An Ignoble Experiment

eBook | Creating A Scalable Enterprise

Coal's affordability and reliability as an energy source, coupled with emission reduction technology, could give the United States a significant edge competitively over other countries, but instead regulators are squandering an opportunity by proposing emission standards that cannot be met with current technology, with the likely result of shutting down half of the country's coal-fired power plants. That is what the Pennsylvania Coal Alliance's CEO John Pippy testified to before the Congressional Subcommittee on Oversight and Investigations, which is examining the effects of the Environmental Protection Agency's regulatory actions on jobs and local communities particularly reliant upon the coal.

The Kintigh Generating Station in Somerset, New York. Credit: Matthew D. Wilson (LtPowers)/Wikimedia Commons

Pippy objected to proposed federal carbon emission standards, which the Obama administration has said it will attempt to impose without input from Congress. The standards initiative could force the shutdown of approximately 225 U.S. coal-fired power plants.

"America's global leadership in emission reduction technology gives us a huge competitive advantage, and we should capitalize on that. Instead, we are unilaterally taking a domestic energy source out of the energy mix, at the cost of jobs, higher electricity prices and a less reliable grid, for something that won't even have significant environmental benefits," Pippy said. "A better solution would be to work collaboratively with energy stakeholders and encourage the development of newer emission reduction technology that will preserve our competitive advantage over developing countries such as India and China, and which will ultimately lead to greater environmental benefits globally."

Pippy noted that India and China are burning coal at significantly higher levels than the U.S. and that both countries have been increasing their reliance on coal, a trend that will only continue.

"These proposed regulations amount to unilateral economic disarmament," he said. "In essence, we're proposing to voluntarily tie one hand behind our back as we compete with these emerging giants in the global economic arena."

Pippy encourages collaboration similar to that of the American auto industry where federal regulators have collaborated to improve fuel efficiency standards, helping preserve the auto industry.

"That's what we should do here," Pippy said. "We can't afford the consequences of shutting down an industry that contributes to our economy on this level, and whose emerging technologies can help address environmental needs on a much more globally comprehensive scale."

For more:
- see this report

This week's sponsor is Windstream.

As enterprises capture and create data scaling up into petabytes and beyond, it’s not just a matter of adding a few more CPUs and disks. The storage may need to reside physically closer to the processing resources. Learn more today!

2. Demand response lacking customer participation

By Barbara Vergetis Lundin

Comment |

3. Research identifies issues key to understanding power market structure

Technology and service provider communities have adopted standards, driven costs down and made customer adoption of demand response a more compelling and easier proposition with technology and implementation costs and customer ROI combined with targeted utility incentives and ISO capacity markets driving continued growth in the commercial and industrial demand response markets. That is according to research from the Peak Load Management Alliance (PLMA) conducted by Skipping Stone.

The research concluded utilities using outsourced service providers and fielding a sales force to reach mass market with demand response was the most effective while the use of telemarketing, social media, bill inserts and other non-personal customer acquisition methods was significantly less effective.

The two most compelling reasons for demand response programs for municipal and cooperative utilities were avoiding wholesale price spikes or avoiding building new generation. The biggest challenge for distribution utilities is predicting customer response behavior, according to 65 percent of respondents.

Leveraging demand response as a balancing agent for renewable generation remains popular among utility respondents, second only to battery solutions for renewable balancing. When it comes to up and coming grid interactive water heating programs, survey results indicate a need for more market education.

"To truly derive the grid and environmental benefits demand response can deliver, there is considerably more customer participation needed. To facilitate further customer adoption, the market will also need regulators and utilities to offer economically viable customer incentive programs as well," said Ross Malme, PLMA Executive Committee member and Skipping Stone partner.

For more:
- see this report

Read more about: Ross Malme, Demand Response
back to top

By Barbara Vergetis Lundin

Comment |

4. Natural gas disconnect: Who pays for more pipeline?

The Electric Markets Research Foundation (EMRF) has released a unique report by Navigant Consulting, Inc., the intent of which is to educate and define issues rather than draw conclusions. The report compares the development of traditionally regulated electricity markets with more recent restructured power markets often accompanied by retail customer choice.

"Despite the long-standing market-versus-regulation debate, there has been remarkably little independent investigation of the key issues critical to understanding the nation's two distinctive different electricity systems," said Bruce Edelston, EMRF president. "This independent report by Navigant, the first in a series of planned research papers, is designed to help fill that void."

The report examines how electric utility regulation has evolved and why centralized markets developed in the Northeast, the Mid-Atlantic region, much of the Midwest, Texas and California but not in others, especially the Southeast, most of the Southwest and parts of the Midwest and West. The research provides an overview of the history of regulation and competition in the power industry, from the foundations of regulation in early U.S. Supreme Court history through key statutory developments, including the Federal Power Act and the Public Utility Holding Company Act, to restructuring in many regions and the Federal Energy Regulatory Commission's Order 1000.

One key area identified in the report is how each power market structure ensures the planning and construction of sufficient generating capacity for utility customers. EMRF has selected this issue because policy makers and regulators across the country are increasingly concerned about generation adequacy in both centralized markets with regional transmission organizations and regulated markets with vertically integrated utilities.

For more:
- see this report

By Barbara Vergetis Lundin

Comment |

5. ESCOs key to energy-efficiency retrofits

The North American natural gas industry is embarking on a period of sustained growth driven by low-cost shale gas resources, with demand from the power generation market nearly doubling by 2020, according to research from Black & Veatch. However, in order for the economy to fully realize its benefits, industry leaders will have to address the challenges of a rapidly evolving U.S. energy market.

Credit: Juan de Vojníkov/Wikimedia Commons

"The report's findings show that stakeholders across the value chain must work together and compromise on key issues," said Peter Abt, managing director, Black & Veatch's oil & gas strategy practice. "The general consensus is that more pipeline capacity is needed. How this capacity is financed -- and who pays for it -- is the area of disconnect. Without pipeline investment, the natural gas industry's growth will slow and consumers could see dramatic price swings."

Even so, growth is expected to continue with more than 95 percent of natural gas industry leaders having an "optimistic" or "very optimistic" outlook on the future of the industry -- optimism that is driven largely by expected growth in the power generation, liquefied natural gas (LNG) export and transportation markets.

Commodity enhancement is a growing trend among natural gas producers with a growing interest among producers for onsite liquefied natural gas and/or compressed natural gas production, providing producers with new market opportunities as well as potential operational enhancements.

U.S. LNG exports have cost benefits over global competitors, according to the report. In addition to lower pricing, U.S. LNG export prospects benefit from the existence of eight brownfield LNG terminal projects which were previously developed to import natural gas. Much of the existing infrastructure can be used for export terminal purposes, speeding access to market for U.S. gas and supporting their competitive advantage over most international projects.

For more:
- see the report

Read more about: Peter Abt, Black & Veatch
back to top

By Barbara Vergetis Lundin

Comment |