Changing the electricity game

The U.S. power system will face many challenges in the next several decades. The arrival of plug-in hybrid vehicles, exponential growth in customer-controlled generation, growth of nondispatchable and intermittent renewable sources of energy, increasing demand for higher service reliability and power quality, microgrids---these are just some of the challenges that our system faces now and will continue to confront into the future. While the nature of these challenges is somewhat known, the extent of their impact is not fully understood. American Electric Power (AEP) views distributed energy storage as a key piece of its future grid. By strategically locating and controlling distributed energy storage systems (DESSs) on a large scale, AEP can potentially reduce adverse impacts on the grid by creating a controllable buffer between utility and nonutility-controlled assets (Figure 1).     

Green electricity policies in the United States: case study

While there has been interest in promoting the use of renewable energy in electricity production for a number of years in the United States, the market share of non-hydro renewable energy sources in electricity production has remained at about 2 percent over the past decade. The paper reviews the principal energy resources used for electricity production, considers the changing regulatory environment for the electricity industry, and describes government policies that have been used to promote green electricity in the United States, with an emphasis on measures adopted by state governments. Factors influencing the development of green power markets are also discussed, including underlying economic issues, public policy measures, the regulatory environment, external costs, and subsidies. Without significant increases in fossil fuel prices, much more stringent environmental regulations, or significant changes in electricity customer preferences, green electricity markets are likely to develop slowly in the United States.     

Cost-effectiveness of renewable electricity policies

We analyze policies to promote renewable sources of electricity. A portfolio standard (RPS) raises electricity prices and primarily reduces gas-fired generation. A knee of the cost curve exists between 15% and 20% goals for 2020 in our central case, and higher natural gas prices lower the cost of greater reliance on renewables. A renewable energy production tax credit lowers electricity price at the expense of taxpayers, which limits its effectiveness in reducing carbon emissions, and it is less cost-effective at increasing renewables than a portfolio standard. Neither policy is as cost-effective as a cap-and-trade policy for achieving carbon emission reductions.     

Renewable electricity policies in The Netherlands

Many analysts agree that the support system for renewable electricity (RE) in the Netherlands has been opaque, confusing and lacking long-term security, due to the numerous instruments and to the several changes in the details of the policies. However, most analysts fail to notice that these factors per se are hardly responsible for the uncertainty observed in the Dutch market. This paper surveys the policies introduced in the last decade or so and discusses their effectiveness in facilitating the diffusion of RE. Although the government brought about a remarkable increase in demand for RE, the creation of domestic supply has lagged behind. This relatively slack expansion can be ascribed to the uncertainty in the Dutch framework, caused by the lack of a clear relation between policies stimulating demand and supply for RE. This also hindered the development of national industry and delayed the debate on the removal of planning and administrative bottlenecks.     

Green electricity policies in the Netherlands: an analysis of policy decisions

Over the last decades, fundamental changes can be observed in both market conditions and the national policy framework for green electricity in the Netherlands. The Dutch Government has regularly intervened in markets, demonstrating fundamental shifts in policy and approach. This study aims to analyse the developments in renewable energy policy making in the Netherlands. It assesses changes in the choice of policy instruments and target groups, the role of stakeholders, and offers explanations behind policy successes and failures. Dutch green electricity policy over the last decade can be characterised roughly by three phases: in the early 1990s, the government negotiated voluntary agreements with the energy distribution sector on targets for green electricity sales, which were never met. In the second half of the 1990s, a regulatory energy tax was introduced, from which customers of green electricity were exempt. This led to a substantial increase in demand, which was largely met by green electricity imports, and did not lead to additional domestic renewable energy capacity. Finally, a change in policy has taken place recently (2003) shifting the focus from promotion of demand to the promotion of supply through a system of regulated feed-in tariffs. Despite the renewable energy policies, growth of the renewable energy market in the Netherlands has been small and targets have not been fully met. The Dutch government has not yet succeeded in substantially reducing market uncertainties and in building confidence among market parties, because the policies have not been stable and policy objectives have frequently been partly ambiguous. In addition, the influence of stakeholders in renewable energy policy making has been small which has the early acceptance and implementation of alternative policies.     

Design limitations in Australian renewable electricity policies

Renewable electricity is pivotal to the medium and long-term reduction of Australia’s greenhouse gas (GHG) emissions, if deep cuts in them are eventually implemented. This paper examines the effectiveness of the principal existing policies that could potentially promote the expansion of renewable electricity (RElec) in Australia: the expanded Renewable Energy Target (RET); the proposed emissions trading scheme (ETS); and the state and territory-based feed-in tariffs. We find the effectiveness of RET is severely eroded by the inclusion of solar and heat pump hot water systems; by the inclusion of ‘phantom’ tradable certificates; and by high electricity consumption growth. We also find that the ETS will not produce a high enough carbon price to assist most RElec technologies before 2020; and that most of the feed-in tariffs exclude large-scale RElec and will give little assistance to small-scale RElec because they are mostly net tariffs. Unless there is a major revision of its RElec policy mechanisms, Australia will fail to reach its renewable electricity target and in particular will fail to build up its solar generation capacity which could be a major source of future deep cuts in the country’s electricity generation emissions.     

Enhanced policies for the improvement of electricity efficiencies

Energy-efficiency improvement is considered as an important option to limit greenhouse gas emissions. In this paper, the possibilities to implement new policies to improve the efficiency of electricity end-use are explored.The following policy actions are considered:

• •introduction of a ‘1 W standard’ for standby power consumption of appliances,
• •incremental standards for large electric appliances,
• •design guidelines for small electric appliances,
• •a technology-forcing standard for lighting,
• •a motor-drive program,
• •a program directed at the reduction of electricity use during empty-office hours,
• •actual energy performance requirements for service-sector buildings.

The implementation of these programs will contribute substantially to reaching greenhouse gas emission targets in the European Union (total estimated effect to be 200–350 Mton CO₂ emission reduction in the year 2020).However, to reach these targets a very substantial effort is required, both in terms of policy ambition, force of the applied instruments, and implementation efforts. In the case of electric appliances, regulatory instruments may need wider application. And, in order to attain the substantial potential savings in motor-drive systems, an effort comparable to the effort to promote renewable electricity in the European Union may be both justified and necessary.     

Federal policies for renewable electricity: Impacts and interactions

Three types of policies that are prominent in the federal debate over addressing greenhouse gas emissions in the United States are a cap-and-trade program (CTP) on emissions, a renewable portfolio standard (RPS) for electricity production, and tax credits for renewable electricity producers. Each of these policies would have different consequences, and combinations of these policies could induce interactions yielding a whole that is not the sum of its parts. This paper utilizes the Haiku electricity market model to evaluate the economic and technology outcomes, climate benefits, and cost-effectiveness of three such policies and all possible combinations of the policies. A central finding is that the carbon dioxide (CO₂) emissions reductions from CTP can be significantly greater than those from the other policies, even for similar levels of renewable electricity production, since of the three policies, CTP is the only one that distinguishes electricity generated by coal and natural gas. It follows that CTP is the most cost-effective among these approaches at reducing CO₂ emissions. An alternative compliance payment mechanism in an RPS program could substantially affect renewables penetration, and the electricity price effects of the policies hinge partly on the regulatory structure of electricity markets, which varies across the country.     

Advances in solar thermal electricity technology

Various advanced solar thermal electricity technologies are reviewed with an emphasis on new technology and new market approaches.In single-axis tracking technology, the conventional parabolic trough collector is the mainstream established technology and is under continued development but is soon to face competition from two linear Fresnel reflector (LFR) technologies, the CLFR and Solarmundo. A Solarmundo prototype has been built in Belgium, and a CLFR prototype is awaiting presale of electricity as a commercial plant before it can be constructed in Queensland. In two-axis tracking technologies, dish/Stirling technologies are faced with high Stirling engine costs and emphasism may shift to solarised gas micro-turbines, which are adapted from the small stationary gas turbine market and will be available shortly at a price in the US$1 ppW range. ANU dish technology, in which steam is collected across the field and run through large steam turbines, has not been commercialised. Emphasis in solar thermal electricity applications in two-axis tracking systems seems to be shifting to tower technology. Two central receiver towers are planned for Spain, and one for Israel. Our own multi-tower solar array (MTSA) technology has gained Australian Research Council funding for an initial single tower prototype in Australia of approximately 150 kW(e) and will use combined microturbine and PV receivers. Non-tracking systems are described of two diverse types, Chimney and evacuated tubes. Solar chimney technology is being proposed for Australia based upon German technology. Air is heated underneath a large glass structure of about 5 km in diameter, and passes up a large chimney through a wind turbine near the base as it rises. A company Enviromission Ltd. has been listed in Australia to commercialise the concept. Evacuated tubes are growing rapidly for domestic hot water heating in Europe and organic rankine cycle engines such as the Freepower 6 kW are being considered for operation with thermal energy developed by evacuated tube and trough systems. These may replace some PV in medium sized applications as they offer potential for inexpensive pressurised water storage for 24 h operation, and backup by fuels instead of generators. In the medium term there is a clear trend to creation of smaller sized systems which can operate on a retail electricity cost offset basis near urban and industrial installations. In the longer term large low cost plants will be necessary for large scale electricity and fuels production. Retrofit central generation solar plants offer a cost effective transition market which allows increased production rates and gradual cost reduction for large solar thermal plant. In the paper the author describes current funding systems in Europe, Australia, and the USA, and makes suggestions for more effective programmes of support.     

Competition and environmental policies in an electricity sector

We study the impact of competition and environmental policy (feed-in tariff vs. the EU ETS) on investment, CO₂ emissions and welfare in an electricity sector. We consider different market structures (a planner who maximises social welfare vs. duopoly) and two types of consumers (those whose behaviour depends on the weather vs. those whose behaviour does not). The demand specification is innovative and takes incompressible consumption into account.Given the costs and demand functions, we find that competition can increase CO₂ emissions, as is highlighted by Mansur (2007). In duopoly, the EU ETS seems to be the only efficient policy for reducing CO₂ emissions but also to increase the share of production based on renewable energy sources. The retained feed-in tariff policy seems to be the most expensive policy in terms of “social welfare”. Even if this policy seems to increase “social welfare”, feed-in tariffs increase the CSPE, which is paid for by consumers in the form of higher electricity prices and only benefits new entrants. It is also less effective in terms of emission reduction.     

The Lebanese electricity system in the context of sustainable development

The Lebanese electricity system has been evaluated in terms of its sustainability. An integrated approach was adopted to assess the life-cycle technical, environmental, energy and economic attributes of the system. The findings show that the Lebanese electricity system is characterized by a weak performance in all analysed aspects related to the sustainability of energy systems. Specifically, the system lacks adequacy and security leading to a supply–demand deficit and poor diversity. It gives rise to significant environmental emissions (including green-house gases), and produces large economic inefficiencies. The costs and benefits of optimising the performance of the centralised electricity system are presented, indicating substantial net benefits (together with considerable benefits in reduced environmental impacts across the life-cycle assessment categories, including carbon emissions) from improving the transmission and distribution networks, upgrading existing conventional plants to their design standards, and shifting towards the use of natural gas. The expected levelised cost of various energy sources in Lebanon also indicates that renewable energy sources are competitive alternatives at the present time.     

Factors influencing the likelihood of regulatory changes in renewable electricity policies

The renewable electricity literature has expanded in recent years from the analysis of policies focused on Research and Development (R&D) and off-grid deployment to the discussion of policies introduced to facilitate the diffusion of renewable electricity in the mainstream market. This article contributes to the discussion of renewable electricity policies by analysing some of the factors influencing the occurrence of regulatory changes, i.e. the financial sustainability and economic effectiveness of the policies, the allocation of costs and benefits; the coherence of the policies; the size and variety of the coalitions supporting and opposing renewable electricity; and the “Brussels effect”. The importance of these factors is evaluated in the case of three major markets of renewable electricity: Germany, the Netherlands and Denmark.     

Conceptualizing the acceptance of wind and solar electricity

Drawing from research interviews and the academic literature, this article conceptualizes the conditions that promote investor confidence and the social acceptance of wind and solar sources of electricity. It explores the factors influencing the acceptance of commercial wind turbines in Denmark and India and residential solar panels in Germany and the United States. The article begins by justifying its selection of case studies and explaining the methodology behind its research interviews and field visits. It then summarizes some of the key findings in recent surveys of public attitudes and market acceptance concerning renewable energy, with a focus on why some investors and communities reject wind and solar systems whereas others rapidly approve and adopt them. The article proposes that acceptance has multiple dimensions – socio-political, community, and market – that must be met holistically in order for investors and users to embrace renewable energy. The article argues that acceptance hinges upon the prevalence of nine factors; the lack of such factors creates environments where they are rejected. The theory is tested against four case studies that explore the forces driving renewable energy in Denmark, Germany, India, and the United States.     

State renewable energy electricity policies: An empirical evaluation of effectiveness

Over the past decade, state governments have emerged as US energy policy leaders. Across the country, states are adopting policy instruments aimed at carbon mitigation and renewable energy deployment. One of the most prevalent and innovative policy instruments is a renewable portfolio standard (RPS), which seeks to increase the share of renewable energy electrification in the electricity market. This analysis evaluates the effectiveness of state energy programs with an empirical investigation of the linkage between state RPS policy implementation and the percentage of renewable energy electricity generation across states. We use a variant of a standard fixed effects model, referred to as a fixed effects vector decomposition, with state-level data from 1998 to 2006. Results indicate that RPS implementation is not a significant predictor of the percentage of renewable energy generation out of the total generation mix, yet for each additional year that a state has an RPS policy, they are found to increase the total amount of renewable energy generation. These findings reveal a potentially significant shortcoming of RPS policies. Political institutions, natural resource endowments, deregulation, gross state product per capita, electricity use per person, electricity price, and the presence of regional RPS policies are also found to be significantly related to renewable energy deployment.     

Assessment of solar electricity production in the United Arab Emirates

In this work the possible large-scale integration of photovoltaic (PV) systems and parabolic trough concentrated solar power (CSP) technologies in the United Arab Emirates (UAE) power system is investigated in technical, economic and environmental terms. The analysis takes into account the available solar potential for UAE and in particular for the Emirate of Sharjah. In order to identify the least-cost feasible option for each renewable energy source for power-generation (RES-E) technology, a parametric analysis is carried out by varying each RES-E candidate system capital cost. From the analysis it is evident that an alternative cost-effective technology to the installation of a 50 MWp PV system might be the utilisation of a 50 MWe parabolic trough CSP system with either a 14.5 h thermal storage system or a 24/7 operation. The advantages of the latter are the dispatchability and the increased electricity output due to the utilisation of a thermal storage system, which leads to higher amounts of annual CO₂ avoided emissions. However, the electricity selling prices are higher than the current UAE electricity tariffs; therefore, for the promotion of solar RES-E technologies in the UAE, relevant financial supporting mechanisms need to be developed such as feed-in tariffs or feed-in premiums.     

PV solar electricity industry: Market growth and perspective

The photovoltaic (PV) solar electricity market has shown an impressive 33% growth per year since 1997 until today with market support programs as the main driving force. The rationales for this development and the future projections towards a 100 billion € industry in the 2020s, by then only driven by serving cost-competitively customer needs are described.The PV market, likely to have reached about 600 MW in the year 2003, is discussed according to its four major segments: consumer applications, remote industrial electrification, developing countries, and grid-connected systems. While in the past, consumer products and remote industrial applications used to be the main cause for turnover in PV, in recent years the driving forces are more pronounced in the grid-connected systems and by installations in developing countries. Examples illustrating the clear advantage of systems using PV over conventional systems based, e.g., on diesel generators in the rural and remote electrification sector are discussed. For the promotion of rural electrification combined with the creation of local business and employment, suitable measures are proposed in the context of the PV product value chain.The competitiveness of grid-connected systems is addressed, where electricity generating costs for PV are projected to start to compete with conventional utility peak power quite early between 2010 and 2020 if time-dependent electricity tariffs different for bulk and peak power are assumed. The most effective current-pulling force for grid-connected systems is found to be the German Renewable Energy (EEG) Feed-in Law where the customers are focusing on yield, performance, and long-life availability.The future growth in the above-defined four market segments are discussed and the importance of industry political actions in order to stimulate the markets either in grid-connected systems by feed-in tariff programs as well as for off-grid rural developing country applications by long-term financing schemes are pointed out.A technology roadmap is presented with special emphasis on the fact that different customer needs are best served with best-adopted technologies and not vice versa. The need for the third generation PV technologies, implying that so called first (c-Si-wafer)- and second (thin-film)- generation PV technologies will be overcome in a short to medium time scale, is obsolete; in contrast, the excellent scientific ideas developed within ‘Third generation’ concepts—like utilization of hot electrons, quantum wells and nanostructures—are shown to be part of ‘New Technologies’ opening new product ideas and additional market segments. The rationale for decreasing cost by increasing productivity for all technologies as well as the interpretation of price learning curves is presented.The role of PV in the future global energy supply chain is lined out. Due to a fast growing market driven by increasing widespread acceptance of PV, a substantial PV business and creation of employment in coming decades is expected. This in turn can provide solutions for nowadays global issues, such as a global energy justice by providing environmentally benign power to billions of people, who otherwise will lack energy solutions severely.     

Analysis of CSP plants for the definition of energy policies: The influence on electricity cost of solar multiples,capacity factors and energy storage

The effect on the cost of electricity from concentrating solar power (CSP) plants of the solar multiple, the capacity factor and the storage capacity is studied. The interplay among these factors can be used to search for a minimal-cost objective that can serve as a technical criterion to guide in the design of economic incentives for CSP plants. The probability-density function of irradiation is used in conjunction with screening models to evaluate the performance characteristics and costs of concentrating solar power plants. Two technologies have been analyzed in this study: parabolic-trough and tower plants. The results provide information to define the optimal operational range as a function of the desired objective. Thus, it is possible to derive a technical criterion for the design of CSP plants which optimizes the solar electricity produced and its generation cost. The methodology is applied to Spain, and the analysis of the results shows that a solar energy production of 37 kWh/m²/year for tower plants and 66 kWh/m²/year for parabolic-trough ones define the approximate optimal working conditions for the mean DNI in Spain.