Exploring the cost implications of increased renewable energy for the U.S. power system

Over the last decade, the fraction of annual U.S. electricity generation for renewable energy has doubled from 10 % to 20 %. This growth has been driven by several factors, including technology cost reductions and policy support. The share of renewable generation is projected to increase over time. Reference case scenarios from four different organizations show least-cost U.S. electricity buildouts with renewable energy generation fractions of 31–36 % by 2030 and 40–65 % by 2050. Using a capacity expansion modeling tool, we investigate how changing the amount of renewable energy from the least-cost solution impacts the cost of building and operating the electricity system. The relationship between system cost and renewable energy generation fraction is non-linear. Small deviations near the least-cost solution have minimal cost impacts (changing the renewable energy penetration by +/- 5% results in system cost changes of less than 1%), while similar deviations that are farther from the least-cost solution can result in large cost changes. Increased levels of RE lead to lower absolute emissions, and we evaluate the trade-offs between emissions savings and system costs for higher and lower levels of RE penetration.     

Reunification: The case for concerted regulatory reform in the U.S. electricity industry

America’s electricity system is in a state of regulatory disarray, and has been for two decades, since the move to restructure the industry that began in the 1990s, which initially faltered with the California crisis of 2000–2001, eventually resulted in a patchwork of state regulatory models, some of which adopted some form of modified restructuring, and others which explicitly resisted it. Many in the industry have attempted to put a positive spin on this patchwork of starkly different regulatory models, arguing that they represent different “laboratories” for exploring the benefits and limitations of each variant. This paper argues that the opposite is the case, and that the reluctance of the industry to make a frank assessment of the benefits and drawbacks of restructuring, and in particular to address the question of why the “flawed” regulatory model that it was intended to replace continues to survive and even thrive in much of the country, has produced a sort of stagnation, in which there is much talk of evolution in regulation and new business models, but little or no tangible progress. The fact that new trends and developments in the industry, such as declining electricity growth and the rise of distributed energy resources, will present serious challenges to all existing regulatory and business models in the electricity industry, makes it imperative that a fresh and unbiased look be taken at regulatory policy. But more than this, to avoid the stagnation that regulatory “agnosticism” has produced over the past two decades, the industry should set as its goal the search for a single state regulatory model that will be flexible enough to accommodate regional differences in generation sources and distributed generation penetration, and adaptable enough to effectively manage the changes which are arising from changing electricity usage patterns and new technological developments. The paper concludes with some suggestions on how to effectively conduct such a program.