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U.S. Energy Ecosystem: Entering a New Era?

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Broadband Networks, Smart Grids and Climate Change

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Abstract

The idea that the physical infrastructure used to generate, transmit, and distribute electricity to the sockets and outlets in the walls of homes and business throughout the U.S. needs a digital transformation and two-way communications in order to improve its efficiency, and reliability has been near the top of the country’s energy policy agenda for several years. Grid modernization is needed to address a range of issues, from how to forestall another blackout similar to what occurred in the Northeastern U.S. in 2003 to how to accommodate the increasing amounts of wind and solar power that are coming onto the grid. The vision of deploying a “smart grid” is the driving idea behind Title XIII of the Energy Independence and Security Act of 2007, for instance.

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Notes

  1. 1.

    See Title XIII of the Energy Independence and Security Act of 2007.

  2. 2.

    Demand Response Compensation in Organized Wholesale Energy Markets, Docket No. RM10-17-000; Order No. 745, U.S. Federal Energy Regulatory Commission, Issued 15 Mar 2011. http://www.ferc.gov/EventCalendar/Files/20110315105757-RM10-17-000.pdf.

  3. 3.

    The Economic Growth Engine: How Energy and Work Drive Material Prosperity (Edward Elgar Publishing; 2009), Robert U. Ayres and Benjamin War.

  4. 4.

    Annual Energy Outlook 2011 with Projections to 2035, U.S. Department of Energy: Energy Information Administration, Apr 2011. http://www.eia.gov/forecasts/aeo/pdf/0383(2011).pdf.

  5. 5.

    Commodity Markets Outlook and Strategy, Global Commodities Research, J.P. Morgan, 1 Aug 2011.

  6. 6.

    The Link Between Energy Efficiency, Useful Work and a Robust Economy, John Laitner, American Council for an Energy-Efficient Economy, Working Paper, Sept 2011.

  7. 7.

    Small-Scale Cogeneration Handbook, 4th Edition, Bernard R. Kolanowski (Fairmont Press; 2011), pp 5–6. Relates how the impetus for PURPA started with the struggles of a neighborhood in the Bronx section of New York City, circa 1975, to sell back to Consolidated Edison of NY excess electricity generated by a neighborhood windmill.

  8. 8.

    The Long-Term Energy Efficiency Potential: What the Evidence Suggests, John Laitner, Steve Nadel, Neal Elliot, Harvey Sachs and Siddiq Khan, American Council for an Energy-Efficient Economy, Jan 2012, Report No. E121.

  9. 9.

    http://en.wikipedia.org/wiki/Jevons_paradox.

  10. 10.

    The Take-Back Effect-Fact or Fiction?, S. Nadel, 1993, American Council for an Energy-Efficient Economy (ACEEE); Rebound, Technology and People: Mitigating the Rebound Effect with Energy-Resource Management and People-Centered Initiatives, Karen Ehrhardt-Martinez, University of Colorado; John A. “Skip” Laitner, Aug 2010, ACEEE.

  11. 11.

    The Size of the U.S. Energy Efficiency Market: Generating a More Complete Picture, Karen Ehrhardt-Martinez and John A. “Skip” Laitner, May 2008, Report No. E083, ACEEE.

  12. 12.

    Ibid.

  13. 13.

    See: Energy Efficiency Resource Standards (EERS): An Overview, Jeff Brown, EPA—State Climate and Energy Program Technical Forum—19 Jan 2010. http://epa.gov/statelocalclimate/documents/pdf/brown_presentation_1-19-2010.pdf.

  14. 14.

    Smartpower: Climate Change, the Smart Grid, and the Future of Electric Utilities, Peter Fox-Penner (Island Press; 2010), p 2.

  15. 15.

    See: http://www.energyvortex.com—“Regulatory bodies usually require producers and transmission facilities to maintain a constant reserve margin or capacity of 10-20% of normal capacity as insurance against … sudden increases in energy demand.” Note: EnergyVortex is an open industry energy site designed to serve as a B2B community and e-commerce center.

  16. 16.

    The Future of the Electric Grid: An Interdisciplinary MIT Study, Massachusetts Institute of Technology, 2011. http://web.mit.edu/mitei/research/studies/documents/electric-grid-2011/Electric_Grid_Full_Report.pdf.

  17. 17.

    The Failure of Electricity Deregulation: History, Status and Needed Reforms, Tyson Slocum, Director—Public Citizen’s Energy Program, Mar 2007, p 5.

  18. 18.

    Ibid, p 5.

  19. 19.

    A Market-Based Model for ISO-Sponsored Demand Response Programs, Vernon Smith and Lynne Kiesling, Center for the Advancement of Energy Markets and Distributed Energy Financial Corp., Aug 2005.

  20. 20.

    The Electric City: Energy and Growth of the Chicago Area, 1880–1930, Harold L. Platt (University of Chicago Press; 1991), pp 88–89.

  21. 21.

    Ahmad Faruqui, Ph.D. “Dynamic Pricing: The Top 10 Myths.” The Brattle Group, 7 Apr 2011. The full report can be downloaded from http://www.brattle.com/_documents/UploadLibrary/Upload936.pdf.

  22. 22.

    California Statewide Pricing Pilot (SPP). Pacific Gas & Electric (PG&E), Southern California Edison (SCE) and San Diego Gas & Electric (SDG&E), “Impact Evaluation of the California Statewide Pricing Pilot.” Charles River Associates (2005). The full report can be downloaded from http://sites.energetics.com/madri/toolbox/pdfs/pricing/cra_2005_impact_eval_ca_pricing_pilot.pdf.

  23. 23.

    Baltimore Gas & Electric Company’s Smart Energy Pricing Pilot. Baltimore Gas & Electric Company. “BGE’s Smart Energy Pricing Pilot Summer 2008 Impact Evaluation” The Brattle Group (2009). The full report can be downloaded from http://www.brattle.com/_documents/uploadlibrary/upload768.pdf.

  24. 24.

    Smart Meter Pilot Project, Inc. (SMPPI), Pepco, “PowerCentsDC™ Program Final Report.” eMeter Strategic Consulting (2010). The full report can be downloaded from http://www.powercentsdc.org/ESC%2010-09-08%20PCDC%20Final%20Report%20-%20FINAL.pdf.

  25. 25.

    “Dynamic Pricing Alert: Best Practices Courtesy of  Two PUC Chairmen,” Phil Carson, Intelligent Utility, 17 Mar 2011. http://www.intelligentutility.com/article/11/03/dynamic-pricing-alert.

  26. 26.

    FERC Order 719: http://www.ferc.gov/whats-new/comm-meet/2008/101608/E-1.pdf.

  27. 27.

    See: Energy Policy Act of 2005. Section 1815 calls for a study of wholesale and retail competition for electricity.

  28. 28.

    Op Cit, FERC Order 745.

  29. 29.

    The term “negawatt” was coined by Amory Lovins during his keynote address at the Green Energy Conference in Montreal, in 1989. See: “The Negawatt Revolution: Solving the CO2 Problem.” http://www.ccnr.org/amory.html.

  30. 30.

    Assessment of Demand Response and Advanced Metering; Sixth Annual Report Pursuant to Energy Policy Act of 2005, Section 1252(e)(3), FERC Staff Report, Nov 2011. http://www.ferc.gov/legal/staff-reports/11-07-11-demand-response.pdf.

  31. 31.

    “Energy Power Supply Association Seeks Federal Court Review of FERC’s Demand Response Final Rules,” EPSA News Release, 23 Dec 2011.

  32. 32.

    EEI, California PUC File for Court Review of FERC DR Compensation Order, 15 Feb 2012, Restructuring Today.

  33. 33.

    See: FERC Policy on Demand Response and Order 719, Jason R. Salmi Klotz, GridInterop 2009. http://www.gridwiseac.org/pdfs/forum_papers09/klotz.pdf. Klotz recognized that FERC was developing a wholesale demand-response market that operates in parallel with retail demand-response programs. He was critical of how FERC was approaching the effort, but not necessarily of FERC’s intent.

  34. 34.

    Example provided in email by Howard Feibus, with Innoventive Power, 16 Apr 2012.

  35. 35.

    Renowned Regulatory Economist Supports Federal Energy Regulatory Commission Proposal for Demand Response Parity, 30 Aug 2011, NERA Economic Consulting news release. See: http://www.nera.com/nera-files/FERC_Reply_Comments_Kahn_08.30.10.pdf.

  36. 36.

    See for example: Whieldon, Esther, “On Order 745 proposals, SPP sent back to drawing board, ISO-NE told tweaks needed.” Inside F.E.R.C., 23 Jan 2012. Factiva. 19 Mar 2012; Whieldon, Esther, “Comments on ISOs’ demand response plans target cost allocation, measurement.” Inside F.E.R.C., 22 Aug 2011. Factiva. 19 Mar 2012; Whieldon, Esther, “Some RTOs, ISOs tweak tariffs to comply with FERC’s new demand response rule.” Inside F.E.R.C., 1 Aug 2011. Factiva. 19 Mar 2012.

  37. 37.

    See blog post by Katherine Hamilton, director of the clean energy practice at Quinn Gillespie & Associates: https://idc-insights-community.com/energy/smart-grid/ferc-order-745-and-clean-tech-really-this-is-not-b?author=khamilton6.

  38. 38.

    Smart Grid Standards and Systems Interoperability: A Precedent with OpenADR, Girish Ghatikar and Rolf Bienert, Lawrence Berkeley National Laboratory, The OpenADR Alliance, Dec 2011.

  39. 39.

    FERC does recognize that there may be instances when the laws or regulations of a relevant electric retail regulatory authority do not permit a retail customer to participate in an “Aggregated Retail Customer” Demand-Response program. See, for instance, FERC’s decision affirming Order 719, issued on 16 July 2009, after a rehearing proceeding. http://www.ferc.gov/whats-new/comm-meet/2009/071609/E-1.pdf.

  40. 40.

    http://www.nest.com/.

  41. 41.

    http://www.ecofactor.com/for_homeowners.php.

  42. 42.

    The State of Consumers and Technology Benchmark 2010, US, Sept 2010, Forrester Research, Inc.

  43. 43.

    Connected Home: Global Outlook: 2009, Parks Associates.

  44. 44.

    http://www.comverge.com/.

  45. 45.

    http://www.consert.com/.

  46. 46.

    http://www.enernoc.com/.

  47. 47.

    http://www.innoventivepower.com/.

  48. 48.

    http://viridityenergy.com/.

  49. 49.

    National Broadband Plan, Chapter. 12, p 247.

  50. 50.

    Ibid, p 247.

  51. 51.

    A Study of Utility Communications Needs: Key Factors That Impact Utility Communications Network, Utilities Telecom Council, Sept 2010.

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Authors and Affiliations

  1. Verizon, 1300 I Street N.W. Floor 400 West, Washington, DC, 20005, USA

    Lawrence D. Plumb

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Correspondence to Lawrence D. Plumb .

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Editors and Affiliations

  1. Columbia Business School, Columbia Institute for Tele-Information, Broadway 3022, New York, 10027, New York, USA

    Eli M. Noam

  2. Telecom Italia, Corso d'Italia 41, Roma, 00198, Italy

    Lorenzo Maria Pupillo

  3. Georg-August University Goettingen, Goettingen, 37075, Germany

    Johann J. Kranz

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Plumb, L.D. (2013). U.S. Energy Ecosystem: Entering a New Era?. In: Noam, E., Pupillo, L., Kranz, J. (eds) Broadband Networks, Smart Grids and Climate Change. Springer, New York, NY. https://doi.org/10.1007/978-1-4614-5266-9_11

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