Avoiding Unnecessary and Problematic Reforms
Many states are taking action on climate change by paying zero- and low-emitting electricity generators for avoiding the emissions that fossil-fuel-fired resources would otherwise emit. These “externality payments” help level the playing field between emitting and non-emitting generators. Critics of these policies argue that these payments might negatively affect the efficiency of wholesale electricity markets by reducing capacity prices, which heavily affect how generators enter and exit the market. Our report shows why the premises underlying recent reforms, which seek to shield capacity markets from the potential price impact of pollution externality payments, are flawed.
Implications for Greenhouse Gas Emissions
Many policymakers assume that increasing deployment of energy storage will automatically reduce greenhouse gas emissions, in part by helping to integrate renewable energy resources with intermittent and variable generation. This report explores situations in which energy storage systems can in fact lead to increased emissions, and offers reforms to correct for poor incentives while ensuring that energy storage can provide the maximum benefit possible to the grid.
How to Monetize Greenhouse Gas and Local Air Pollutant Reductions from Distributed Energy Resources
Distributed energy resources (DERs)—grid-connected, small-scale electric generators such as rooftop solar installations, micro-turbines, combined heat and power systems, customer backup generators, and distributed energy storage systems—are a growing part of the U.S. electric system. They can help avoid the high levels of greenhouse gases and local air pollution produced by traditional energy sources. As their use grows, state electric utility regulators are seeking to compensate DERs accurately for the benefits they offer, including reductions in pollution that contributes to climate change and harms human health. This report shows how regulators can calculate the types and amount of pollution avoided, and then monetize these benefits for use in policy.
Academic Article/Working Paper
Recent advances in technology and the consequent decline in manufacturing costs are making energy storage systems a central element of energy and climate change policy debates across the nation. Energy storage systems have the potential to provide many benefits such as lower electricity prices at peak demand times, deferred or avoided new capacity investments, and reduced greenhouse gas emissions. Indeed, both federal and state policymakers are enthusiastically encouraging more energy storage deployment with the belief that energy storage systems will help reduce greenhouse gas emissions from the electricity sector by making intermittent and variable renewable energy resources such as solar and wind more attractive.
What the Challengers Got Wrong at the D.C. Circuit Oral Argument
On September 27, opponents of the U.S. Environmental Protection Agency’s Clean Power Plan presented their case against the rule in a hearing before the U.S. Court of Appeals for the D.C. Circuit. The Clean Power Plan aims to reduce carbon dioxide emissions from the nation’s existing power plants. A coalition of states, utilities, coal companies, and other industry groups have sought to block the rule since it was first proposed in June 2014, while a competing group of states, municipalities, power companies, environmental and public health organizations, and clean energy producers have intervened to support the EPA. Over the course of the seven-hour hearing, the petitioners challenging the Clean Power Plan asserted and implied a number of things that don’t stand up to scrutiny. This report sets the record straight on some of their more notable misstatements.
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