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Discussion of “Is Realtime Pricing Green?”

Discussion of “Is Realtime Pricing Green?”. Benjamin F. Hobbs Yihsu Chen Dept. Geography & Environmental Engineering Whiting School of Engineering The Johns Hopkins University POWER Conference, 14 March 2003. Cap & Trade Regulation of Pollution Implies ….

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Discussion of “Is Realtime Pricing Green?”

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  1. Discussion of“Is Realtime Pricing Green?” Benjamin F. Hobbs Yihsu Chen Dept. Geography & Environmental Engineering Whiting School of Engineering The Johns Hopkins University POWER Conference, 14 March 2003

  2. Cap & Trade Regulation of Pollution Implies … • Local regulations do not change emissions & may worsen impacts

  3. Cap & Trade Regulation of Pollution Implies … • Local regulations do not change emissions & may worsen impacts • “New Source Review” increases cost with no environmental benefit

  4. Cap & Trade Regulation of Pollution Implies … • Local regulations do not change emissions & may worsen impacts • “New Source Review” increases cost with no environmental benefit • Net emissions impact of load changes = 0

  5. PJM Simulation: Summer 2000 MW 8760 hr 8760 hr 8760 hr

  6. PJM Simulation: Summer 2000 } MW Peak (Gas, Oil) } Cycling (Coal) } Base (Coal) } } Base (Nucl) 8760 hr 8760 hr 8760 hr

  7. PJM Simulation: Summer 2000 } MW • 5% peak reduction/ 1.7% shift in energy Peak (Gas, Oil) } Cycling (Coal) } Base (Coal) } } Base (Nucl) 8760 hr 8760 hr 8760 hr

  8. PJM Simulation: Summer 2000 } MW • 5% peak reduction/ 1.7% shift in energy • No NOx cap: • $33.9/MWh saved • +0.57% CO2 • +0.61% NOx Peak (Gas, Oil) } Cycling (Coal) } Base (Coal) } } Base (Nucl) 8760 hr 8760 hr 8760 hr

  9. PJM Simulation: Summer 2000 } MW • 5% peak reduction/ 1.7% shift in energy • No NOx cap: • $33.9/MWh saved • +0.57% CO2 • +0.61% NOx • (Partial) NOx cap: • $27.6/MWh saved • -0.26% CO2 • -0.77% NOx Peak (Gas, Oil) } Cycling (Coal) } Base (Coal) } } Base (Nucl) 8760 hr 8760 hr 8760 hr

  10. PJM Simulation: Summer 2000 } MW • 5% peak reduction/ 1.7% shift in energy • No NOx cap: • $33.9/MWh saved • +0.57% CO2 • +0.61% NOx • (Partial) NOx cap: • $27.6/MWh saved • -0.26% CO2 • -0.77% NOx • Emission reductions worth ~10% of $ savings Peak (Gas, Oil) } Cycling (Coal) } Base (Coal) } } Base (Nucl) 8760 hr 8760 hr 8760 hr

  11. Real-Time Pricing May be Green… But Performance-Based Environmental Regulation is Better • General principle: If environmental quality is goal, more efficient to directly limit emissions (output) than to try to influence choices of technology, fuel, … (inputs)

  12. Real-Time Pricing May be Green… But Performance-Based Environmental Regulation is Better • General principle: If environmental quality is goal, more efficient to directly limit emissions (output) than to try to influence choices of technology, fuel, … (inputs) • Renewable portfolio standards are inefficient (if emissions is only goal)

  13. Real-Time Pricing May be Green… But Performance-Based Environmental Regulation is Better • General principle: If environmental quality is goal, more efficient to directly limit emissions (output) than to try to influence choices of technology, fuel, … (inputs) • Renewable portfolio standards are inefficient (if emissions is only goal) • So too is demand-side management—unless retail market is broken

  14. Real-Time Pricing May be Green… But Performance-Based Environmental Regulation is Better • General principle: If environmental quality is goal, more efficient to directly limit emissions (output) than to try to influence choices of technology, fuel, … (inputs) • Renewable portfolio standards are inefficient (if emissions is only goal) • So too is demand-side management—unless retail market is broken • Real-time pricing principle should be applied as well to emissions (NOx in SF Bay region: C. Marnay, LBL)

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