2017 was a whirlwind for the electric power sector.

The utility industry saw the death of two utility mega-projectsjaw-dropping prices for renewable energy and storage and a federal subsidy proposal that threatened to “blow up” the wholesale power markets. And that was just the second half of the year.

2018 promises to be no different. From EPA speeding through a Clean Power Plan replacement to FERC’s “truncated” resilience docket and the first federal pipeline policy review since 1999, the sector’s plate is full even before state and local issues come into play.

Fortunately, events of the last year give a good indication of which issues are likely to dominate in 2018. Here’s what we’ll be watching.

Focus on resilience

Not a month into the new year and the sector’s buzzword is resilience. Utilities and regulators have long addressed resilience — the ability to bounce back from power outages — through resources like fast-start plants and microgrids. But the concept gained new significance in September when Secretary of Energy Rick Perry positioned it as a central justification for a proposed rule at the Federal Energy Regulatory Commission to subsidize coal and nuclear plants.

Perry’s proposal would have lent cost recovery to merchant generators with 90 days of fuel supply onsite, a requirement that critics said was unrealistic, expensive and would do little to benefit the grid. One oft-cited analysis from the Rhodium Group showed that fuel security issues hardly added to customer outage hours in recent years — and those that did largely stemmed from a single coal plant.

FERC largely agreed, writing in a 5-0 rejection that DOE and its allies failed to prove the fuel security provision would improve the grid. Regulators, however, lauded the DOE’s focus on resilience, asking regional grid operators to report back in 60 days about how it can be enhanced. Perry “asked the right question,” said Commissioner Neil Chatterjee, but “proposed the wrong remedy.”

FERC’s new grid resilience docket ensures that a main focus of the power sector in 2018 will be finding technologies and market rules that can drive down the customer outage hours. Industry stakeholders have 30 days to comment on the FERC docket after the grid operators’ deadline, but the proceeding could well run longer, so expect a flurry of lobbying from power groups on how to value their “resiliency attributes” in the months to come.

Wholesale pricing reforms

Perry’s proposal to save coal and nuclear plants filled the headlines in the last quarter of 2017, but regional grid operators have been working for years on more gradual pricing changes that could benefit the same resources.

Proposals working their way through markets like PJM, ISO-New England, MISO and others differ in construction, but have a similar aim: boost payments to existing generators in the face of low wholesale power prices. The goal is to ensure enough of these plants can recover their costs so they do not go offline, threatening reliability.


 

Compartilhe:

Deixe um comentário

O seu endereço de e-mail não será publicado. Campos obrigatórios são marcados com *