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Centrales au gaz et Energies renouvelables: comparer des pommes avec des pommes

Description: The fundamental conclusion that we draw from this analysis is that one should not to base itself blindly on forecasts prices of natural gas when one compare contracts at price fixes with producers of renewable energy with contracts at variable prices with promoters power stations with gas. Indeed, forecasts of the prices of gas do not succeed not to enter the associated costs with the covering of the risk, that they are connected to the negative pressure against the cover, with the CAPM, with costs of transaction or with unspecified combination of three. Thus, insofar as price stability to length term is developed, better way of comparing the two choices would be to have recourse to the data on the prices in the long term natural gas, and not with forecasts of the prices. During three last years at least, the use of these prices in the long term would have besides license to correct a methodological error who, obviously, seem to have supported unduly, and of relatively important way, power stations with natural gas compared to their competitors of renewable energies.
Date: October 20, 2003
Creator: Bolinger, Mark; Wiser, Ryan & Golove, William
Partner: UNT Libraries Government Documents Department

Accounting for fuel price risk when comparing renewable togas-fired generation: the role of forward natural gas prices

Description: Unlike natural gas-fired generation, renewable generation (e.g., from wind, solar, and geothermal power) is largely immune to fuel price risk. If ratepayers are rational and value long-term price stability, then--contrary to common practice--any comparison of the levelized cost of renewable to gas-fired generation should be based on a hedged gas price input, rather than an uncertain gas price forecast. This paper compares natural gas prices that can be locked in through futures, swaps, and physical supply contracts to contemporaneous long-term forecasts of spot gas prices. We find that from 2000-2003, forward gas prices for terms of 2-10 years have been considerably higher than most contemporaneous long-term gas price forecasts. This difference is striking, and implies that comparisons between renewable and gas-fired generation based on these forecasts over this period have arguably yielded results that are biased in favor of gas-fired generation.
Date: July 17, 2004
Creator: Bolinger, Mark; Wiser, Ryan & Golove, William
Partner: UNT Libraries Government Documents Department

The Impact of Retail Rate Structures on the Economics ofCommercial Photovoltaic Systems in California

Description: To achieve a sizable and self-sustaining market for grid-connected, customer-sited photovoltaic (PV) systems, solar will likely need to be competitive with retail electricity rates. In this report, we examine the impact of retail rate design on the economic value of commercial PV systems in California. Using 15-minute interval building load and PV production data from 24 actual commercial PV installations, we compare the value of the bill savings across 20 commercial customer retail rates currently offered in the state. We find that the specifics of the rate structure, combined with the characteristics of the customer's underlying load and the size of the PV system, can have a substantial impact on the customer-economics of commercial PV systems. Key conclusions for policymakers that emerge from our analysis are as follows: {sm_bullet} Rate design is fundamental to the economics of commercial PV. The rate-reduction value of PV for our sample of commercial customers, considering all available retail tariffs, ranges from $0.05/kWh to $0.24/kWh, reflecting differences in rate structures, the revenue requirements of the various utilities, the size of the PV system relative to building load, and customer load shapes. For the average customer in our sample, differences in rate structure, alone, alter the value of PV by 25% to 75%, depending on the size of the PV system relative to building load. {sm_bullet} TOU-based energy-focused rates can provide substantial value to many PV customers. Retail rates that wrap all or most utility cost recovery needs into time-of-use (TOU)-based volumetric energy rates, and which exclude or limit demand-based charges, provide the most value to PV systems across a wide variety of circumstances. Expanding the availability of such rates will increase the value of many commercial PV systems. {sm_bullet} Offering commercial customers a variety of rate options would be of value to PV. Despite the ...
Date: July 3, 2007
Creator: Wiser, Ryan; Mills, Andrew; Barbose, Galen & Golove, William
Partner: UNT Libraries Government Documents Department

Retail Choice Experiments: Comparing Early-AdopterExperience

Description: This paper reviews the experience with retail choice of non-residential electricity customers during the period from early 1998 through the first few months of 2000. Key findings include: (1) customers in California received a significantly smaller discount from utility tariffs than customers in other competitive markets; (2) this sample of large commercial/industrial customers believed they were benefiting significantly more from commodity savings from contracts with retail electricity service providers (RESP) than from value-added services; and,(3) market rules appear to be critical to customer experiences with retail competition, yet the relationship between market rules and market development is inadequately understood.
Date: March 1, 2003
Creator: Golove, William
Partner: UNT Libraries Government Documents Department

The Impact of Retail Rate Structures on the Economics of Commercial Photovoltaic Systems in California

Description: This article examines the impact of retail electricity rate design on the economic value of grid-connected photovoltaic (PV) systems, focusing on commercial customers in California. Using 15-minute interval building load and PV production data from a sample of 24 actual commercial PV installations, we compare the value of the bill savings across 20 commercial-customer retail electricity rates currently offered in the state. Across all combinations of customers and rates, we find that the annual bill savings from PV, per kWh generated, ranges from $0.05/kWh to $0.24/kWh. This sizable range in rate-reduction value reflects differences in rate structures, revenue requirements, the size of the PV system relative to building load, and customer load shape. The most significant rate design issue for the value of commercial PV is found to be the percentage of total utility bills recovered through demand charges, though a variety of other factors are also found to be of importance. The value of net metering is found to be substantial, but only when commercial PV systems represent a sizable portion of annual customer load. Though the analysis presented here is specific to California, our general results demonstrate the fundamental importance of retail rate design for the customer-economics of grid-connected, customer-sited PV.
Date: May 11, 2008
Creator: Mills, Andrew; Wiser, Ryan; Barbose, Galen & Golove, William
Partner: UNT Libraries Government Documents Department

Tariffs Can Be Structured to Encourage Photovoltaic Energy

Description: The solar power market is growing at a quickening pace, fueled by an array of national and local initiatives and policies aimed at improving the value proposition of customer-sited photovoltaic (PV) systems. Though these policies take many forms, they commonly include up-front capital cost rebates or ongoing production incentives, supplemented by net metering requirements to ensure that customer-sited PV systems offset the full retail rate of the customer-hosts. Somewhat less recognized is the role of retail rate design, beyond net metering, on the customer-economics of grid-connected PV. Over the life of a PV system, utility bill savings represent a substantial portion of the overall economic value received by the customer. At the same time, the design of retail electricity rates, particularly for commercial and industrial customers, can vary quite substantially. Understanding how specific differences in rate design affect the value of customer-sited PV is therefore essential to supporting the continued growth of this market.
Date: August 31, 2008
Creator: Wiser, Ryan; Mills, Andrew; Barbose, Galen & Golove, William
Partner: UNT Libraries Government Documents Department

Revisiting the 'Buy versus Build' decision for publicly owned utilities in California considering wind and geothermal resources

Description: The last two decades have seen a dramatic increase in the market share of independent, non-utility generators (NUGs) relative to traditional, utility-owned generation assets. Accordingly, the ''buy versus build'' decision facing utilities--i.e., whether a utility should sign a power purchase agreement (PPA) with a NUG, or develop and own the generation capacity itself--has gained prominence in the industry. Specific debates have revolved around the relative advantages of, the types of risk created by, and the regulatory incentives favoring each approach. Very little of this discussion has focused specifically on publicly owned electric utilities, however, perhaps due to the belief that public power's tax-free financing status leaves little space in which NUGs can compete. With few exceptions (Wiser and Kahn 1996), renewable sources of supply have received similarly scant attention in the buy versus build debate. In this report, we revive the ''buy versus build'' debate and apply it to the two sectors of the industry traditionally underrepresented in the discussion: publicly owned utilities and renewable energy. Contrary to historical treatment, this debate is quite relevant to public utilities and renewables because publicly owned utilities are able to take advantage of some renewable energy incentives only in a ''buy'' situation, while others accrue only in a ''build'' situation. In particular, possible economic advantages of public utility ownership include: (1) the tax-free status of publicly owned utilities and the availability of low-cost debt, and (2) the renewable energy production incentive (REPI) available only to publicly owned utilities. Possible economic advantages to entering into a PPA with a NUG include: (1) the availability of federal tax credits and accelerated depreciation schedules for certain forms of NUG-owned renewable energy, and (2) the California state production incentives available to NUGs but not utilities. This report looks at a publicly owned utility's decision to buy or ...
Date: October 1, 2001
Creator: Bolinger, Mark; Wiser, Ryan & Golove, William
Partner: UNT Libraries Government Documents Department

Accounting for fuel price risk: Using forward natural gas prices instead of gas price forecasts to compare renewable to natural gas-fired generation

Description: Against the backdrop of increasingly volatile natural gas prices, renewable energy resources, which by their nature are immune to natural gas fuel price risk, provide a real economic benefit. Unlike many contracts for natural gas-fired generation, renewable generation is typically sold under fixed-price contracts. Assuming that electricity consumers value long-term price stability, a utility or other retail electricity supplier that is looking to expand its resource portfolio (or a policymaker interested in evaluating different resource options) should therefore compare the cost of fixed-price renewable generation to the hedged or guaranteed cost of new natural gas-fired generation, rather than to projected costs based on uncertain gas price forecasts. To do otherwise would be to compare apples to oranges: by their nature, renewable resources carry no natural gas fuel price risk, and if the market values that attribute, then the most appropriate comparison is to the hedged cost of natural gas-fired generation. Nonetheless, utilities and others often compare the costs of renewable to gas-fired generation using as their fuel price input long-term gas price forecasts that are inherently uncertain, rather than long-term natural gas forward prices that can actually be locked in. This practice raises the critical question of how these two price streams compare. If they are similar, then one might conclude that forecast-based modeling and planning exercises are in fact approximating an apples-to-apples comparison, and no further consideration is necessary. If, however, natural gas forward prices systematically differ from price forecasts, then the use of such forecasts in planning and modeling exercises will yield results that are biased in favor of either renewable (if forwards < forecasts) or natural gas-fired generation (if forwards > forecasts). In this report we compare the cost of hedging natural gas price risk through traditional gas-based hedging instruments (e.g., futures, swaps, and fixed-price physical supply ...
Date: August 13, 2003
Creator: Bolinger, Mark; Wiser, Ryan & Golove, William
Partner: UNT Libraries Government Documents Department

The Impact of Retail Rate Structures on the Economics ofCustomer-Sited PV: A Study of Commercial Installations inCalifornia

Description: We analyze the impact of retail rate design on the economics of grid-connected commercial photovoltaic (PV) systems in California. The analysis is based on 15-minute interval building load and PV production data for 24 commercial PV installations in California, spanning a diverse set of building load shapes and geographic locations. We derive the annual bill savings per kWh generated for each PV system, under each of 21 distinct retail rates currently offered by the five largest utilities in California. We identify and explain variation in the value of bill savings attributable to differences in the structure of demand and energy charges across rates, as well as variation attributable to other factors, such as the size of the PV system relative to building load, the specific shape of the PV production profile, and the customer load profile. We also identify the optimal rate for each customer, among those rates offered as alternatives to one another, and show how the decision is driven in large measure by the size of the PV system relative to building load. The findings reported here may be of value to regulators and utilities responsible for designing retail rates, as well as to customers and PV retailers who have a need to estimate the prospective bill savings of PV systems.
Date: June 1, 2007
Creator: Wiser, Ryan; Mills, Andrew; Barbose, Galen & Golove, William
Partner: UNT Libraries Government Documents Department

The impact of retail rate structures on the economics of commercial photovoltaic systems in California

Description: This article examines the impact of retail electricity rate design on the economic value of grid-connected photovoltaic (PV) systems, focusing on commercial customers in California. Using 15-min interval building load and PV production data from a sample of 24 actual commercial PV installations, we compare the value of the bill savings across 20 commercial-customer retail electricity rates currently offered in the state. Across all combinations of customers and rates, we find that the annual bill savings from PV, per kWh generated, ranges from $0.05 to $0.24/kWh. This sizable range in rate-reduction value reflects differences in rate structures, revenue requirements, the size of the PV system relative to building load, and customer load shape. The most significant rate design issue for the value of commercial PV is found to be the percentage of total utility bills recovered through demand charges, though a variety of other factors are also found to be of importance. The value of net metering is found to be substantial, but only when energy from commercial PV systems represents a sizable portion of annual customer load. Though the analysis presented here is specific to California, our general results demonstrate the fundamental importance of retail rate design for the customer-economics of grid-connected, customer-sited PV.
Date: June 24, 2008
Creator: Mills, Andrew D.; Wiser, Ryan; Barbose, Galen & Golove, William
Partner: UNT Libraries Government Documents Department

Revisiting the 'Buy versus Build' Decision for Publicly Owned Utilities in California Considering Wind and Geothermal Resources

Description: The last two decades have seen a dramatic increase in the market share of independent, nonutility generators (NUGs) relative to traditional, utility-owned generation assets. Accordingly, the ''buy versus build'' decision facing utilities--i.e., whether a utility should sign a power purchase agreement (PPA) with a NUG, or develop and own the generation capacity itself--has gained prominence in the industry. Very little of this debate, however, has focused specifically on publicly owned electric utilities, and with few exceptions, renewable sources of supply have received similarly scant attention. Contrary to historical treatment, however, the buy versus build debate is quite relevant to publicly owned utilities and renewables because publicly owned utilities are able to take advantage of some renewable energy incentives only in a ''buy'' situation, while others accrue only in a ''build'' situation. In particular, possible economic advantages of public utility ownership include: (1) the tax-free status of publicly owned utilities and the availability of low-cost debt, and (2) the renewable energy production incentive (REPI) available only to publicly owned utilities. Possible economic advantages to entering into a PPA with a NUG include: (1) the availability of federal tax credits and accelerated depreciation schedules for certain forms of NUG-owned renewable energy, and (2) the California state production incentives available to NUGs but not utilities. This article looks at a publicly owned utility's decision to buy or build new renewable energy capacity--specifically wind and geothermal power--in California. To examine the economic aspects of this decision, we used a 20-year financial cash-flow model to assess the levelized cost of electricity under four supply options: (1) public utility ownership of new geothermal capacity, (2) public utility ownership of new wind capacity, (3) a PPA for new geothermal capacity, and (4) a PPA for new wind capacity. We focus on wind and geothermal because both resources ...
Date: December 11, 2001
Creator: Bolinger, Mark; Wiser, Ryan & Golove, William
Partner: UNT Libraries Government Documents Department

Comparing the risk profiles of renewable and natural gas electricity contracts: A summary of the California Department of Water Resources contracts

Description: Electricity markets in the United States have witnessed unprecedented instability over the last few years, with substantial volatility in wholesale market prices, significant financial distress among major industry organizations, and unprecedented legal, regulatory and legislative activity. These events demonstrate the considerable risks that exist in the electricity industry. Recent industry instability also illustrates the need for thoughtful resource planning to balance the cost, reliability, and risk of the electricity supplied to end-use customers. In balancing different supply options, utilities, regulators, and other resource planners must consider the unique risk profiles of each generating source. This paper evaluates the relative risk profiles of renewable and natural gas generating plants. The risks that exist in the electricity industry depend in part on the technologies that are used to generate electricity. Natural gas has become the fuel of choice for new power plant additions in the United States. To some, this emphasis on a single fuel source signals the potential for increased risk. Renewable generation sources, on the other hand, are frequently cited as a potent source of socially beneficial risk reduction relative to natural gas-fired generation. Renewable generation is not risk free, however, and also imposes certain costs on the electricity sector. This paper specifically compares the allocation and mitigation of risks in long-term natural gas-fired electricity contracts with the allocation and mitigation of these same risks in long-term renewable energy contracts. This comparison highlights some of the key differences between renewable and natural gas generation that decision makers should consider when making electricity investment and contracting decisions. Our assessment is relevant in both regulated and restructured markets. In still-regulated markets, the audience for this report clearly includes regulators and the utilities they regulate. In restructured markets, the role of regulatory oversight of resource planning is more limited. Nonetheless, even in restructured ...
Date: March 12, 2003
Creator: Bachrach, Devra; Wiser, Ryan; Bolinger, Mark & Golove, William
Partner: UNT Libraries Government Documents Department

Quantifying the value that energy efficiency and renewable energy provide as a hedge against volatile natural gas prices

Description: Advocates of energy efficiency and renewable energy have long argued that such technologies can mitigate fuel price risk within a resource portfolio. Such arguments--made with renewed vigor in the wake of unprecedented natural gas price volatility during the winter of 2000/2001--have mostly been qualitative in nature, however, with few attempts to actually quantify the price stability benefit that these sources provide. In evaluating this benefit, it is important to recognize that alternative price hedging instruments are available--in particular, gas-based financial derivatives (futures and swaps) and physical, fixed-price gas contracts. Whether energy efficiency and renewable energy can provide price stability at lower cost than these alternative means is therefore a key question for resource acquisition planners. In this paper we evaluate the cost of hedging gas price risk through financial hedging instruments. To do this, we compare the price of a 10-year natural gas swap (i.e., what it costs to lock in prices over the next 10 years) to a 10-year natural gas price forecast (i.e., what the market is expecting spot natural gas prices to be over the next 10 years). We find that over the past two years natural gas users have had to pay a premium as high as $0.76/mmBtu (0.53/242/kWh at an aggressive 7,000 Btu/kWh heat rate) over expected spot prices to lock in natural gas prices for the next 10 years. This incremental cost to hedge gas price risk exposure is potentially large enough - particularly if incorporated by policymakers and regulators into decision-making practices - to tip the scales away from new investments in variable-price, natural gas-fired generation and in favor of fixed-price investments in energy efficiency and renewable energy.
Date: May 15, 2002
Creator: Bolinger, Mark; Wiser, Ryan; Bachrach, Devra & Golove, William
Partner: UNT Libraries Government Documents Department

Quantifying the value that wind power provides as a hedge against volatile natural gas prices

Description: Advocates of renewable energy have long argued that wind power and other renewable technologies can mitigate fuel price risk within a resource portfolio. Such arguments--made with renewed vigor in the wake of unprecedented natural gas price volatility during the winter of 2000/2001--have mostly been qualitative in nature, however, with few attempts to actually quantify the price stability benefit that wind and other renewables provide. This paper attempts to quantify this benefit by equating it with the cost of achieving price stability through other means, particularly gas-based financial derivatives (futures and swaps). We find that over the past two years, natural gas consumers have had to pay a premium of roughly 0.50 cents/kWh over expected spot prices to lock in natural gas prices for the next 10 years. This incremental cost is potentially large enough to tip the scales away from new investments in natural gasfired generation and in favor of investments in wind power and other renewable technologies.
Date: May 31, 2002
Creator: Bolinger, Mark; Wiser, Ryan & Golove, William
Partner: UNT Libraries Government Documents Department

Using Energy Information Systems (EIS): A Guidebook for the U.S. Postal Service

Description: The U.S. Postal Service (Postal Service) recently installed Energy Information Systems (EIS) at 30 facilities in California. These systems integrate electric utility meter data acquisition hardware, software, and communication systems to collect, archive, analyze, and display whole-facility energy consumption data. At some point in the future, these systems could also be integrated with sub-meters that measure the electricity consumption of key end-use equipment. The purpose of this guidebook is to help Postal Service facility managers interpret and act upon energy data available from their EIS, translating the abundance of information these systems provide into knowledge that can be used to reduce energy use and costs. The guidebook first describes basic EIS capabilities and explains the data and reports that Postal Service EIS provide. It outlines a set of strategies for utilizing this information to improve operations and maintenance of building energy use equipment and for facilitating demand response. Finally, the guidebook offers suggestions on creating a routine for tracking and analyzing energy data and integrating this information into regular energy management activities.
Date: October 11, 2004
Creator: Foster, Dale; Hough, Ben; Barbose, Galen; Golove, William & Goldman, Charles
Partner: UNT Libraries Government Documents Department