DOCSLIB.ORG

Economic and Regulatory Challenges and Opportunities for US-Mexico Electricity Trade and Cooperation Lyndon B

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Economic and Regulatory Challenges and Opportunities for US-Mexico Electricity Trade and Cooperation Lyndon B Policy Research Project Report 174 Economic and Regulatory Challenges and Opportunities for US-Mexico Electricity Trade and Cooperation Lyndon B. Johnson School of Public Affairs Policy Research Project Report Number 174 Economic and Regulatory Challenges and Opportunities for US-Mexico Electricity Trade and Cooperation Project directed by Alejandro Ibarra-Yunez, Ph.D. A report by the Policy Research Project on Electricity Trade and US-Mexico Cooperation May 2012 The LBJ School of Public Affairs publishes a wide range of public policy issue titles. For order information and book availability call 512-471-4218 or write to: Office of Communications, Lyndon B. Johnson School of Public Affairs, The University of Texas at Austin, Box Y, Austin, TX 78713-8925. Information is also available online at www.utexas.edu/lbj/pubs/. Library of Congress Control No.: 2012940006 ISBN: 978-0-89940-792-0 ©2012 by The University of Texas at Austin All rights reserved. No part of this publication or any corresponding electronic text and/or images may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage and retrieval system, without permission in writing from the publisher. Printed in the U.S.A. Cover design by Doug Marshall LBJ School Communications Office Policy Research Project Participants Students in Alphabetical Order Nora Ankrum, B.A. (English), The University of Texas at Austin; experience in journalism and energy industry analysis Lun Dai, B.A. (English), Sichuan International Studies University; experience and interests in logistics and renewable energy Dyan Knapp B.S. (International Studies), Michigan State University; certified to operate surface ship propulsion plants, US Navy Alejandro Márquez-Márquez, B.A. (International Politics and Foreign Policy), Georgetown University Claire McEnery, B.A (Anthropology and Spanish), The University of Virginia; specialty in international development Daniel J. Noll, B.A. (Government), The University of Texas at Austin; experience in energy as research assistant at the UT Energy Institute Oscar Padilla, B.A. (Finance), The University of Texas at El Paso and Tulane University; experience in public project evaluation Marcus W. Pridgeon, B.A. (Accounting) and MSc (Ethics and Leadership), Stephen F. Austin State University; specialty in electric distribution, transmission, and generation utilities Timothy Regal, M.A. (English and Italian), The University of Texas at Austin; experience and interests in economic analysis, business climate/ issues analysis Kaye Schultz, B.A. (Economics, Psychology), The University of Virginia; interests in economic analysis to energy policy Amin Shams-Moorkani, B.S. (Industrial Engineering) and MBA, Sharif University of Technology, Tehran, Iran; experience in project management of the automotive and oil industries Michael Simpson, B.A. (History), Stanford University Bradley J. Smith, B.A. (Psychology), Texas A&M University; experience and interests in energy resources, sustainability and political economy Josef Varga, B.A. (International Studies), Texas A&M University iii Austin Woody, B.A. (Accounting, Political Science), University of California at Santa Clara; experience in project management, finance, non-profit organizations Project Director Alejandro Ibarra-Yunez, Ph.D., Professor of Economics and Public Policy and Chair, Economics of Networks and Regulations, EGADE Business School, Tecnológico de Monterrey, Campus Monterrey; Visiting Professor/Researcher, LBJ School of Public Affairs, The University of Texas at Austin (academic year 2011-2012) iv Table of Contents List of Tables.................................................................................................................vii List of Figures ................................................................................................................ ix List of Acronyms ............................................................................................................ xi Foreword ....................................................................................................................... xv Acknowledgments ....................................................................................................... xvii Chapter 1. Introduction: Setting the Stage for International Electricity Integration ........... 1 Chapter 2. The Structure of Utilities and Non-Utilities in North America, and Regional Players ........................................................................................................................... 23 Chapter 3. Electricity Demand Management and Pricing ............................................... 49 Chapter 4. Consumers and Electricity-Use Trends in the US-Mexico Border Region ..... 73 Chapter 5. The Grid, International Pools, and Exchanges ............................................. 115 Chapter 6. Cross-Border Cooperation: Assessing Regulatory and Political Challenges to the US-Mexico Electricity Market ............................................................................... 135 Chapter 7. Energy Integration in North America: Politics and Policymaking................ 171 Chapter 8. Towards Increased Cooperation in Electricity Transmission: A Mexico- ERCOT Simulation Experiment................................................................................... 199 Chapter 9. The Green Revolution: Renewable Energy and its Future ........................... 223 Appendix A. List of People Interviewed for the Research Project ................................ 249 v vi List of Tables Table 1.1 International Reference of State-Owned Enterprises, vs. Mixed Enterprises and Private Firms in Electricity, with and without Unbundling ..................................... 10 Table 1.2 Trade in Electricity in Europe by Regional Connection: UCTE ...................... 13 Table 1.3 Trade in Electricity in Europe by Regional Connection: NORDEL................. 13 Table 1.4 Trade in Electricity in Europe by Regional Connection: CENTREL ............... 14 Table 1.5 Trade in Electricity in North America ............................................................ 14 Table 1.6 Canada’s Utilities and Transmission Points and Trade, Comparison with Mexico, 2009 ......................................................................................................... 17 Table 1.7 Similarities and Differences between ERCOT and CAISO, 2012 ................... 18 Table 2.1 Comparison of the US and Mexico Systems of the Research Project, 2010..... 35 Table 3.1 CFE Interruptible Tariffs in Comparison to ERCOT....................................... 59 Table 3.2 Mexico’s I-15 Contract Distribution by Industry and State 2010 .................... 61 Table 3.3 ERCOT Distribution of Interruptible Contracts .............................................. 63 Table 3.4 CFE I-15 Compensation by Tariff Type H-S and H-SL .................................. 65 Table 3.5 CFE I-15 Compensation by Tariff Type H-T and H-TL .................................. 65 Table 3.6 ERCOT Average Tariff Offers ....................................................................... 66 Table 3.7 Comparison of Costs for CFE and ERCOT .................................................... 68 Table 3.8 EILS cost to ERCOT ...................................................................................... 69 Table 4.1 Mexico Electric Power Foreign Trade 1997-2007 (GWh) ............................... 82 Table 4.2 California Summary Statistics ........................................................................ 89 Table 4.3 Texas Summary Statistics .............................................................................. 92 Table 4.4 Arizona Summary Statistics ........................................................................... 95 Table 4.5 New Mexico Summary Statistics .................................................................... 97 Table 6.1 Product Classification Systems ..................................................................... 147 vii Table 7.1 Different Views on Nationalization of Renewable Portfolio Standard ........... 194 Table 8.1 Comparison of US CAISO and ERCOT with Mexico’s CFE, 2010 .............. 210 Table 8.2 Mexico’s Regional Effective Installed Capacity and Demand at Non-Peak and Peak Loads .......................................................................................................... 211 Table 9.1 Current Renewable Energy Capacity in North America 2011-2012 .............. 224 viii List of Figures Figure 1.1 World net per capita Electricity Consumption and per capita GDP ................ 15 Figure 2.1 Distribution of Permits in Mexico (Number) ................................................. 27 Figure 2.2 Distribution of Permits in Mexico (in MW capacity) ..................................... 28 Figure 2.3 Distribution of Permits by Investment ........................................................... 28 Figure 2.4 Total Net Generation in GWh: California, Texas, and Mexico ...................... 36 Figure 3.1 ERCOT Nodal Market in Texas, 2011 .......................................................... 52 Figure 3.2 Mexico’s CFE Zonal Divisions, 2011 ........................................................... 53 Figure 3.3 Number of QSE Participants ......................................................................... 62 Figure 3.4 2011 I-15 Interruptible Load ......................................................................... 63 Figure 3.5
Load more

Recommended publications
  • Assessment of Solar Thermal Power Generation Potential in India.Pdf
    Renewable and Sustainable Energy Reviews 42 (2015) 902–912 Contents lists available at ScienceDirect Renewable and Sustainable Energy Reviews journal homepage: www.elsevier.com/locate/rser Assessment of solar thermal power generation potential in India Chandan Sharma, Ashish K. Sharma, Subhash C. Mullick, Tara C. Kandpal n Centre for Energy Studies, Indian Institute of Technology Delhi, Hauz Khas, New Delhi 110016, India article info abstract Article history: Realistic assessment of utilization potential of solar energy for thermal power generation and identification of Received 12 July 2014 niche areas/locations for this purpose is critically important for designing and implementing appropriate Received in revised form policies and promotional measures. This paper presents the results of a detailed analysis undertaken for 9 September 2014 estimating the potential of solar thermal power generation in India. A comprehensive framework is developed Accepted 20 October 2014 that takes into account (i) the availability of wastelands (ii) Direct Normal Irradiance (DNI) (iii) wastelands that are habitat to endangered species and/or tribal population and/or that is prone to earthquakes and (iv) Keywords: suitability of wasteland for wind power generation. Finally, using an approach developed for the allocation of Solar thermal power generation wastelands suitable for solar power generation between thermal and photovoltaic routes, the potential of solar Concentrated Solar Power thermal power generation is assessed for two threshold values of DNI – 1800 kW h/m2 and 2000 kW h/m2. Potential Estimation for India With all the wastelands having wind speeds of 4 m/s or more allocated for wind power generation, the estimated potential for solar thermal power generation is 756 GW for a threshold DNI value of 1800 kW h/m2 and 229 GW for a threshold DNI value of 2000 kW h/m2.
    [Show full text]
  • Advanced Transmission Technologies
    Advanced Transmission Technologies December 2020 United States Department of Energy Washington, DC 20585 Executive Summary The high-voltage transmission electric grid is a complex, interconnected, and interdependent system that is responsible for providing safe, reliable, and cost-effective electricity to customers. In the United States, the transmission system is comprised of three distinct power grids, or “interconnections”: the Eastern Interconnection, the Western Interconnection, and a smaller grid containing most of Texas. The three systems have weak ties between them to act as power transfers, but they largely rely on independent systems to remain stable and reliable. Along with aged assets, primarily from the 1960s and 1970s, the electric power system is evolving, from consisting of predominantly reliable, dependable, and variable-output generation sources (e.g., coal, natural gas, and hydroelectric) to increasing percentages of climate- and weather- dependent intermittent power generation sources (e.g., wind and solar). All of these generation sources rely heavily on high-voltage transmission lines, substations, and the distribution grid to bring electric power to the customers. The original vertically-integrated system design was simple, following the path of generation to transmission to distribution to customer. The centralized control paradigm in which generation is dispatched to serve variable customer demands is being challenged with greater deployment of distributed energy resources (at both the transmission and distribution level), which may not follow the traditional path mentioned above. This means an electricity customer today could be a generation source tomorrow if wind or solar assets were on their privately-owned property. The fact that customers can now be power sources means that they do not have to wholly rely on their utility to serve their needs and they could sell power back to the utility.
    [Show full text]
  • 2020 State of Reliability an Assessment of 2019 Bulk Power System Performance
    2020 State of Reliability An Assessment of 2019 Bulk Power System Performance July 2020 Table of Contents Preface ........................................................................................................................................................................... iv About This Report ........................................................................................................................................................... v Development Process .................................................................................................................................................. v Primary Data Sources .................................................................................................................................................. v Impacts of COVID-19 Pandemic .................................................................................................................................. v Reading this Report .................................................................................................................................................... vi Executive Summary ...................................................................................................................................................... viii Key Findings ................................................................................................................................................................ ix Recommendations......................................................................................................................................................
    [Show full text]
  • Small Vulnerable Sets Determine Large Network Cascades in Power Grids
    Article Summary — followed by the full article on p. 4 Small vulnerable sets determine large network cascades in power grids Yang Yang,1 Takashi Nishikawa,1;2;∗ Adilson E. Motter1;2 Science 358, eaan3184 (2017), DOI: 10.1126/science.aan3184 Animated summary: http://youtu.be/c9n0vQuS2O4 1Department of Physics and Astronomy, Northwestern University, Evanston, IL 60208, USA 2Northwestern Institute on Complex Systems, Northwestern University, Evanston, IL 60208, USA ∗Corresponding author. E-mail: [email protected] Cascading failures in power grids are inherently network processes, inwhich an initially small perturbation leads to a sequence of failures that spread through the connections between sys- tem components. An unresolved problem in preventing major blackouts has been to distinguish disturbances that cause large cascades from seemingly identical ones that have only mild ef- fects. Modeling and analyzing such processes are challenging when the system is large and its operating condition varies widely across different years, seasons, and power demand levels. Multicondition analysis of cascade vulnerability is needed to answer several key questions: Un- der what conditions would an initial disturbance remain localized rather than cascade through the network? Which network components are most vulnerable to failures across various con- ditions? What is the role of the network structure in determining component vulnerability and cascade sizes? To address these questions and differentiate cascading-causing disturbances, we formulated an electrical-circuit network representation of the U.S.-South Canada power grid—a large-scale network with more than 100,000 transmission lines—for a wide range of operating conditions. We simulated cascades in this system by means of a dynamical model that accounts arXiv:1804.06432v1 [physics.soc-ph] 17 Apr 2018 for transmission line failures due to overloads and the resulting power flow reconfigurations.
    [Show full text]
  • How Much Building Renewable Energy Is Enough? the Vertical City Weather Generator (VCWG V1.4.4)
    atmosphere Article How Much Building Renewable Energy Is Enough? The Vertical City Weather Generator (VCWG v1.4.4) Amir A. Aliabadi 1,* , Mohsen Moradi 1 , Rachel M. McLeod 1 , David Calder 2 and Robert Dernovsek 2 1 School of Engineering, University of Guelph, Guelph, ON N1G 2W1, Canada; [email protected] (M.M.); [email protected] (R.M.M.) 2 Blue Valley Building Corp., 76 Dawson Rd., Guelph, ON N1H 1A8, Canada; [email protected] (D.C.); [email protected] (R.D.) * Correspondence: [email protected] Abstract: A challenge in the integration of renewable and alternative energy systems for buildings is the determination of the renewable energy ratio, which involves the selection and sizing of appropriate building systems. To address this need, a micro climate-weather software titled the Vertical City Weather Generator (VCWG) is further developed to include renewable and alternative energy systems and account for full two-way interaction between the building system and outdoor environment. VCWG is forced to simulate performance of a residential building in Guelph, Canada, for an entire year in 2015. Various energy options are considered and further optimized for the building to reduce natural gas consumption, electricity consumption, and cost. On an annual basis using the global cost method, and compared to a building with no such renewable or alternative energy systems, the optimized system resulted in 80.3% savings in natural gas consumption, 73.4% savings in electricity consumption, and 3% savings is annualized cost. According to this analysis, some technologies, such as photovoltaics are more favorable in the Canadian climate than other Citation: Aliabadi, A.A.; Moradi, M.; technologies.
    [Show full text]
  • Historical and Future Changes to Energy Systems – Update
    UPDATE Permission to Reproduce Materials may be reproduced for personal, educational and/or non-profit activities, in part or in whole and by any means, without charge or further permission from the National Energy Board, provided that due diligence is exercised in ensuring the accuracy of the information reproduced; that the National Energy Board is identified as the source institution; and that the reproduction is not represented as an official version of the information reproduced, nor as having been made in affiliation with, or with the endorsement of the National Energy Board. If a party wishes to rely on material from this report in any regulatory proceeding before the NEB, it may submit the material, just as it may submit any public document. Under these circumstances, the submitting party in effect adopts the material and that party could be required to answer questions pertaining to the material. This report does not provide an indication about whether any application will be approved or not. The Board will decide on specific applications based on the material in evidence before it at that time. For permission to reproduce the information in this publication for commercial redistribution, please e-mail: [email protected] Autorisation de reproduction Le contenu de cette publication peut être reproduit à des fins personnelles, éducatives et(ou) sans but lucratif, en tout ou en partie et par quelque moyen que ce soit, sans frais et sans autre permission de l’Office national de l’énergie, pourvu qu’une diligence raisonnable soit exercée afin d’assurer l’exactitude de l’information reproduite, que l’Office national de l’énergie soit mentionné comme organisme source et que la reproduction ne soit présentée ni comme une version officielle ni comme une copie ayant été faite en collaboration avec l’Office national de l’énergie ou avec son consentement.
    [Show full text]
  • Eastern Interconnection
    1/31/2020 Eastern Interconnection - Wikipedia Eastern Interconnection The Eastern Interconnection is one of the two major alternating-current (AC) electrical grids in the continental U.S. power transmission grid. The other major interconnection is the Western Interconnection. The three minor interconnections are the Quebec, Alaska, and Texas interconnections. All of the electric utilities in the Eastern Interconnection are electrically tied together during normal system conditions and operate at a synchronized frequency at an average of 60 Hz. The Eastern Interconnection reaches from Central Canada The two major and three minor NERC eastward to the Atlantic coast (excluding Quebec), interconnections, and the nine NERC Regional south to Florida, and back west to the foot of the Reliability Councils. Rockies (excluding most of Texas). Interconnections can be tied to each other via high-voltage direct current power transmission lines (DC ties), or with variable-frequency transformers (VFTs), which permit a controlled flow of energy while also functionally isolating the independent AC frequencies of each side. The Eastern Interconnection is tied to the Western Interconnection with six DC ties, to the Texas Interconnection with two DC ties, and to the Quebec Interconnection with four DC ties and a VFT. The electric power transmission grid of the contiguous United States consists of In 2016, National Renewable Energy Laboratory simulated a 120,000 miles (190,000 km) of lines year with 30% renewable energy (wind and solar power) in 5- operated
    [Show full text]
  • The Impact of a Cost Rebate on the Economics of Solar Power in Canada by Hillary Macdougall Supervised by Dr. David Wright Major
    The Impact of a Cost Rebate on the Economics of Solar Power in Canada By Hillary MacDougall Supervised By Dr. David Wright Major Research Paper in Partial Fulfillment of the Requirements for the Degree of Master of Science (MSc.) in Environmental Sustainability Institute of the Environment University of Ottawa © Hillary MacDougall, Ottawa, Canada, 2016 Table of Contents 1. Abstract 3 2. Introduction 4 3. Literature Review 7 4. Methodology 17 5. Results 24 5.1. Internal Rate of Return Results 24 5.2. Mapping the Internal Rate of Return 39 5.3. Net Present Value Results 45 5.4. Sensitivity Analysis Results 55 6. Discussion 61 7. Conclusion 65 8. Appendix A: Sample calculations 67 9. Appendix B: All IRR and NPV graphs 70 10. Appendix C: IRR contour maps 115 11. Bibliography 122 2 1. Abstract Incentives have been implemented in countries like Canada, the United States of America, and China, among others, to stimulate the deployment of solar power. Electricity from solar energy is one source of renewable energy that can reduce greenhouse gas emissions. Achieving a widespread adoption of solar projects depends on both the current subsidy for solar power and determining the ideal geographic location for solar insolation. This paper analyzes the impact of various systems cost incentives on the economics of residential solar projects in Western Canada. Eighteen cities across three provinces were analyzed for both photovoltaic and concentrated photovoltaic projects with start dates of 2016, 2018, and 2020. Additionally, this research looked at the impact of optimizing a PV system and how this impacts generated revenue.
    [Show full text]
  • FERC Issues Report on Frequency Control Requirements for Reliable
    LBNL-2001103 Frequency Control Requirements for Reliable Interconnection Frequency Response Authors: Joseph H. Eto,1 John Undrill,2 Ciaran Roberts,1 Peter Mackin,3 and Jeffrey Ellis3 1 Lawrence Berkeley National Laboratory 2 John Undrill, LLC. 3 Utility Systems Efficiencies, Inc. Energy Analysis and Environmental Impacts Division Lawrence Berkeley National Laboratory February 2018 This work was supported by the Federal Energy Regulatory Commission, Office of Electric Reliability, under interagency Agreement #FERC-16-I-0105, and in accordance with the terms of Lawrence Berkeley National Laboratory’ Contract No. DE-AC02-05CH11231 with the U.S. Department of Energy. Disclaimer This document was prepared as an account of work sponsored by the United States Government. While this document is believed to contain correct information, neither the United States Government nor any agency thereof, nor The Regents of the University of California, nor any of their employees, makes any warranty, express or implied, or assumes any legal responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by its trade name, trademark, manufacturer, or otherwise, does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof, or The Regents of the University of California. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof, or The Regents of the University of California. Ernest Orlando Lawrence Berkeley National Laboratory is an equal opportunity employer.
    [Show full text]
  • 2014 Summer Reliability Assessment
    2014 Summer Reliability Assessment May 2014 NERC | Summer Reliability Assessment | 2013 i of 45 Preface NERC is an international regulatory authority established to evaluate and improve the reliability of the bulk power system (BPS) in North America. NERC develops and enforces Reliability Standards; annually assesses seasonal and long-term (10- year) reliability; monitors the BPS through system awareness; and educates, trains, and certifies industry personnel. NERC is the electric reliability organization (ERO) for North America, subject to oversight by the U.S. Federal Energy Regulatory Commission (FERC) and governmental authorities in Canada.1 NERC Reliability Standards are the planning and operating rules that electric utilities follow to support and maintain a reliable electric system. These standards are developed by industry using a balanced, open, fair, and inclusive process accredited by the American National Standards Institute (ANSI). While NERC does not have authority to set Reliability Standards for resource adequacy (e.g., reserve margin criteria) or to order the construction of resources or transmission, NERC can independently assess where reliability issues may arise and identify emerging risks. This information, along with NERC recommendations, is then available to policy makers and federal, state, and provincial regulators to support decision making within the electricity sector. NERC prepared the following assessment in accordance with the Energy Policy Act of 2005, in which the U.S. Congress directed NERC to conduct
    [Show full text]
  • Residential Solar PV Standard
    University of Calgary PRISM: University of Calgary's Digital Repository Graduate Studies Graduate Capstones 2019-08-19 Residential Solar PV Standard McGoey, Thomas http://hdl.handle.net/1880/111115 report University of Calgary graduate students retain copyright ownership and moral rights for their thesis. You may use this material in any way that is permitted by the Copyright Act or through licensing that has been assigned to the document. For uses that are not allowable under copyright legislation or licensing, you are required to seek permission. Downloaded from PRISM: https://prism.ucalgary.ca UNIVERSITY OF CALGARY Residential Solar PV Standard in Alberta by Thomas McGoey A RESEARCH PROJECT SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE GRADUATE PROGRAM IN SUSTAINABLE ENERGY DEVELOPMENT CALGARY, ALBERTA AUGUST, 2019 © Thomas McGoey 2019 Abstract Alberta is one of Canada’s most attractive jurisdictions for solar PV deployment because of the resource availability. Alberta’s recent regulatory environment, which included attractive incentives that encouraged residential solar PV deployment and installation, resulted in tremendous growth in solar PV systems (1 MW in 2009 to 45 MW in 2017). This paper examines whether a residential solar PV standard in Alberta should be implemented, and what role a standard could play in increasing uptake and deployment of solar PV systems. The research includes an examination of minimum accreditation required for residential installations, the impact of having consistent regulatory approaches throughout the province, and what incentive policies could result in sustained residential solar PV development. Through reviewing policies and approaches used in other jurisdictions, this project aims to provide recommendations for a regulatory environment in Alberta which does not introduce additional barriers for consumers and installers and improves the industry’s reputation.
    [Show full text]
  • 2015 Summer Reliability Assessment
    2015 Summer Reliability Assessment May 2015 NERCNERC | 20152015 Summer ReliabilitReliabilityy ReReportport | MMayay 20201501515 I Table of Contents Preface ....................................................................................................................................................................... iii Assessment Development ......................................................................................................................................... iv Executive Summary ....................................................................................................................................................1 Key Finding #1: ........................................................................................................................................................2 Key Finding #2: ........................................................................................................................................................5 Key Finding #3: ........................................................................................................................................................8 Key Finding #4: ..................................................................................................................................................... 10 Operational Risk Assessment: Pilot Analysis ....................................................................................................... 11 FRCC ........................................................................................................................................................................
    [Show full text]