CEIC-03-18: "A Current Study of Automatic Meter Reading Solutions via Power Line Communications"
Chong Hock K Goh
It is more expensive to generate electricity during peak hours, yet consumers are not paying the more expensive rate for peak-hour electricity. It will be more economically efficient if consumers pay varying prices, depending on when they use electricity, instead of the current system where an average price rate is used. Hence we need to send real-time pricing to consumers. We look at current Automatic Meter Reading (AMR) solutions via Power Line Communications (PLC). If current AMR technology allows meter readings to be sent via power lines quickly and cheaply, then sending real-time pricing via power lines is feasible. In this study, we consider 3 companies that provide AMR solutions to existing customers, and make a comparison of their AMR technologies.
CEIC-03-17: "Guidance for Drafting State Legislation to Facilitate the Growth of Independent Electric Power Micro-Grids"
Douglas King and M. Granger Morgan
A variety of small-scale electric generation technologies are now available. Many of these can operate as combined heat and electric power (CHP) systems that achieve much higher overall end-use energy efficiencies than conventional systems. In addition, solid state power electronics and advanced computer control technology make it possible to condition and control the local use of electric power, and interconnections to the distribution system, in ways that had previously not been possible.
We believe that new legislation that would permit the development of independent micro-grids should be passed in states where such systems are not now allowed, or where present laws and regulation discourage their development. It is our belief that such enabling legislation could unleash a wave of technological and business innovations similar to what occurred in telecommunications after the 1968 Carterphone Decision allowed customers to attach non-Bell devices such as phones, answering machines, fax machines, and modems to the public telephone system.
CEIC-03-16: "Market Dynamics Driven by the Decision-making of Both Power Producers and Transmission Owners"
Anna Minoia, Damien Ernst, and Marija Ilic
In this paper we consider an electricity market in which not only the power producers but also the transmission owners can submit a bid. The market is cleared at each stage by minimizing the sum of the production prices and the transmission prices. A model of the strategic behavior is formulated for the different agents of the system. This strategic behavior modelling leads to a market dynamics that can be used to determine the different payoffs of the agents over a temporal horizon. Simulations are carried out for several configurations of this two node power system. The influence of the transfer capacity and the market structure on the payoffs of the different agents is discussed.
CEIC-03-15: "Market Dynamics Driven by the Decision-making Power Producers"
Damien Ernst, Anna Minoia, and Marija Ilic
In this paper we consider a tool for analyzing the market outcomes when a set of competitive agents (power producers) interact through the market place. The market clearing mechanism is based on the location marginal price scheme. A model of the strategic behavior is formulated for the agents. Each one chooses its bid in order to maximize its profit by assuming that the other agents will post the same bid as at the previous clearing of the market, and by knowing the network characteristics. The income of each agent over a certain temporal horizon for different power system configurations (the addition of new transmission capabilities, new power plants) is evaluated by assuming a market dynamics and by integrating this dynamics over the chosen temporal horizon. The mathematical formulation, for the sake of simplicity, is related to a two node power system. In the simulations, the influence of different conditions (line transfer capacity, the number and size of generators, the presence of portfolio) on market outcomes is analyzed, and interesting and sometimes counter-intuitive results are found.
CEIC-03-14: "Maintaining Stability with Distributed Generation in a Restructured Industry"
Judith Cardell and Marija Ilic
A set of reduced order, linearized, dynamic models for distributed generators is developed along with a framework for modeling the generators in a power distribution system. Analysis of this distributed system structure raises two issues. The first is that the simulations demonstrate, unexpectedly, that a small load disturbance is capable of causing frequency instability in the primary dynamics of the distributed generators. Eigenanalysis of the instability suggests that it is a system phenomenon. The second issue is that the system matrix is found to not have a block diagonal dominant structure raisi ng questions over the possible implementation of decentralized control strategies. A method to regain system stability along with an example of implementing this method are presented, along with the generator models.
CEIC-03-13: "Temporal Hotspots in Emission Trading Programs: Evidence From The Ozone Transport Commission’s NOX Budget"
Alexander E. Farrell
The use of Market Mechanisms and Incentives (MM&I) for environmental protection has increased over the last several years, and proposals for new MM&I policies are increasing. Notable (perhaps even principal) among these proposals are cap-and-trade (C/T) systems, which as the name implies, create a permanent limit on total emissions yet provide firms with flexibility in compliance. Several concerns have been raised about the environmental and economic outcomes of C/T systems, in particular about the potential for “hot spots” and about the viability of markets in emission allowances. Environmentalists are concerned that C/T systems may allow for localized pollution problems while industry is concerned that there be a large, stable enough market in allowances so that they can count on being able to buy or sell allowances at reasonable and predictable prices (Dudek and Goffman 1992; Solomon and Rose 1992; Campbell and Holmes 1993; Chinn 1999). The results so far have been mixed on both counts, some emission trading programs have had problems with hot spots and environmental justice issues and others have not (Drury 1999; Swift 2001). Similarly, some emission allowance markets have been successful and others have not (Foster and Hahn 1995; Carlson et al. 2000; Israels et al. 2002).
This paper examines several key aspects of an early multi-state C/T system designed to control oxides of nitrogen (NOX) in nine Northeastern States, the Ozone Transport Commission’s (OTC) NOX Budget. Several earlier papers have examined the political economy of the OTC NOX Budget (Farrell 2001; Farrell and Morgan 2003). Electricity generating plants, including co-generators, dominate regulated facilities in the OTC NOX Budget (representing more than 90% of seasonal NOX emissions) and will have a key role in the upcoming NOX SIP Call, so this paper focuses on the electric power sector (U.S. Environmental Protection Agency 1998).
CEIC-03-12: "Cascading Failures: Survival vs. Prevention"
Sarosh N. Talukdar, Jay Apt, Marija Ilic, Lester B. Lave, and M. Granger Morgan
Measures can be taken to reduce the number of large-scale power losses due to failures of the generation and high voltage transmission grid such as the August 14, 2003 blackout. However, such failures cannot be eliminated. The survival of essential missions is a more tractable problem than the prevention of all large cascading failures, and its solutions are verifiable. We propose that serious attention be directed towards assuring the continuation of essential missions even after the grid has failed. We outline a program to lower the social costs of power failures through successful preservation of those essential missions.
CEIC-03-11: "Electric Gridlock: A National Solution"
Jay Apt and Lester B. Lave
Preventing future blackouts requires increasing the capacity and reliability of the transmission grid. This can be accomplished by building more lines as well as by increasing the capacity and controllability of existing lines, both requiring billions of dollars of investment. New technology, from Flexible AC Transmission System (FACTS) to improved data acquisition and control (SCADA) systems would do much to increase the operational capacity and reliability of existing lines. R&D promises still larger advances in the future, such as SMES (Superconducting magnetic energy storage), FCL (Fault-current limiter), and HTS (High-temperature superconductor) cable.
During and immediately after the blackout, political leaders stated that the blackout was unacceptable and should never happen again. This is political rhetoric that is unlikely to produce substantial government appropriations or approval of price hikes to pay for the investments. We propose a more realistic goal: The amount of loss and inconvenience from cascading failures should be no greater, averaged over a decade or so, than the loss and inconvenience due to natural hazards such as ice storms.
Present systems for paying transmission operators do not provide both proper incentives for new investment at the same time that they discourage use of the congested segments of the grid. We propose a two-part tariff. This two-part tariff would both encourage customers and generators to locate in places with low LMP, and would give investors in new transmission lines the incentive to build needed capacity.
CEIC 03-10: "Introducing Electric Power into a Multi-Disciplinary Curriculum for Network Industries"
Marija Ilic, Jay Apt, Pradeep Khosla, Lester Lave, Granger Morgan, Sarosh Talukdar
A qualitatively different graduate level curriculum for teaching electric power systems is needed. The motivation for such a new curriculum is outlined, and a specific program, now being implemented at Carnegie Mellon University, is described. The new curriculum: (1) provides students with a multidisciplinary introduction to the changing problems of the industry; (2) stresses the need for teaching systematic approaches to formulating power system problems; and, (3) integrates teaching of the fundamentals for power systems with the fundamentals for other network industries. The program, referred to as the MS in Electric Power Systems (MSEPS) Program, is being developed as a special power-focused track within Carnegie Mellon's existing multi-disciplinary Information Networking Institute (INI).
CEIC 03-08: "Risk Analysis and Project Capital Structures"
David C. Rode, Peter R. Lewis, and Paul S. Fischbeck
The problems experienced recently in the power generation sector have permeated through from project sponsors to the financial institutions that invested, whether through debt or equity, in power projects. In many cases, insufficient attention to the careful measurement and management of risks exacerbated, if not caused, these problems. Now, as financial institutions and investors face the task of restructuring these troubled assets, it is critically important to prevent history from repeating itself by ensuring that any restructuring activities not only recognize the risks facing power generating assets, but also that those risks are communicated effectively among the various stakeholders. In addition, it is important for all of the stakeholders to understand how the restructuring process itself is influenced by risk and risk-taking behavior. This paper develops a framework for using simulation analysis as a common platform from which to communicate about financing risks and capital structure.
CEIC 03-07: "Distributed Power Generation: Rural India – A Case Study"
Anshu Bharadwaj and Rahul Tongia
In this paper, we present an analysis of a rural distribution network to examine what the benefits of decentralized generation would be for meeting rural loads. We use load flow analysis to simulate the line conditions for actual rural feeders in India, and quantify the loss reduction and system improvement by having decentralized generation available. We also present a framework for valuing ancillary services from the generator, viz., reactive power. This provides a starting point for utilities in developing countries to better plan their systems to meet dispersed loads, while optimizing for renewables and other decentralized generation sources.
CEIC 03-06: "Transmission Line Siting: A Quantitative Analysis of Transmission Demand and Siting Difficulty"
Recent events, such as the California energy crisis, have focused national attention on the growing demand for electricity in the United States and the simultaneously lagging development of electricity transmission infrastructure. Although the nation’s transmission grid began as a series of local connections for regional reliability, expanding interconnects and state deregulation have gradually transformed the system into a competitive superhighway for electricity trading. In spite of recent extreme examples of the nation’s ailing grid and the widespread call for new transmission construction, transmission line siting is a difficult and time-consuming process often resulting in construction delays or cancellations of new lines. Problems with individual siting projects have been attributed primarily to public opposition, regulatory inconsistencies, geographic or topographical constraints, and lack of investment incentive; however, most of the information about siting difficulty is anecdotal and project-specific, and there is little comprehensive empirical analysis on the factors affecting transmission line siting.
This paper develops four unique measures of transmission line siting difficulty and based on these measures, presents a regression model for quantitatively evaluating the factors affecting siting at the state-level. The four measures of the dependent variable, siting difficulty, are 1) an economic measure based on variations in the marginal cost of electricity production, 2) a physical measure of the difference between proposed and actual transmission construction, 3) a geographic measure of the co-location of generation capacity and demand load centers within a state, and 4) a subjective measure from a survey of industry experts’ perceptions. Using these four measures of siting difficulty, this paper also evaluates perceived and actual siting constraints using a series of regression analyses. The results from these measures and analyses parallel documented perceptions of siting constraints and serve as quantitative counterpart to existing anecdotal information on siting. Overall, the framework that this research provides for characterizing siting difficulty and siting constraints has the potential to serve as a tool for communication between siting agencies, foster a common understanding of the siting problem, and address existing issues with inter-agency coordination. In a field dominated by uncertainty and anecdote, this paper provides a guide for characterizing the demand for transmission construction, evaluating specific siting problems, and coordinating siting solutions.
CEIC 03-05: "A Life Cycle Analysis of Electricity Generation Technologies: Health and Environmental Implications of Alternative Fuels and Technologies"
Joule Bergerson & Lester Lave
Increases in electricity demand and the retirement of old generating plants necessitate investment in new generation. Increasingly stringent environmental regulations, together with other regulatory requirements and uncertainty over future fuel prices, complicate the choice of appropriate fuels and technologies. Electricity generation, a major source of CO2, SOx, NOx, and suspended particles, also produces large quantities of solid waste, and contributes to water pollution. To make informed decisions about refurbishing old plants or investing in new ones, companies, concerned citizens, and government officials need good information about the environmental implications of each fuel and generation technology. New issues have surfaced recently, such as discharges of mercury and total greenhouse gas emissions. Since other potential issues loom, (e.g. other heavy metals), an environmental analysis must examine the life cycle of each fuel/technology, from extraction of the materials to disposal of residuals. We review studies examining the life cycle environmental implications of each fuel and technology. We focus on the coal fuel cycle since: (1) it accounts for more than half of the electricity generated in the USA, (2) historically, the coal fuel cycle has been highly damaging to the environment and to health, (3) there are huge coal reserves in the USA, China, and Russia, and (4) the fuel is inexpensive to mine and likely to be used in large quantities in the future. We begin with an examination of the methods of life cycle analysis. We then present a brief historical overview of the research studies. Finally, we review and critique the alternative methods used for life cycle analysis. Our focus is the recent studies of the health and environmental implications of each technology. The studies agree that coal mining, transport, and combustion pose the greatest health and environmental costs. Among fossil fuel fired generators, natural gas power turbines are the most benign technology. Light water nuclear reactors received a great deal of attention in the early literature, but are neglected in recent U.S. studies. The earlier studies found that the health and environmental costs of light water reactors were low, at least for the portions of the fuel cycle that were evaluated. The studies did not evaluate the disposal of spent fuel and so are incomplete. Recent advances in life cycle analysis offer a large improvement over the methods of three decades ago and should help in choosing among fuels and technologies as well as modifying designs and practices to lower the health and environmental costs.
CEIC 03-04: "Should We Transport Coal, Gas or Electricity: Cost, Efficiency & Environmental"
We examine the life cycle costs, environmental discharges, and deaths of moving coal via rail, coal-gas via pipeline, and electricity via wire from the Powder River Basin (PRB) in Wyoming to Texas. Which method has least social cost depends on how much additional investments in rail line, transmission, or pipeline infrastructure are required, as well as the amount of a carbon tax, whether underground sequestration of carbon-dioxide is allowed and works, and the level of transmission losses. All methods generate significant environmental discharges. Transporting 50 million tons of PRB coal by rail to Texas is cheapest since the infrastructure is in place; it requires 130 million gallons of diesel fuel and results in the death of 15 people. Shipping the energy via transmission lines requires additional generation and more mining. Gasifying the coal is somewhat more expensive, but has important environmental advantages compared to a pulverized coal boiler.
CEIC 03-03: "The Cost of Regulatory Uncertainty in Air Emissions for a Coal-fired Power Plant"
Dalia Patiño Echeverri
Uncertainty about the extent and timing of changes in environmental regulations for coal fired power plants makes the difficult problem of selecting a compliance strategy even harder. Capital investments made today under uncertainty can limit future compliance options or make them very expensive. In this paper, we present a method for computing the cost of operating a moderate-sized, coal-fired power plant under different conditions of future regulatory uncertainty. Using a Multi-Period Decision Model (MPDM) that captures the decisions (both capital investment and operating) that a power plant owner must make each year, the framework employs a Stochastic Optimization Model (SOM), nested in the MPDM to find the strategy that minimizes the expected net present value (ENPV) of plant operations over a fixed planning horizon. By comparing model runs under different uncertainty conditions, the cost of regulatory uncertainty can be calculated.
CEIC 03-02: "A Technical and Economic Assessment of Selexol-based CO2 Capture Technology for IGCC Power Plants"
Increasing CO2 emissions and concerns about potential climate change are arousing great interest in the technical and economic feasibility of capturing CO2 from large energy system, such as coal-based power plants. Performance and cost models of a Selexol-based CO2 absorption system for capturing CO2 from an advanced power system (Integrated Gasification Combined Cycle, IGCC) have been developed and integrated with an existing IGCC modeling framework without CO2 capture. The integrated model has been applied to study the feasibility, cost and uncertainties of carbon capture and sequestration at both greenfield and repowered IGCC plants. The analysis shows that based on commercially available technology, the cost of CO2 avoided for an IGCC power plant is half that for a conventional combustion plant with a chemical absorption process. For IGCC systems, the uncertainty associated with CO2 transport and storage has the largest impact on the cost of CO2 avoided. Under suitable conditions, IGCC repowering was shown to be an attractive option for reducing CO2 emissions from existing coal-fired plants. Compared to building greenfield IGCC plants, IGCC repowering also provides an option for introducing new power generation technology with lower risk to utilities.
CEIC 03-01: "Fossil Electricity and CO2 Sequestration: How Natural Gas Prices, Initial Conditions and Retrofits Determine the Cost of Controlling CO2 Emissions"
Timothy L. Johnson, David W. Keith
Stabilization of atmospheric greenhouse gas concentrations will require significant cuts in electric sector carbon dioxide (CO2) emissions. The ability to capture and sequester CO2 in a manner compatible with today’s fossil-fuel based power generation infrastructure offers a potentially low-cost contribution to a larger climate change mitigation strategy. The extent to which carbon capture and sequestration (CCS) technologies might lower the cost of CO2 control in competitive electric markets will depend on how they displace existing generating units in a system’s dispatch order, as well as on their competitiveness with abatement alternatives. This paper assumes a perspective intermediate to the more common macro-economic or plant-level analyses of CCS and employs an electric system dispatch model to examine how natural gas prices, sunk capital, and the availability of coal plant retrofits affect CCS economics. Despite conservative assumptions about cost, CCS units are seen to provide significant reductions in base-load CO2 emissions at a carbon price below 100 $/tC. In addition, the availability to retrofit coal plants for post-combustion CO2 capture is not seen to lower the overall cost of CO2 abatement.