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Federal Energy
Subsidies Falling

Federal energy subsidies in the U.S. dropped 23% from 2010 through 2013, according to a report from the U.S. Energy Information Administration (EIA).

According to EIA, total energy subsidies provided by the government decreased from $38 billion to $29.3 billion. The decline, notes EIA, reflects “changes in both the type of subsidies offered and fuels that received support.”

EIA says the report focuses on subsidies to electricity production and also includes subsidies to federal electric utilities in the form of financial support.

Subsidies related to electricity went up 38% during this time - from $11.7 billion to $16.1 billion. EIA attributes this growth to a $4.2 billion increase ($1.1 billion to $5.3 billion) in solar energy support, “reflecting a large increase in the installation rate of solar facilities utilizing the ARRA Section 1603 grant payments or the 30 percent investment tax credit.”

Wind energy subsidies also went up during this time period - from $5.5 billion to $5.9 billion.

The scope of the report is limited to direct federal financial interventions and subsidies that are provided by the federal government for specific energy markets.

 

IREC Releases Distributed Energy Storage Report

A report released by the Interstate Renewable Energy Council (IREC) says that the market for distributed energy storage, while still in its infancy, has a significant need for regulatory guidance and proactive policies to ensure a smooth integration into the existing electrical system.

According to “Deploying Distribution Energy Storage,” as the percentage of electricity generated from renewable energy sources continues to grow in the U.S. - particularly from solar photovoltaic systems - technologies that can facilitate increased deployment of renewable energy, such as distributed energy storage, are front and center in state and national discussions.

The report outlines why regulators should be interested in helping establish foundational policies to enable deployment of distributed storage. It discusses the specific uses and benefits of distributed storage and looks at the nature of current state policy efforts to address this possibility in the U.S.

Taking those factors into account, the report provides six key policy considerations, which are as follows:

• Designing rate structures that send economic signals to energy storage customers to encourage them to operate their system in a manner that benefits both the electric grid and the customer;
• Creating or modifying markets for ancillary services and demand response to enable energy storage customers to offer those services, either individually or in the aggregate;
• Updating interconnection standards to ensure that energy storage systems have fair and efficient access to the electrical grid;
• Clarifying eligibility rules for net-energy metering programs to maintain the integrity of those programs while also allowing storage systems to participate;
• Implementing a broader scope for distribution system planning and management than has been seen historically to create an electrical system that fully takes advantage of the benefits of energy storage when deployed with other distributed energy resources; and
• Coordinating oversight of energy storage systems with other governmental authorities to ensure safety without imposing duplicative or conflicting regulatory requirements.

“Distributed energy storage has enormous potential to be a vital tool for states that seek to expand the use of renewable energy while also offering additional services that can broadly improve the quality and efficiency of the electric service provided by utilities,” says the lead report author, Sky Stanfield, who represents IREC in regulatory matters. “IREC developed this report to help identify key regulatory changes that states may want to consider in the near term in order to facilitate rollout of distributed storage in a manner that captures the greatest benefits and promotes a healthy market for storage services.”

 

NYSERDA Broadens Solar Hot Water Program

The New York State Energy Research and Development Authority (NYSERDA) is broadening its Solar Hot Water Program to include projects that displace hot water produced by heating oil, natural gas, propane and wood, in addition to projects that displace electricity.

Previously, the program focused only on displacement of hot water produced by electricity. The changes are expected to increase the number of households and businesses able to install solar hot water systems.

Under new funding guidelines, the Solar Hot Water Program provides incentives of up to $6,000 per site for eligible one- to four-family homes and up to $150,000 per site for eligible commercial (including multifamily), agricultural, not-for-profit and government facilities. The program has $4.3 million available from the renewable portfolio standard to displace hot water produced by electricity through the end of this year and almost $3.4 million from the Regional Greenhouse Gas Initiative to displace hot water produced by non-electric fuel sources.

NYSERDA will begin accepting applications for the expanded Solar Hot Water Program starting March 20 on a first come, first served basis. Applications will be available through solar hot water installers for homes, commercial facilities, agricultural use, not-for-profits and government buildings.

“This solar hot water expansion is an opportunity for more residents, businesses and organizations to benefit from this clean energy resource,” says John B. Rhodes, president and CEO of NYSERDA.

 

Exelon Backs Carbon
Fee Option

Testifying before the U.S. Federal Energy Regulatory Commission at a technical conference to discuss the Environmental Protection Agency’s (EPA) proposed Clean Power Plan, Kathleen Barron, Exelon’s senior vice president of federal regulatory affairs and wholesale market policy, said that well-designed carbon reduction rules can be a driving force to modernize the country’s aging electric system, maximize the use of clean energy and support economic growth.

Barron said the EPA’s Clean Power Plan does not require making a choice between greenhouse-gas regulation and affordable, reliable energy. Rather, she said the U.S. can rely on existing market structures to incentivize investment in clean energy sources.

Barron said she supports imposing a carbon fee on plant emissions wherein the EPA would determine a single, nationwide adder for carbon emissions. Under such a plan, carbon-emitting power generators in states that opt into the plan would include the carbon fee as a variable cost of operating, and the state would be deemed in compliance with the EPA’s interim target.

The additional carbon value would reflect the true cost of operating high-emitting plants, Barron said, resulting in more clean energy sources being dispatched to the grid based on their lower true cost. R