This article was co-authored by Jack Gross, a graduating senior of the George Washington University class of December 2020.
On October 15, 2020, the Federal Energy Regulatory Commission (FERC) announced in a proposed policy statement that it had jurisdiction over carbon pricing mechanisms within the wholesale electricity markets. In that same policy statement, FERC also confirmed it had the authority to approve such rules if brought forward by regional transmis- sion organizations (RTOs) and independent system operators (ISOs).
FERC’s announcement ushers in a new era of wholesale electricity market regulation, particularly for fossil-fuel power generators using natural gas, coal, and biomass. These generat- ing resources will no longer be able to rely on
inexpensive fuels to remain competitive. Instead, they will have to navigate carbon pric- ing mechanisms for existing and future power plants if they are to remain competitive in wholesale electricity markets designed to decarbonize the electric power sector. As is the case with any new proposal from FERC, it will take time for RTOs and ISOs to develop carbon pricing proposals with their stakeholders and market participants. This gives companies time to discuss and develop strategies.
Because fossil-fuel power generators consist of regulated electric utilities, electric and gas utilities and independent power producers (IPPs), each of their approaches to dealing with carbon pricing will likely vary. Some companies might take a “business as usual” approach, including operating existing power plants until the end of their existing economic life, even if it’s shortened by carbon pricing. Generation owners may also decide to do one or more of the following to address carbon pricing in wholesale electricity: [node:read-more:link]
On July 16, 2020, the President’s Council on Environmental Quality (CEQ) finalized an overhaul of the guidelines for implementing the National Environmental Policy Act (NEPA) regulations (rule). Supporters of the new regulations applauded the changes, but the states and numerous national environmental groups vowed to challenge the new rule in the courts. The timing of the final rule just prior to the Presidential election in November will also create a great deal of uncertainty for projects currently undergoing NEPA reviews and possible delays by those planning projects. [node:read-more:link]
We continue the analysis of hydrogen which began in Part 1. This time we cover the following topics:
- The status of efforts to blend hydrogen in the U.S. grid,
- What hydrogen blending means for decarbonizing natural gas,
- Regional opportunities to increase hydrogen in the U.S. and to serve Fuel-Cell Electric Vehicles (FCEV), and
- The Disconnect between hydrogen policy and green hydrogen production shortages
Existing technologies that produce blue hydrogen with carbon capture, use, and storage (CCUS) could be a bridge to widespread production of green H2, which is produced with renewable energy without carbon dioxide (CO2) emissions. By incentivizing and encouraging higher production of blue H2, which primarily uses natural gas, and green H2, the transportation sector could be decarbonized to combat the adverse effects of climate change. [node:read-more:link]
Why aren't state regulators getting behind renewable natural gas as they have for wind, solar and other renewable energy projects? The answer may be a one-size fits all mindset where electrification is viewed as the only solution to a successful energy transition. I'm not so sure that this is the case. The conventional wisdom is that RNG is the domain of state regulators, but a closer look at the challenges that RNG projects face shows that the FERC could reduce the costs of RNG projects wishing to interconnect to interstate natural gas pipelines. [node:read-more:link]
The U.S. and the world are undergoing an accelerated energy transition with high stakes regarding energy security. Concerns about climate change and greenhouse gas emissions are dominating the debate about which energy technologies are politically most acceptable to meet energy needs. Renewable energy, energy efficiency, and electric battery storage technologies appear to be the preferred technologies. However, we believe the notion that renewables and electric storage (batteries) are “clean” has been overstated. [node:read-more:link]
The use of electric storage is a critical component to the integration of intermittent clean energy technologies on the electric grid. That being said, however, just mentioning Pumped Storage Hydro (PSH) to some stakeholders often unleashes a torrent of criticism of how its use adversely affects riverine and lake aquatic systems. Nevertheless, PSH deserves another look, especially the Closed-Loop variety which does not affect rivers and lakes. [node:read-more:link]
I believe most US natural gas industry executives largely discount decarbonization of natural gas since the U.S. withdrew from the Paris Agreement. Given the pace if shale gas, LNG export and infrastructure investments, some executives might believe a future without natural gas is unrealistic. Despite natural gas' superior qualities, it might be risky to think the fuel has gotten a pass for replacing coal in power plants. [node:read-more:link]