Previous discussions focused on the implementation challenges that come after and flow from the Inflation Reduction Act (IRA). The murky picture of a few months ago has been changing with expanded analysis of just what the Act entails and how, and how long, raising as many questions as it has provided answers. Recent news suggests that the scope could be much larger. The Wall Street Journal reported that “a Goldman Sachs report projects its myriad green subsidies will cost $1.2 trillion—more than three times what the law’s supporters claimed.” The funnel...
Decarboning electricity requires major expansion in transmission. At the same time, transmission has been saving the day when tens of GWs of conventional plants keep failing in severe weather situations by enabling delivery of neighboring regions’ surplus power. To expand transmission at the scale needed, changes will be needed in transmission planning, investment, siting, and funding. Although incremental more traditional investments can move forward, the expectation is that renewable energy sources must expand in new locations far...
The goals for carbon emission reduction and the precipitating event of passage of the IRA lead to a focus on implementation. All elements of the electricity system and markets face new stress tests. Absent the unlikely unlimited expansion of the transmission grid, storage and demand participation, the power system will face continuing, and even growing, operational constraints. Rapid changes in system conditions will be increasingly the norm, with implied or real prices more volatile. These are early days, with system operators and market participants seeking better models and practices...
Cost of energy “crises” are nothing new. They happen periodically when prices shoot up, and the voters discover that they are on the sharp end. In the 1970s, there was an external hostile party to blame: the Arab Sheiks.
