PESD Associate Director Mark Thurber co-authored a new paper in The Electricity Journal on the electricity grid improvements that are needed to unlock the full potential of wind and solar energy in Africa. Donors and development agencies need to devote more attention to these missing pieces, rather than assuming that bans on fossil fuel financing alone will spur the desired transition to cleaner energy. 

The Biden administration has pledged to reduce US greenhouse gas emissions to half of 2005 levels by 2030. A large share of these reductions would have to come from the power sector, with high-emitting coal-fired power plants being obvious targets for closure. Program on Energy and Sustainable Development (PESD) Associate Director Mark Thurber spoke on NPR's Here & Now about why phasing out coal-fired generation in the US by 2030 is an achievable goal -- and how we need to take care of affected workers along the way.  Listen to the interview.

Stanford's Program on Energy and Sustainable Development (PESD) is collaborating with the California Public Utilities Commissions (CPUC) on an Impact Lab that tackles an urgent policy question: How do we make sure the lights stay on as the electricity mix climbs towards state targets of 50% renewable energy in 2026 and 60% in 2030? Wind and solar are essential zero-carbon energy sources, but they are only available when the wind blows and the sun shines. Blackouts in Northern California last August were a warning that system reliability is at risk if the state doesn't act quickly to implement policies that ensure backup generation is available when needed.

The existing regulatory instrument for ensuring long-term resource adequacy, capacity payments, is not well-adapted to a high-renewables future. Capacity payments aim to ensure enough "firm capacity" is always available to keep the lights on, but the firm capacity construct is not applicable to wind and solar, which cannot be turned on and increased at the system operator’s discretion. 

The PESD/CPUC Impact Lab has proposed an alternative resource adequacy mechanism that is robust to a world of high and solar generation: auctions of Standardized Fixed-Price Forward Contracts (SFPFCs) that ensure every megawatt-hour of energy consumed in the state is hedged through long-term financial contracts. Unlike capacity payments, the SFPFCs provide a strong financial incentive for generators to meet their commitments to supply reliable energy wherever and whenever it is needed. PESD research suggests this novel policy mechanism can provide enhanced reliability and major cost savings relative to the capacity payment approach.

The CPUC has initiated a stakeholder process to consider possible implementation of this proposal, and PESD is assisting with research, policy outreach, and development of market simulation games that will allow stakeholders to gain hands-on experience with how the SFPFC mechanism would work in a realistic electricity market.

In a virtual panel discussion November 19 hosted by MIT’s Center for Energy and Environmental Policy Research (CEEPR), PESD Director Frank Wolak joined Alex Breckel, Associate Director of Strategic Research at Energy Futures Initiative (EFI), in addressing the impacts of power sector decarbonization on grid reliability. View recording

Recent record-breaking heat waves followed by rolling blackouts in California have sparked renewed discussion about the state’s options to address future power outages. Program on Energy and Sustainable Development Director Frank Wolak spoke to Bloomberg about power market reforms as one option where California could open up its electricity to retail competition.  While pricing would better reflect grid supply and demand, it’s unlikely this option would have backing given today’s political climate.   Read more (may require subscription)