{"id":184,"date":"2012-01-25T09:08:46","date_gmt":"2012-01-25T15:08:46","guid":{"rendered":"https:\/\/allenergyconsulting.com\/blog\/?p=184"},"modified":"2012-02-07T07:11:31","modified_gmt":"2012-02-07T13:11:31","slug":"renewable-portfolio-standards-require-a-portfolio","status":"publish","type":"post","link":"https:\/\/allenergyconsulting.com\/blog\/2012\/01\/25\/renewable-portfolio-standards-require-a-portfolio\/","title":{"rendered":"Renewable Portfolio Standards \u2013 Require a Portfolio"},"content":{"rendered":"

Many utilities fulfill their renewable portfolio standards with very few options.\u00a0 The easy way for the utility is to do a Power Purchase Agreement (PPA).\u00a0\u00a0 Most PPA\u2019s are for wind as it has been the economic leader of the renewable choices.\u00a0 Essentially, the utility typically requires the commission to approve the agreement.\u00a0 Once the commission agrees the PPA becomes a cost pass thru.\u00a0\u00a0 Given the numerous market structures throughout the country, the cost recovery is done through various mechanisms.\u00a0\u00a0 In the end, the rate payer will pay whether they like it or can afford it.\u00a0 The worst form of cost pass thru is where the utility puts the cost in the distribution rates.\u00a0 This obscures the tracking of actual generation cost.<\/span><\/span><\/p>\n

Regardless of the mechanism, utilities incentives to do renewable is to avoid costly penalties which are typically paid by shareholders not rate payers.\u00a0\u00a0 The PPA usually will not mandate the developer to a fixed amount of volume.\u00a0\u00a0 There is a performance criteria and several demonstrated calculations proving a certain yield is very likely.\u00a0 However, as we all know Mother Nature offers no guarantees. \u00a0I can envision a year where the sun does not shine or the wind does not blow as much as predicted\/expected.\u00a0 This could lead to a massive short of renewable credits.\u00a0\u00a0 In developing an Integrated Resource Plan (IRP), much focus is given to reliability.\u00a0 Therefore a diversity of various generation options (baseload, intermediate, peaking, and market purchases) is a typical outcome.\u00a0\u00a0 An IRP should strive for robustness not optimal planning, since the future is quite unpredictable and electricity is a unique commodity with limited storage and particular characteristics to maintain (e.g. frequency).\u00a0 I can tell you from multiple experiences, when the lights are out many would gladly pay more for better reliability.<\/span><\/span><\/p>\n

If utilities would approach their renewable portfolio standard similar to their IRP, it would suggest a balanced portfolio approach.\u00a0 The portfolio would give some added value to the higher upfront capital risk projects such as geothermal and biomass.\u00a0\u00a0 These types of generation would represent the baseload of the renewable portfolio.\u00a0 This will allow for a consistent level of renewable regardless of weather conditions.\u00a0 Adding to the diversity of the portfolio in many instances, I would suggest the utility to actually invest a portion to develop and operate renewable assets versus PPA.\u00a0 Given the similar operating features of geothermal and biomass to fossil fuel units, they would make an ideal candidate to be owned and operated within the renewable portfolio.\u00a0 In the long run, the capital spend will also likely payoff for the utility shareholders.\u00a0\u00a0 As discussed above current wind PPA\u2019s are just passed through with all the value going to the developer.\u00a0 An investment in actual renewable baseload generation allows the utility to capture some return on investment.<\/span><\/span><\/p>\n

I have much experience in the renewable world.\u00a0 I have served on the technical review panel of the National Renewable Energy Laboratory (NREL).\u00a0 In addition with my utility planning background, I can bridge the two areas to help you create a robust renewable portfolio.\u00a0 <\/span><\/span><\/p>\n

We positively and evocatively challenge the current thinking involving any aspect of energy use. We look for projects that offer meaningful, transformative, with impactful outcome to the marketplace or society (see projects<\/a>).<\/p>\n

Please consider All Energy Consulting for your consulting needs.<\/p>\n

Your Energy Consultant,<\/span><\/span><\/p>\n

David K. Bellman<\/span><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Many utilities fulfill their renewable portfolio standards with very few options.\u00a0 The easy way for the utility is to do a Power Purchase Agreement (PPA).\u00a0\u00a0 Most PPA\u2019s are for wind as it has been the economic leader of the renewable choices.\u00a0 Essentially, the utility typically requires the commission to approve the agreement.\u00a0 Once the commission […]<\/p>\n","protected":false},"author":1,"featured_media":34,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1,6,17],"tags":[59,56,57,60,8,62,61,55,20,58],"class_list":["post-184","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-market-insights","category-power","category-renewables","tag-biomass","tag-integrated-resource-planning","tag-irp","tag-nrel","tag-planning","tag-power-purchase-agreement","tag-ppa","tag-renewable-portfolio-standards","tag-renewables-2","tag-wind-geothermal"],"_links":{"self":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/184","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/comments?post=184"}],"version-history":[{"count":8,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/184\/revisions"}],"predecessor-version":[{"id":226,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/posts\/184\/revisions\/226"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/media\/34"}],"wp:attachment":[{"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/media?parent=184"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/categories?post=184"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/allenergyconsulting.com\/blog\/wp-json\/wp\/v2\/tags?post=184"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}