources at the distribution scale
Greater need for flexibility in the grid components, operations, and architecture
Much higher levels of energy efficiency (sufficient to eliminate load growth)
(affects utility organization, operations)
(affects utility revenues, services)
(affects utility investment, operations)
(affects utility role, services)
• Thesis: Utilities must develop a set of new business models
• Thesis: Today’s regulation may not be up to the task– Rarely rewards utilities for desired behavior– Lack of incentives for
• firm efficiency• clean energy investment• energy efficiency• innovation
– Rate structures need revision– Focus on commodity sales– Balky, judicial process
• Authors– Ron Binz
– Richard Sedano
– Denise Furey
– Dan Mullen
Available at www.ceres.org
The Final Word
111(d)
