Energy Regional
Electricity Issues| Energy
Modeling |
Output-Based
Emission Policy Key Issues The nation's electricity system, while impressive, is not sufficient for the 21st century. Today’s average generating plant was built in 1964 using technology from the 1950s. Utilities have not improved their delivered efficiency in some 50 years. With stagnant efficiency at 33 percent, we essentially burn three lumps of fuel to generate one lump of electricity. Put another way, two-thirds of the fuel burned to generate power is wasted. Electricity generators, moreover, are this nation’s largest polluters, spewing tons of mercury, sulfur dioxide, carbon dioxide, and other contaminants into America'sThe consequences of the system’s inefficiencies and stresses are staggering, if little noticed. Unreliable supplies – ranging from milli-second fluctuations that destroy electronic equipment to the summer-2003 blackout that left 50 million without power – are annually costing Americans more than $150 billion. To provide some perspective, this unreliable power adds more than a 45-percent surcharge to the cost of U.S. The U.S. Electricity innovation is particularly important for the Northeast and Midwest, which already faces relatively high power costs and relative shortages of coal, oil, or other indigenous fuels. Fortunately, however, the region has an array of strengths, including many of the world’s foremost universities and research centers, a strong investment and finance community, a tradition of entrepreneurship, and leadership on environmental issues. Relative to other sections of the country, moreover, the Northeast and Midwest have a history of cooperation and coordination on electricity. If we get electricity innovation right, this region will become the center for electricity innovation, which will make it a magnet for investment, a place where high-quality businesses want to locate.
Since northeastern and midwestern states face high electricity prices and lack abundant supplies of oil and natural gas, they need to use energy efficiently. The Northeast-Midwest Institute works on a variety of fronts to advance innovative technologies and improve the region's efficiency. It seeks to overcome policy and regulatory barriers to such technologies, including combined heat and power (CHP) and other forms of clean distributed generation. The Institute also works with states and industries on integrated approaches to manufacturing modernization that focus on both productivity and efficiency. The Institute builds coalitions/bridges among stakeholders to achieve common goals of energy security, energy reliability, increased productivity, and a cleaner environment. The staff works with government, including the Department of Energy and Environmental Protection Agency, as well as power companies, manufacturers, regulators, and other non-profits. Increasing security, reliability, and resilience of the energy infrastructure will capture the following benefits:
Click here for the Department of Energy's Energy Assurance Daily. Environmental
Quality The Northeast-Midwest Institute focuses on energy efficiency as a strong economic, energy and environmental benefit to our region. The region long has been home to base manufacturing (chemical, manufacturing, steel, metal casting, etc.). Energy-efficient technologies for the industrial and manufacturing sectors are means to clean up, to improve productivity, and to increase local labor and tax bases. Although, industry consumes the most energy of any sector within the U.S. economy, policymakers pay little attention to increasing the efficiency of manufacturers. In response, Institute staff have advanced integrated approaches to manufacturing modernization through working with industries, inventors, and vendors on clean, innovative technologies. Having few energy resources, the Northeast-Midwest Institute and Coalitions long have advanced technologies and practices that enable the region's residences and businesses to use energy efficiently.
The Federal Energy Regulatory Commission (FERC) is responsible for structuring a competitive wholesale electricity market. As part of it efforts to advance competition, FERC has been encouraging electricity coordination and the establishment of regional transmission organizations (RTOs). The independent RTOs, which have been established in the Northeast and Midwest, determine how to best allocate electricity within their regions and would govern interstate transmission. More Electricity Resources
The Northeast-Midwest Institute is highlighting how improvements to energy models can better inform policy analysis and discussions. Through peer-reviewed articles and meetings, the Institute engages policy analysts and policymakers, as well as economists, in discussions about how energy modeling can better highlight opportunities for policy innovations. Policymakers need quality models if they are to effectively grapple with energy security, air pollution, and an array of related issues. They must address these critical topics while appreciating the complex interactions among them. They need to better understand how energy markets are likely to respond to policy changes. Unfortunately, current models tend to support the status quo. They assume that existing market arrangements are functioning effectively, that resources are efficiently employed. They often focus only on prices, failing to account for the security, reliability, and environmental implications of energy options. They usually do not appreciate the range of possible outcomes that could result from policy innovations. Most modelers also fail to recognize the potential for technological progress, and they don't sufficiently understand the reactions of individuals and organizations to policy and market changes. Moreover, most models do not take advantage of the enormous advances in computer capacity that would allow for more sophisticated calculations. Modelers, appropriately, are cautious. They adjust their assumptions and approaches only when the evidence for change is overwhelming. Economists advocating reform, as a result, have made progress, but only on the margins. Not sufficiently involved in those discussions, ironically, are the very policymakers and policy analysts who rely on models to inform discussions and debates. Those key players have numerous needs that modelers are not addressing effectively. Policymakers, for instance, want to know the potential market penetration of distributed electricity generators under current and revised national environmental and energy policies. They desire to understand how output-based standards would alter air pollution from power plants. They want to appreciate how net metering and other policy innovations would affect the decisions of individuals and organizational consumers. The Northeast-Midwest Institute is helping policy analysts and policymakers clarify the questions and assumptions that they need models to address. The Institute is sparking discussions among key players and economists over how modelers can provide improved information and data that better informs energy policy debates. The Institute also tries to highlight the shortcomings of existing models and to have policymakers suggest improvements that would meet their needs and clarify the opportunities for policy innovations.
Northeast-Midwest
Congressional Coalitions Focus on Energy Working
with the Congressional Coalitions The Institute staff informs and educates members on the potential remedies to energy problems. The Coalitions and Institute have led efforts to support work by the Offices of Industrial Technologies and Distributed Resources within the Department of Energy, the Manufacturing Extension Partnership within the Department of Commerce, and other federal programs that advance clean onsite power, electric reliability, industrial modernization and efficiency. Distributed
Energy Resources (DER) The Institute back in 2001 was part of an innovative Power Park project in Chicago, IL. Staff have been working with the DOE and the EPA on efforts that merge brownfield development with distributed energy production, such as CHP for mutual benefit. NEMW also has worked on clean energy for brownfield sites in the Northeast-Midwest region under a cooperative agreement with EPA. Brownfields often are found in power-constrained locations where access to a reliable energy source can be an additional limitation to development. Distributed energy production can create a more attractive development opportunity for a brownfield site. It can produce significant environmental gains and reliable power, while further encouraging economic growth in our industrially-based cities and states. In 1998, the Institute helped form the U.S. Combined Heat and Power Association (USCHPA). Institute staff are active in further deploying combined heat and power (CHP) and other innovative energy technologies. The Institute works closely with the Congressional Coalitions, manufacturers, the EPA's Combined Heat and Power Partnership, and other stakeholders to promote the benefits of CHP and clean distributed generation.
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