Roll

1
Roll Class times Syllabus/readings Participation/c
lass discussion Strategy memo Office hours

• Today
• Government regulation of energy
• Historically
• Restructuring
• Renewable/alternative energy technologies

MON Introduction/historical context TUE
Siting facilities (lawpolitics) WED
Renewables Role in the Electric System THUR
RPS Exercise FRI Alternative fuels policies
2

• Historical Context of Energy Regulation
• What is energy?
• How have humans harnessed energy for their own
  use?

3
USEFUL ENERGY PRIMARY SOURCE USE
Mechanical energy for industrial use (e.g.,
mills) or to run electricity-generating turbines

• HYDRO (falling water, waves, tides) or WIND
• FOSSIL FUELS,
• BIOMASS, etc.
• URANIUM
• SOLAR

Combustion to produce useable heat or to generate
electricity (thermal)
Controlled atomic reaction releases heat to
produce electricity
Passive solar heat used directly or for thermal
generation or converted chemically to
electricity.
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US data Source EIA
5
Electrical energy
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Watt KW MW- GW capacity generation mwh
voltage Load load balancing dispatch
wheeling ancillary services
GENERATION TRANSMISSION DISTRIBUTION
End Users
Power Plant
Distributor
Transmission lines
Distribution lines
Few kV or less 000s kV lt10 kV 240V most
plants (home)
7
Interconnections of the North American Electric
Reliability Council in the Contiguous United
States
8

• U.S.
• gt 16,000 plants generating capacity gt 1,000 GW
• Generation 3.9 million gwh
• Sept 04 generation in CA gt 16,000 gwh
• Europe
• Approx 700 GW generating capacity
• Generation 2.9 million gwh
• UK 2003 generation 370,000 gwh

9
SOURCEEIA
10
Electric Generation Fuel Sources,
Worldwide Source IEA Key World Energy Statistics
2001
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Utility or state owned generators
Utility or state owned generators
natural monopoly IOU vs. state ownership
Residential users
Municipal Utility
Commercial users
Industrial users
Distribution System
Residential users
Commercial users
Industrial users
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ECONOMIC REGULATION Controlling price and other
aspects of competition GOAL Prevent monopoly
pricing

• Antitrust/Competition law
• Acquisition of price-setting power
• Collusion to fix price
• Use of market power unfairly or unreasonably to
  squelch competition

• Public Utility Regulation
• chartered monopoly
• administrative price setting
• Government Ownership

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Why choose public power?

• a reaction to perceived abuses of market power
• discomfort with private (and potentially foreign)
  ownership of strategically important sector
• ideological imperative (communism)
• belief that rates will be lower if provider (a)
  does not have profit motive, and/or (b) is
  electorally accountable

14

• PUBLIC POWER IN U.S.
• Federal Power Agencies (TVA, BPA)
• REA
• Municipal power
• Federal and municipal preferences

15
Municipal Utilities serve 43 million people, 14
of U.S. customers
Source APPA
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Private Ownership Regulation
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• Private Ownership Regulation
• COMMISSION FORM
• Plural executive appointed (feds) or elected
  (some states)
• Rate cases few rulemakings
• Staff represents ratepayers
• REGULATORY PRINCIPLES
• Natural monopoly certificate of convenience
  and necessity duty to serve
• Cost-based rate setting fair rate of return
  for shareholders on prudent investments

18
R Br O
FERC wholesale rates under Federal Power Act
and Natural Gas Act must be just and
reasonable State commissions retail rate
setting
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So why so much restructuring (and/or privatize)
in the 1990s?

• No cost minimization incentive ? suspicion that
  rates were unnecessarily high
• Changed thinking about scope of natural monopoly
• Pressure / flight of industrial and municipal
  power purchasers

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Produces energy at .05 per unit
Produces energy at .06 per unit
Produces energy at .04 per unit
Easton Gas Electric Co. Service Area
hospital
Village of Eastville
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Liberalisation of Gas and Electric
Markets Europe U.S.
1990 2005
1989-94 Following privatization, U.K. unbundles
electric and gas sales and distribution
services 1996-98 First EU gas and electricity
liberalisation directives (96/92/EC and 98/30/EC
) mandated some unbundling and competition for
some customer classes 1995-2000 Competitive
markets and unbundling achieved in UK market
uneven progress toward liberalisation elsewhere
in Europe 2003 New EU electricity and gas
directives (2003/54/EC and 2003/55/EC) mandated
full unbundling and competition by 2007
1992 full unbundling of interstate gas
transportation and sales (Order 636) wholesale
competition follows 1992-95 unbundling of
interstate power transmission and sales
introduction of wholesale competition (Energy
Policy Act of 92 Order 888) 1995-2000 some
states require unbundling of retail distribution
and sales, and retail competition (CA, NY, TX,
PA, MA and others) 2000-01 CA electricity
crisis 2001-present revision of market dominance
rules criminal and civil prosecution for
anticompetitive and fraudulent energy trading in
CA.
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Producer / generator
Producer / generator
Producer / generator
Transmission system TSO, ISO or RTO
Residential users

• Unbundling
• Wholesale competition
• Retail competition
• Grid management

Distribution System - DSO
Commercial users
Distribution System - DSO
Industrial users
Residential users
Commercial users
Industrial users
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(No Transcript)
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Renewable and Alternative Technologies
25

• Non-traditional energy sources
• PURPA alternative sources
• efficiency
• clean sources
• 80s ITC
• 90s PTC
• Renewables and RPSs

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Renewables Capacity/Production U.S. Wind
lt3 GW Hydro 94 GW Solar lt1 GW Biomass
11 GW Geothermal lt3 GW
Europe most of its renewables production is
hydro. Winds share, while small, is growing
rapidly, particularly in northern Europe (U.K.,
Denmark, Germany)
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Typical coal or nuclear plant 500-2000
MW. Wind turbines 50 KW 5 MW (wind farm
turbines are 700KW-2.5MW) Wind farms a few MW
to hundreds of MW (20MW farm, approx. 100
acres) Hydro stations a few KW to 18,000MW
(Three Gorges) most in US are lt 30 MW. Niagara
Falls station is gt1000 MW. PV cells
100W-300W/sq.m. Solar concentrating stations 1MW
to 10s of MW. (5 acres per MW) Biomass 15-60MW.
Landfill gas plants can be much
smaller. Geothermal 100 KW 100 MW
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Table 1-1 Classes of wind power density at 10 m
and 50 m(a). SOURCE NREL
What is wind power density?
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U.S. wind resources
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TABLE 3. Potential Electricity Production on
Windy Lands in Texas SOURCE TX State Energy
Conservn Office
Is this a lot or a little?
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UK wind farms, proposed (offshore) Danish wind
farm
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(No Transcript)
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(No Transcript)
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• Solar technologies
• PV
• Passive solar
• Collection troughs parabolic medium
• Power towers medium vs. no medium

36
SOURCE TX State Energy Conservation Office
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(No Transcript)
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• Ocean and Tidal Energy Technologies
• Ocean thermal energy
• Closed-cycle systems use the ocean's warm surface
  water to vaporize a working fluid, which has a
  low-boiling point, such as ammonia. The vapor
  expands and turns a turbine. The turbine then
  activates a generator to produce electricity.
• Open-cycle systems actually boil the seawater by
  operating at low pressures. This produces steam
  that passes through a turbine/generator.
• And hybrid systems combine both closed-cycle and
  open-cycle systems.
• Ocean mechanical energy A barrage (dam) plus
  turbine, moored tidal turbines, or tidal fence
  (connected series of turbines spanning a
  channel), is used to convert tidal energy into
  electricity by forcing the water through
  turbines, activating a generator.
• Wave energy
• channel systems funnel the waves into reservoirs
  
• float systems drive hydraulic pumps and
• oscillating water column systems use the waves to
  compress air within a container.

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Geothermal Technologies Dry steam power plants
steam is piped directly from underground wells to
the power plant, where it is directed into a
turbine/generator unit. Flash steam power
plants use geothermal reservoirs of water with
temperatures greater than 360F (182C). This
very hot water flows up through wells in the
ground under its own pressure. As it flows
upward, the pressure decreases and some of the
hot water boils into steam. The steam is then
separated from the water and used to power a
turbine/generator. Binary cycle power plants
use the heat from the hot water to boil a working
fluid, usually an organic compound with a low
boiling point. The working fluid is vaporized in
a heat exchanger and used to turn a turbine. CA
uses geothermal most widely
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Non-traditional energy sources