An Ignoble Experiment

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State policy is the foundation of clean energy development in the United States and net metering and interconnection procedures are critical facilitators in supporting the continued growth of renewable energy, allowing individuals and businesses to connect renewable energy systems to the grid under transparent terms and receive credit for excess energy the produce while following practices of safety and reliability. Freeing the Grid, a report from the Vote Solar Initiative and the Interstate Renewable Energy Council (IREC), provides an annual objective record of state policy development in these areas.

Credit: Kiban/Wikimedia Commons

Freeing the Grid grades all 50 states on net metering and interconnection, which can empower American energy consumers to use rooftop solar and other small-scale renewables to meet their electricity needs.

"This is an exciting transition as renewables edge closer to mainstream status. However, policy design on the frontiers of our fast-changing clean energy marketplace can be a challenge to get right," said Jane Weissman, IREC president and CEO. "Freeing the Grid helps policymakers and other stakeholders make better sense of best practices and what needs to be done in their own state to clear the way for a 21st Century approach to energy."

Net metering policy ensures that renewable energy customers receive full credit on their utility bills for clean power they put back on the grid. The District of Columbia and Minnesota both improved their net metering grades over 2012, and not a single state grade declined. In total, more than two-thirds of United States qualifies for 'A' or 'B' grades.

Interconnection procedures allow customers to 'plug' their renewable energy system into the electricity grid. This process should be straightforward, transparent and fair. The Freeing the Grid interconnection grading methodology was recently updated to reflect current best practices. Under this new methodology, half of U.S. states receive 'A' or 'B' grades; the remaining states need significant improvement.

California, Massachusetts, Oregon and Utah reached excellence in both net metering and interconnection policies this year, leading the nation in allowing customer participation in the renewable energy market.

Washington made significant improvements to its statewide interconnection procedures, jumping from a D to a B. The changes remove unnecessary requirements and procedures for interconnecting smaller renewable energy systems, clearing the way for the more expedient review of larger systems.

With rooftop solar and other distributed generation growing at a record pace, states nationwide are undertaking comprehensive studies to assess the benefits and costs of this dynamic resource. These valuation studies are being used in many states to inform the future of net metering and, by extension, rooftop solar. IREC recommends that regulators, utilities and other stakeholders adopt a standardized set of 'best practice' methodologies to help ensure the accountability and verifiability of these benefit and cost estimates.

For more:
- see this report

Read more about: net metering
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2. Air modeling at E.D. Edwards coal plant shows pollution controls cannot wait

By Barbara Vergetis Lundin

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3. EU can learn from fracking trial and error

An air modeling study released by the Central Illinois Healthy Community Alliance reveals that the E.D. Edwards coal plant, currently operated by Ameren, is emitting sulfur dioxide at up to 7.5 times over the U.S. Environmental Protection Agency's (EPA) acceptable limit. The coal plant's sulfur dioxide emissions were analyzed in light of the new, more stringent EPA standards that reflect an up-to-date scientific consensus on emissions levels that present a risk to nearby communities.

E.D. Edwards coal plant. Credit: Sierra Club

Under the Clean Air Act, the EPA establishes National Ambient Air Quality Standards (NAAQS) for pollutants such as sulfur dioxide that harm public health. The Clean Air Act requires the EPA to revisit ambient standards for pollutants such as sulfur dioxide every five years to ensure the levels keep up with the best science regarding the threat of air pollution to public health. In June 2010, the EPA finalized a standard for sulfur dioxide setting a ceiling for ambient concentrations of the pollutant on a 1-hour basis to protect against short-term spikes in sulfur dioxide pollution, which the EPA found can have an adverse effect on at-risk populations such as children and the elderly during spikes in pollution in intervals as short as 5 minutes.

The E.D. Edwards coal plant is part of Ameren's no-cash sale of five Illinois coal plants to Texas-based energy company Dynegy. The plant currently has no modern pollution controls installed. Area residents are concerned with Dynegy's apparent lack of a plan to clean up the plan and install modern pollution controls. The Illinois Pollution Control Board (IPCB) is currently reviewing Dynegy's request for permission to delay installing widely-available pollution control technology until 2020.

For more:
- see this report

Related Article:
Ameren sale could set dangerous precedent

By Barbara Vergetis Lundin

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4. Availability payments lessen the pain of demand reduction

Under mounting pressure from green think tanks and political lobbyists, the governments of France, the United Kingdom, Denmark, and the Netherlands, have either suspended or slowed down hydraulic fracturing for shale gas extraction; however, the overwhelming economic benefits and promise of energy independence are likely to initiate changes in the long term to revive drilling activities, according to Frost & Sullivan.

Bayonne, France. Credit: Wikimedia Commons

"As every region and location is different, they are not all equally economically viable in terms of recoverable product, even if they have a large volume of reserves," said Ankur Jajoo, Frost & Sullivan energy and environment industry analyst. "Yet, it is important to resume drilling activity in the interest of lower energy costs, both regionally and globally."

Similar to North America, the European Union can learn through trial and error to arrive at winning strategies. For instance, it could better deal with issues relating to unconventional drilling by taking away a few lessons from the drilling project in Poland, where there were multiple challenges of low production volumes of gas, difficult geology, and high drilling costs in densely populated areas, Frost & Sullivan notes.

The cost of production in the United Kingdom is at least 50 percent higher than in the United States, and these costs could fall in the future through rapid technological advancements in drilling and logistical efficiencies in the value chain, according to Bloomberg Energy Finance.

If more countries engage in drilling, the improved infrastructure of pipelines and liquefied natural gas terminals throughout Europe will make the transportation far more economical and greatly develop the end-user market for natural gas, Frost & Sullivan contends.

For more:
- see this report

Read more about: fracking, hydraulic fracturing
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By Barbara Vergetis Lundin

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5. AWWA releases cost impact for pending perchlorate regulation

Availability payments are an effective demand-side tool for keeping electricity supply and demand in balance, according to research from NERA Economic Consulting, and will continue as such even if dynamic pricing becomes widespread. The research defines availability payments as promises of direct or in-kind payments to electricity customers in return for reductions in electricity demand when requested, otherwise known as demand response.

"Advocates of dynamic pricing -- in which customers pay electricity prices that reflect the hour-to-hour marginal economic cost of producing power -- have made availability payments somewhat controversial," said Jonathan Falk, NERA vice president.

On the contrary, NERA has found that availability payments have been successfully used in a variety of electricity markets.

First, NERA's findings of behavioral economics demonstrate that mechanisms like availability payments make it much easier to overcome consumers' cognitive biases against voluntary power demand reductions -- even if those reductions are in their best interest. Next, NERA discovered a clear analogy between availability payments and capacity markets for competitive generators. Finally, empirical results of NERA's research support the need for availability payments, including both direct support for the behavioral theory in the economics literature and support from a NERA-created database of participation rates for more than 900 programs in the United States.

Analysis of the programs showed that those utilizing availability payments have much higher participation rates than those that depend on consumers deciding on their own, moment-by-moment, when to cut back electricity usage.

For more:
- see the report

Read more about: Demand Response
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By Barbara Vergetis Lundin

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