By Elizabeth Sturcken

At a time when leadership from the federal government is decidedly lacking, today’s launch of Walmart’s Project Gigaton is a cause for celebration. It is proof that companies can step up to advance solutions that will help business, people and nature thrive.

Just like Walmart itself, this is big.

The world’s largest retailer has launched an initiative to remove 1 gigaton (that’s 1 billion tons — billion with a “b”) of greenhouse gas emissions (GHG) from its supply chain by 2030. To put that in perspective, that is the equivalent of removing the annual emissions of Germany — the world’s fourth-largest economy — from the atmosphere. This audacious goal is impressive; it’s corporate America’s “moon shot,” and it shows real leadership.

Why? Because, according to The Sustainability Consortium, the modern supply chain is responsible for 60 percent of all greenhouse gas emissions, 80 percent of all water use and 66 percent of all tropical deforestation. And with the global population projected to swell to 9.5 billion consumers by 2050, it is clear there is not just a crucial opportunity for businesses to meet growing global demand, there is also a real need to protect the planet. Embracing sustainable practices is no longer an option for business. It is an imperative. The planet needs fast action at a massive scale.

So do forward-looking CEOs. Shareholders are rewarding resiliency when companies climate-proof their global operations. And customers, especially millennials, expect sustainability to be baked into the things they buy. In short, business is looking to drive bottom-line value, including growth, with sustainability.

Elizabeth Sturcken, Managing Director, EDF+Business

Which explains the significant Project Gigaton commitments being made by companies like Unilever (20 million metric tons of GHG reduction) and Land O’ Lakes (20 million acres sustainably farmed) and commitments made in the past six months by Apple, Amazon, Google, PepsiCo, Smithfield Foods and others.

Execution and delivery

But setting goals is just the first step. The execution and delivery must follow to complete this journey.

Which brings me back to this moon shot: Walmart cannot do this alone. Project Gigaton will take a village — in this case, the tens of thousands of companies that make up Walmart’s global supplier network — to make this goal a reality. And that’s a good thing: Eliminating GHG emissions at this scale will reverberate across entire sectors and industries. It will be the change to “business as usual” that’s long overdue.

That’s all fine and well, rhetorically. But what if you’re a CEO or CSR exec who’s facing the hard reality of “Where do I start”?

Some new research by Environmental Defense Fund starts to sketch out a roadmap to success — and illustrates the need for supply-chain partners to get on the bus. While we’re just at the beginning of a deep dive into the sustainability of the U.S. retail supply chain, our initial findings show two things:  the complexity and emission hotspots of box chain retailers and three clear, initial areas of focus:

1. The supply chain is the largest source of emissions. If there was any doubt left, put it to rest: 80 percent of retail emissions occur in the supply chain; 12 percent are associated with the use and disposal of products and 8 percent come directly from retail operations — mostly buildings and facilities.
2. Grocery is a huge hotspot and opportunity. Are you a retailer? Food company? Agricultural service provider? Farmer? Nearly half — 48 percent — of supply-chain greenhouse gas emissions come from the grocery category, which encompasses everything from fresh meat, veggies and dairy, to bakery, dry goods, beverages, snacks and frozen products. Together, these and other products emits 1.7 gigatons of GHGs (there’s that billion thing again). In other words, food production — and food waste — is definitely a place to make your numbers — and to make a difference. (Talk about low-hanging fruit!)
3. Electricity is the biggest activity that contributes to emissions. From factories to farmhouses, whether powering a business or refrigerating an item at home, using electricity is the largest activity that produces emissions for consumer packaged goods production. Think about that: by tackling electricity use, whether from conservation or renewable energy, business leaders can not only run a more efficient operation, they can also engage their customers on which products to buy and how to best use them. That’s good business.

For those who have been paying attention to these issues for decades, these big opportunities won’t come as a surprise. But they help sharpen the focus for supply-chain professionals searching to answer the question of where to put effort and investment to get the most emissions-reduction results. Scale and speed are necessary. Knowing where to focus is critical. The EDF research is in the early stages and we plan to release the full results later this year.

In the meantime, kudos to Walmart. As suppliers make commitments for Project Gigaton that will drive reductions from factories to farms to forests to fleets, it will become imperative to identify hotspots to enable the largest impact. That’s exactly what drives innovation and the environmental impact we need.

The supply chain may be complicated, but the rewards are well worth it: thriving companies, thriving communities and a thriving planet.

Jump on the Project Gigaton moon shot. It’s leaving the launching pad, with or without you.

Follow Elizabeth on Twitter, @esturcken

Stay on top of the latest facts, information and resources aimed at the intersection of business and the environment. Sign up for the EDF+Business blog. [contact-form-7]

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The world's largest retailer recently announced Project Gigaton, arguably one of the most ambitious efforts to reduce climate pollution by any U.S. corporation.

By Dick Munson

By: Dick Munson, Midwest clean energy director, and Andrew Barbeau, senior clean energy consultant

“Efficiency is good.” That’s the mantra, a known truth, shared by both business executives and environmentalists, who eliminate waste to increase profits and reduce pollution.

When it comes to electricity, efficiency also has proven effective. Whereas power consumption a few decades ago was rising annually at more than 7 percent, the introduction of inexpensive and efficient lightbulbs, refrigerators, and smart heating and cooling has recently led to slight declines in energy consumption, even as the economy boomed and population increased.

Efficiency may be good and effective, but it is inherently hard to calculate. How do you prove the negative? Virtually every state has wrestled with the same questions of how and why electricity use didn’t happen. States with energy efficiency standards – requirements for local utilities to incentivize customers to reduce their energy use year after year – want to know if the investments are cost-effective. With new approaches to calculating energy efficiency, Illinois is tackling that question head on.

Questioning efficiency’s impact

Over the years, some have challenged the merits of energy efficiency programs. A particular target has been federal and state weatherization programs – public-sector investments to insulate low-income homes in order to reduce heating and cooling costs and improve quality of life for the people who live in them.  

The programs also were designed to improve the welfare of low-income residents and provide jobs in target communities.

A few studies have questioned whether these programs can be justified based on electricity cost savings alone, but this inquiry misses the bigger picture: The programs also were designed to improve the welfare of low-income residents and provide jobs in target communities.

Others have wondered whether it’s possible to measure the impact incentives have on efficiency changes. Catherine Wolfram, a director for the Economic and Analysis and Policy Group at the University of California, Berkeley’s Energy Institute at Haas School of Business, appropriately describes how measuring the impacts of energy-efficiency programs requires “disentangling which energy consumption changes can be credited to the program, and which would have happened anyway.”

So, an important question for assessing energy efficiency programs is this: Is there a system in place to separate the direct results (gains in energy efficiency) from the reductions that would have happened regardless?

Fortunately, most states with mature utility-run energy efficiency programs have been tackling this challenge for some time. State public utility commissions, which regulate utilities, typically implement the following measures:

• Hire third-party evaluators to determine whether utility-run programs create more benefits than costs (known as the Total Resource Cost test),
• Investigate the Net-to-Gross ratios for efficiency efforts, determining how much savings a utility can actually claim credit for as a result of its policy measures, and
• Utilize randomized control trials to compare the behavior of regular customers versus those that get incentives to save energy.

And improvements are on the way. As smart meter deployment spreads in states throughout the country, the new granular data presents opportunities for utilities and regulators to get an even more accurate measure of the impact of energy efficiency programs. Peering into half-hour blocks of energy use across a utility’s service territory, for example, could assure regulators that savings will be achieved. 

Is there a system in place to separate the direct results (gains in energy efficiency) from the reductions that would have happened regardless?

To take efficiency to the next level, it’s essential that regulators and utilities are confident in the impact of energy efficiency measures.

Illinois efficiency

Environmental Defense Fund has already helped Illinois become significantly more energy-efficient, but the state is on a path to go further.

One of the key elements of the Future Energy Jobs Act, which became law late last year, is a shift in energy-efficiency goals to an improved approach called “cumulative persistent savings.” This ensures customers see the benefits of energy efficiency savings over not just months, but over decades. Specifically, the bipartisan legislation calls for ComEd, the state’s largest utility, to achieve a 21.5 percent long-term reduction in energy use by its customers by 2030. In order words, even if the utility’s previous energy savings disappear, “cumulative persistent savings” guarantee the utility will meet ambitious long-term efficiency goals. The utility is already beginning to update its energy-saving options as a result of the Future Energy Jobs Act.

Proving the Negative: The Challenge of Calculating Energy Efficiency
Click To Tweet

Illinois also is shifting to incentivized, performance-based ratemaking for energy efficiency programs; the utilities will lose revenue – by up to 200 basis points, or up to 2 percent – if their programs’ verified savings don’t meet targets. Conversely, it also provides a bonus when the companies exceed those goals. Such performance-based ratemaking provides clear financial incentive for utilities to run their efficiency programs effectively, and for regulators to get the data right.

If we are to slash energy-use – creating significant greenhouse gas reductions – we need to get beyond past debates and push into data-driven calculations, understanding causality and mobilizing incentives. By incorporating bold new approaches, Illinois will become part of this emerging debate and analysis, helping show that efficiency is more than "good” and “effective” – it has real, measurable results.

By EDF Blogs

By: Dick Munson, Midwest clean energy director, and Andrew Barbeau, senior clean energy consultant

“Efficiency is good.” That’s the mantra, a known truth, shared by both business executives and environmentalists, who eliminate waste to increase profits and reduce pollution.

When it comes to electricity, efficiency also has proven effective. Whereas power consumption a few decades ago was rising annually at more than 7 percent, the introduction of inexpensive and efficient lightbulbs, refrigerators, and smart heating and cooling has recently led to slight declines in energy consumption, even as the economy boomed and population increased.

Efficiency may be good and effective, but it is inherently hard to calculate. How do you prove the negative? Virtually every state has wrestled with the same questions of how and why electricity use didn’t happen. States with energy efficiency standards – requirements for local utilities to incentivize customers to reduce their energy use year after year – want to know if the investments are cost-effective. With new approaches to calculating energy efficiency, Illinois is tackling that question head on.

Questioning efficiency’s impact

Over the years, some have challenged the merits of energy efficiency programs. A particular target has been federal and state weatherization programs – public-sector investments to insulate low-income homes in order to reduce heating and cooling costs and improve quality of life for the people who live in them.  

The programs also were designed to improve the welfare of low-income residents and provide jobs in target communities.

A few studies have questioned whether these programs can be justified based on electricity cost savings alone, but this inquiry misses the bigger picture: The programs also were designed to improve the welfare of low-income residents and provide jobs in target communities.

Others have wondered whether it’s possible to measure the impact incentives have on efficiency changes. Catherine Wolfram, a director for the Economic and Analysis and Policy Group at the University of California, Berkeley’s Energy Institute at Haas School of Business, appropriately describes how measuring the impacts of energy-efficiency programs requires “disentangling which energy consumption changes can be credited to the program, and which would have happened anyway.”

So, an important question for assessing energy efficiency programs is this: Is there a system in place to separate the direct results (gains in energy efficiency) from the reductions that would have happened regardless?

Fortunately, most states with mature utility-run energy efficiency programs have been tackling this challenge for some time. State public utility commissions, which regulate utilities, typically implement the following measures:

• Hire third-party evaluators to determine whether utility-run programs create more benefits than costs (known as the Total Resource Cost test),
• Investigate the Net-to-Gross ratios for efficiency efforts, determining how much savings a utility can actually claim credit for as a result of its policy measures, and
• Utilize randomized control trials to compare the behavior of regular customers versus those that get incentives to save energy.

And improvements are on the way. As smart meter deployment spreads in states throughout the country, the new granular data presents opportunities for utilities and regulators to get an even more accurate measure of the impact of energy efficiency programs. Peering into half-hour blocks of energy use across a utility’s service territory, for example, could assure regulators that savings will be achieved. 

Is there a system in place to separate the direct results (gains in energy efficiency) from the reductions that would have happened regardless?

To take efficiency to the next level, it’s essential that regulators and utilities are confident in the impact of energy efficiency measures.

Illinois efficiency

Environmental Defense Fund has already helped Illinois become significantly more energy-efficient, but the state is on a path to go further.

One of the key elements of the Future Energy Jobs Act, which became law late last year, is a shift in energy-efficiency goals to an improved approach called “cumulative persistent savings.” This ensures customers see the benefits of energy efficiency savings over not just months, but over decades. Specifically, the bipartisan legislation calls for ComEd, the state’s largest utility, to achieve a 21.5 percent long-term reduction in energy use by its customers by 2030. In order words, even if the utility’s previous energy savings disappear, “cumulative persistent savings” guarantee the utility will meet ambitious long-term efficiency goals. The utility is already beginning to update its energy-saving options as a result of the Future Energy Jobs Act.

Proving the Negative: The Challenge of Calculating Energy Efficiency
Click To Tweet

Illinois also is shifting to incentivized, performance-based ratemaking for energy efficiency programs; the utilities will lose revenue – by up to 200 basis points, or up to 2 percent – if their programs’ verified savings don’t meet targets. Conversely, it also provides a bonus when the companies exceed those goals. Such performance-based ratemaking provides clear financial incentive for utilities to run their efficiency programs effectively, and for regulators to get the data right.

If we are to slash energy-use – creating significant greenhouse gas reductions – we need to get beyond past debates and push into data-driven calculations, understanding causality and mobilizing incentives. By incorporating bold new approaches, Illinois will become part of this emerging debate and analysis, helping show that efficiency is more than "good” and “effective” – it has real, measurable results.

By EDF Blogs

By: Dick Munson, Midwest clean energy director, and Andrew Barbeau, senior clean energy consultant

“Efficiency is good.” That’s the mantra, a known truth, shared by both business executives and environmentalists, who eliminate waste to increase profits and reduce pollution.

When it comes to electricity, efficiency also has proven effective. Whereas power consumption a few decades ago was rising annually at more than 7 percent, the introduction of inexpensive and efficient lightbulbs, refrigerators, and smart heating and cooling has recently led to slight declines in energy consumption, even as the economy boomed and population increased.

Efficiency may be good and effective, but it is inherently hard to calculate. How do you prove the negative? Virtually every state has wrestled with the same questions of how and why electricity use didn’t happen. States with energy efficiency standards – requirements for local utilities to incentivize customers to reduce their energy use year after year – want to know if the investments are cost-effective. With new approaches to calculating energy efficiency, Illinois is tackling that question head on.

Questioning efficiency’s impact

Over the years, some have challenged the merits of energy efficiency programs. A particular target has been federal and state weatherization programs – public-sector investments to insulate low-income homes in order to reduce heating and cooling costs and improve quality of life for the people who live in them.  

The programs also were designed to improve the welfare of low-income residents and provide jobs in target communities.

A few studies have questioned whether these programs can be justified based on electricity cost savings alone, but this inquiry misses the bigger picture: The programs also were designed to improve the welfare of low-income residents and provide jobs in target communities.

Others have wondered whether it’s possible to measure the impact incentives have on efficiency changes. Catherine Wolfram, a director for the Economic and Analysis and Policy Group at the University of California, Berkeley’s Energy Institute at Haas School of Business, appropriately describes how measuring the impacts of energy-efficiency programs requires “disentangling which energy consumption changes can be credited to the program, and which would have happened anyway.”

So, an important question for assessing energy efficiency programs is this: Is there a system in place to separate the direct results (gains in energy efficiency) from the reductions that would have happened regardless?

Fortunately, most states with mature utility-run energy efficiency programs have been tackling this challenge for some time. State public utility commissions, which regulate utilities, typically implement the following measures:

• Hire third-party evaluators to determine whether utility-run programs create more benefits than costs (known as the Total Resource Cost test),
• Investigate the Net-to-Gross ratios for efficiency efforts, determining how much savings a utility can actually claim credit for as a result of its policy measures, and
• Utilize randomized control trials to compare the behavior of regular customers versus those that get incentives to save energy.

And improvements are on the way. As smart meter deployment spreads in states throughout the country, the new granular data presents opportunities for utilities and regulators to get an even more accurate measure of the impact of energy efficiency programs. Peering into half-hour blocks of energy use across a utility’s service territory, for example, could assure regulators that savings will be achieved. 

Is there a system in place to separate the direct results (gains in energy efficiency) from the reductions that would have happened regardless?

To take efficiency to the next level, it’s essential that regulators and utilities are confident in the impact of energy efficiency measures.

Illinois efficiency

Environmental Defense Fund has already helped Illinois become significantly more energy-efficient, but the state is on a path to go further.

One of the key elements of the Future Energy Jobs Act, which became law late last year, is a shift in energy-efficiency goals to an improved approach called “cumulative persistent savings.” This ensures customers see the benefits of energy efficiency savings over not just months, but over decades. Specifically, the bipartisan legislation calls for ComEd, the state’s largest utility, to achieve a 21.5 percent long-term reduction in energy use by its customers by 2030. In order words, even if the utility’s previous energy savings disappear, “cumulative persistent savings” guarantee the utility will meet ambitious long-term efficiency goals. The utility is already beginning to update its energy-saving options as a result of the Future Energy Jobs Act.

Proving the Negative: The Challenge of Calculating Energy Efficiency
Click To Tweet

Illinois also is shifting to incentivized, performance-based ratemaking for energy efficiency programs; the utilities will lose revenue – by up to 200 basis points, or up to 2 percent – if their programs’ verified savings don’t meet targets. Conversely, it also provides a bonus when the companies exceed those goals. Such performance-based ratemaking provides clear financial incentive for utilities to run their efficiency programs effectively, and for regulators to get the data right.

If we are to slash energy-use – creating significant greenhouse gas reductions – we need to get beyond past debates and push into data-driven calculations, understanding causality and mobilizing incentives. By incorporating bold new approaches, Illinois will become part of this emerging debate and analysis, helping show that efficiency is more than "good” and “effective” – it has real, measurable results.

By EDF Blogs

By: Dick Munson, Midwest clean energy director, and Andrew Barbeau, senior clean energy consultant

“Efficiency is good.” That’s the mantra, a known truth, shared by both business executives and environmentalists, who eliminate waste to increase profits and reduce pollution.

When it comes to electricity, efficiency also has proven effective. Whereas power consumption a few decades ago was rising annually at more than 7 percent, the introduction of inexpensive and efficient lightbulbs, refrigerators, and smart heating and cooling has recently led to slight declines in energy consumption, even as the economy boomed and population increased.

Efficiency may be good and effective, but it is inherently hard to calculate. How do you prove the negative? Virtually every state has wrestled with the same questions of how and why electricity use didn’t happen. States with energy efficiency standards – requirements for local utilities to incentivize customers to reduce their energy use year after year – want to know if the investments are cost-effective. With new approaches to calculating energy efficiency, Illinois is tackling that question head on.

Questioning efficiency’s impact

Over the years, some have challenged the merits of energy efficiency programs. A particular target has been federal and state weatherization programs – public-sector investments to insulate low-income homes in order to reduce heating and cooling costs and improve quality of life for the people who live in them.  

The programs also were designed to improve the welfare of low-income residents and provide jobs in target communities.

A few studies have questioned whether these programs can be justified based on electricity cost savings alone, but this inquiry misses the bigger picture: The programs also were designed to improve the welfare of low-income residents and provide jobs in target communities.

Others have wondered whether it’s possible to measure the impact incentives have on efficiency changes. Catherine Wolfram, a director for the Economic and Analysis and Policy Group at the University of California, Berkeley’s Energy Institute at Haas School of Business, appropriately describes how measuring the impacts of energy-efficiency programs requires “disentangling which energy consumption changes can be credited to the program, and which would have happened anyway.”

So, an important question for assessing energy efficiency programs is this: Is there a system in place to separate the direct results (gains in energy efficiency) from the reductions that would have happened regardless?

Fortunately, most states with mature utility-run energy efficiency programs have been tackling this challenge for some time. State public utility commissions, which regulate utilities, typically implement the following measures:

• Hire third-party evaluators to determine whether utility-run programs create more benefits than costs (known as the Total Resource Cost test),
• Investigate the Net-to-Gross ratios for efficiency efforts, determining how much savings a utility can actually claim credit for as a result of its policy measures, and
• Utilize randomized control trials to compare the behavior of regular customers versus those that get incentives to save energy.

And improvements are on the way. As smart meter deployment spreads in states throughout the country, the new granular data presents opportunities for utilities and regulators to get an even more accurate measure of the impact of energy efficiency programs. Peering into half-hour blocks of energy use across a utility’s service territory, for example, could assure regulators that savings will be achieved. 

Is there a system in place to separate the direct results (gains in energy efficiency) from the reductions that would have happened regardless?

To take efficiency to the next level, it’s essential that regulators and utilities are confident in the impact of energy efficiency measures.

Illinois efficiency

Environmental Defense Fund has already helped Illinois become significantly more energy-efficient, but the state is on a path to go further.

One of the key elements of the Future Energy Jobs Act, which became law late last year, is a shift in energy-efficiency goals to an improved approach called “cumulative persistent savings.” This ensures customers see the benefits of energy efficiency savings over not just months, but over decades. Specifically, the bipartisan legislation calls for ComEd, the state’s largest utility, to achieve a 21.5 percent long-term reduction in energy use by its customers by 2030. In order words, even if the utility’s previous energy savings disappear, “cumulative persistent savings” guarantee the utility will meet ambitious long-term efficiency goals. The utility is already beginning to update its energy-saving options as a result of the Future Energy Jobs Act.

Proving the Negative: The Challenge of Calculating Energy Efficiency
Click To Tweet

Illinois also is shifting to incentivized, performance-based ratemaking for energy efficiency programs; the utilities will lose revenue – by up to 200 basis points, or up to 2 percent – if their programs’ verified savings don’t meet targets. Conversely, it also provides a bonus when the companies exceed those goals. Such performance-based ratemaking provides clear financial incentive for utilities to run their efficiency programs effectively, and for regulators to get the data right.

If we are to slash energy-use – creating significant greenhouse gas reductions – we need to get beyond past debates and push into data-driven calculations, understanding causality and mobilizing incentives. By incorporating bold new approaches, Illinois will become part of this emerging debate and analysis, helping show that efficiency is more than "good” and “effective” – it has real, measurable results.

By Natalie Karas

Markets for electricity and natural gas in the U.S. grew up independently of one another. The rules in one do not always align with the rules in the other, creating challenges for both operators and regulators. Cumbersome inefficiencies are becoming more evident with the rapid evolution of the electric system. With more gas-fired power plants coming online, and the growing requirement to balance intermittent renewable sources on the electric grid, there is now a pressing need to synchronize these two markets. Fixing the disconnects means the two systems need a better framework for doing business with one another. The place where the markets meet is gas generators’ use of the nation’s pipeline system.

Flexibility is Key

Pipelines primarily make money by selling firm (i.e., premium) transportation service. This type of service places value on one thing: moving gas from point A to point B. This market design means that pipelines have no commercial incentive to provide services that are actually needed by gas generators (they get paid regardless of how the capacity is used). The fuel supply needs of gas generators vary over the course of the day and therefore require pipelines to deliver gas on a more variable basis—a “smart” service far more valuable to power generators because they are paying for what they use, rather than for pipeline capacity. Furthermore, signing up for firm service is often too expensive for gas generators who don’t need the service on every day of the year and are not guaranteed recovery of these costs in the electric markets.

We’ve already seen this conflict come to a head with several pipeline projects. For example, the North American Electric Reliability Corporation’s 2016 Long-Term Reliability Assessment points out that the recent suspension of two major pipeline projects – Kinder Morgan’s Northeast Energy Direct and Algonquin’s (now Enbridge) Access Northeast – “demonstrates the need for regulatory solutions to facilitate electric generator commitments. This is particularly true for generation operating in wholesale electric markets.”

Synchronizing Two Independent Markets

The solution to these problems lies in developing a pipeline service that will be useful and economically beneficial to generators. Real world demand on the electric system requires generators to be nimble, and the gas flows they receive from pipelines should in turn be provided on a flexible basis.

But some outdated market rules are standing in the way. Take for example the pipeline tariff rule, which requires customers to take their natural gas evenly over the course of the day, in equal amounts each hour over a twenty four hour period. But this isn’t how generators burn gas to serve variable electric load. In addition to normal ups and downs throughout the day, these generators are often providers of grid reliability services and help smooth the intermittency of wind and solar resources.

The graph below shows a visual representation of this conflict: the red line is the uniform, flat requirement that gas be delivered in even amounts, whereas the blue line shows how generators actually behave over the course of the day.

Defining the Curve

Pipelines sometimes try to meet the needs of their customers and provide gas on a more flexible basis. But there are no formal rules or language governing this, rendering transactions uneven and opaque. That’s why EDF has been participating in the Gas Electric Harmonization forum at the North American Energy Standards Board (NAESB), a non-profit organization that develops standards for the gas and electric industries.

EDF proposed a definition for a “Shaped Nomination,” which allows a customer to provide to a pipeline the specific quantities of gas it will use in each hour over the course of a day, and suggested a standard for how a customer should communicate this information to the pipeline. Earlier this year, four out of five of NAESB’s segments (i.e., 80% of industry), voted in favor of the proposal. Because local distribution companies voted against it, however, they were able to block the proposal.

Ultimate authority over market design, however, rests with the Federal Energy Regulatory Commission (FERC), which can choose whether or not to follow NAESB recommendations. So now it’s up to FERC to address the definition and standard. NAESB told FERC it “looks forward to responding to any guidance provided by the Commission.”  The industry as a whole would benefit from this guidance, particularly because all segments of NAESB except for one voted to move forward with the proposal.

Next Steps

If FERC decides to move forward, the definition and standard will bring much-needed clarity and transparency to the natural gas and electricity markets. The definition and standard will enhance efficiency by providing a transactional structure and means of communicating a Shaped Nomination. This would be an important first step in developing a more robust market for flexible pipeline services, which is critical for a more reliable, efficient, and cost-effective operation of the grid.

Image source: Wikimedia Commons

By Natalie Karas

Markets for electricity and natural gas in the U.S. grew up independently of one another. The rules in one do not always align with the rules in the other, creating challenges for both operators and regulators. Cumbersome inefficiencies are becoming more evident with the rapid evolution of the electric system. With more gas-fired power plants coming online, and the growing requirement to balance intermittent renewable sources on the electric grid, there is now a pressing need to synchronize these two markets. Fixing the disconnects means the two systems need a better framework for doing business with one another. The place where the markets meet is gas generators’ use of the nation’s pipeline system.

Flexibility is Key

Pipelines primarily make money by selling firm (i.e., premium) transportation service. This type of service places value on one thing: moving gas from point A to point B. This market design means that pipelines have no commercial incentive to provide services that are actually needed by gas generators (they get paid regardless of how the capacity is used). The fuel supply needs of gas generators vary over the course of the day and therefore require pipelines to deliver gas on a more variable basis—a “smart” service far more valuable to power generators because they are paying for what they use, rather than for pipeline capacity. Furthermore, signing up for firm service is often too expensive for gas generators who don’t need the service on every day of the year and are not guaranteed recovery of these costs in the electric markets.

We’ve already seen this conflict come to a head with several pipeline projects. For example, the North American Electric Reliability Corporation’s 2016 Long-Term Reliability Assessment points out that the recent suspension of two major pipeline projects – Kinder Morgan’s Northeast Energy Direct and Algonquin’s (now Enbridge) Access Northeast – “demonstrates the need for regulatory solutions to facilitate electric generator commitments. This is particularly true for generation operating in wholesale electric markets.”

Synchronizing Two Independent Markets

The solution to these problems lies in developing a pipeline service that will be useful and economically beneficial to generators. Real world demand on the electric system requires generators to be nimble, and the gas flows they receive from pipelines should in turn be provided on a flexible basis.

But some outdated market rules are standing in the way. Take for example the pipeline tariff rule, which requires customers to take their natural gas evenly over the course of the day, in equal amounts each hour over a twenty four hour period. But this isn’t how generators burn gas to serve variable electric load. In addition to normal ups and downs throughout the day, these generators are often providers of grid reliability services and help smooth the intermittency of wind and solar resources.

The graph below shows a visual representation of this conflict: the red line is the uniform, flat requirement that gas be delivered in even amounts, whereas the blue line shows how generators actually behave over the course of the day.

Defining the Curve

Pipelines sometimes try to meet the needs of their customers and provide gas on a more flexible basis. But there are no formal rules or language governing this, rendering transactions uneven and opaque. That’s why EDF has been participating in the Gas Electric Harmonization forum at the North American Energy Standards Board (NAESB), a non-profit organization that develops standards for the gas and electric industries.

EDF proposed a definition for a “Shaped Nomination,” which allows a customer to provide to a pipeline the specific quantities of gas it will use in each hour over the course of a day, and suggested a standard for how a customer should communicate this information to the pipeline. Earlier this year, four out of five of NAESB’s segments (i.e., 80% of industry), voted in favor of the proposal. Because local distribution companies voted against it, however, they were able to block the proposal.

Ultimate authority over market design, however, rests with the Federal Energy Regulatory Commission (FERC), which can choose whether or not to follow NAESB recommendations. So now it’s up to FERC to address the definition and standard. NAESB told FERC it “looks forward to responding to any guidance provided by the Commission.”  The industry as a whole would benefit from this guidance, particularly because all segments of NAESB except for one voted to move forward with the proposal.

Next Steps

If FERC decides to move forward, the definition and standard will bring much-needed clarity and transparency to the natural gas and electricity markets. The definition and standard will enhance efficiency by providing a transactional structure and means of communicating a Shaped Nomination. This would be an important first step in developing a more robust market for flexible pipeline services, which is critical for a more reliable, efficient, and cost-effective operation of the grid.

Image source: Wikimedia Commons

By Natalie Karas

Markets for electricity and natural gas in the U.S. grew up independently of one another. The rules in one do not always align with the rules in the other, creating challenges for both operators and regulators. Cumbersome inefficiencies are becoming more evident with the rapid evolution of the electric system. With more gas-fired power plants coming online, and the growing requirement to balance intermittent renewable sources on the electric grid, there is now a pressing need to synchronize these two markets. Fixing the disconnects means the two systems need a better framework for doing business with one another. The place where the markets meet is gas generators’ use of the nation’s pipeline system.

Flexibility is Key

Pipelines primarily make money by selling firm (i.e., premium) transportation service. This type of service places value on one thing: moving gas from point A to point B. This market design means that pipelines have no commercial incentive to provide services that are actually needed by gas generators (they get paid regardless of how the capacity is used). The fuel supply needs of gas generators vary over the course of the day and therefore require pipelines to deliver gas on a more variable basis—a “smart” service far more valuable to power generators because they are paying for what they use, rather than for pipeline capacity. Furthermore, signing up for firm service is often too expensive for gas generators who don’t need the service on every day of the year and are not guaranteed recovery of these costs in the electric markets.

We’ve already seen this conflict come to a head with several pipeline projects. For example, the North American Electric Reliability Corporation’s 2016 Long-Term Reliability Assessment points out that the recent suspension of two major pipeline projects – Kinder Morgan’s Northeast Energy Direct and Algonquin’s (now Enbridge) Access Northeast – “demonstrates the need for regulatory solutions to facilitate electric generator commitments. This is particularly true for generation operating in wholesale electric markets.”

Synchronizing Two Independent Markets

The solution to these problems lies in developing a pipeline service that will be useful and economically beneficial to generators. Real world demand on the electric system requires generators to be nimble, and the gas flows they receive from pipelines should in turn be provided on a flexible basis.

But some outdated market rules are standing in the way. Take for example the pipeline tariff rule, which requires customers to take their natural gas evenly over the course of the day, in equal amounts each hour over a twenty four hour period. But this isn’t how generators burn gas to serve variable electric load. In addition to normal ups and downs throughout the day, these generators are often providers of grid reliability services and help smooth the intermittency of wind and solar resources.

The graph below shows a visual representation of this conflict: the red line is the uniform, flat requirement that gas be delivered in even amounts, whereas the blue line shows how generators actually behave over the course of the day.

Defining the Curve

Pipelines sometimes try to meet the needs of their customers and provide gas on a more flexible basis. But there are no formal rules or language governing this, rendering transactions uneven and opaque. That’s why EDF has been participating in the Gas Electric Harmonization forum at the North American Energy Standards Board (NAESB), a non-profit organization that develops standards for the gas and electric industries.

EDF proposed a definition for a “Shaped Nomination,” which allows a customer to provide to a pipeline the specific quantities of gas it will use in each hour over the course of a day, and suggested a standard for how a customer should communicate this information to the pipeline. Earlier this year, four out of five of NAESB’s segments (i.e., 80% of industry), voted in favor of the proposal. Because local distribution companies voted against it, however, they were able to block the proposal.

Ultimate authority over market design, however, rests with the Federal Energy Regulatory Commission (FERC), which can choose whether or not to follow NAESB recommendations. So now it’s up to FERC to address the definition and standard. NAESB told FERC it “looks forward to responding to any guidance provided by the Commission.”  The industry as a whole would benefit from this guidance, particularly because all segments of NAESB except for one voted to move forward with the proposal.

Next Steps

If FERC decides to move forward, the definition and standard will bring much-needed clarity and transparency to the natural gas and electricity markets. The definition and standard will enhance efficiency by providing a transactional structure and means of communicating a Shaped Nomination. This would be an important first step in developing a more robust market for flexible pipeline services, which is critical for a more reliable, efficient, and cost-effective operation of the grid.

Image source: Wikimedia Commons

Written by Moms Clean Air Force

This is an exclusive Moms Clean Air Force interview with Mayor Jim Cason of Coral Gables, Florida:

What is unique about protecting the resources and environment of Coral Gables?

Coral Gables has a very unique history as one of the first planned cities in the United States. When George Merrick created his vision for Coral Gables, over 90 years ago, he highlighted many aspects of the environment including our tree canopy and our proximity to the water. Coral Gables has been designated as a Tree City USA for the past 32 years. Our tree canopy not only provides for picturesque roadways and neighborhoods but it brings immense value to the environment by providing shade and reducing the heat island effect in our community, providing a filter to help keep our air quality clean, and providing shelter and food for countless wildlife. Clean air is very important issue. Air pollution can have a profound impact on the elderly, young children and anyone that has any respiratory issues. As has been detailed above, Coral Gables places a very high importance on protecting and enhancing our tree canopy not only to enhance the beauty of our City but to also help keep our air quality clean.

Our City also has an extensive mangrove shoreline that helps protect against erosion, storm surge, support fisheries and filters runoff. The protection of this natural buffer is not only crucial in helping deal with the impacts of sea level rise and helping in preserving our coastal community but also in keeping our waterways and ocean healthy and increasing biodiversity amongst our marine life.

The City has also placed a big emphasis on expanding green space within the City by purchasing five properties ($3.6 million investment), as a part of the City’s Neighborhood Renaissance Program. The properties are going to to be used for passive parks in order to provide additional green spaces in City’s neighborhoods.

The City believes it is of the upmost importance to protect our environment and conserve our natural resources for not only the benefit of our current residents, businesses, and visitors but for future generations as well.

As a parent, are you worried about the effects of climate change on your children and the children of Coral Gables?

As a City, we are very concerned about the effects that climate change and sea level rise can have on our region now and into the future. Our City, which the majority lies only between 0 and 10 feet above sea level and has over 42 miles of coastline and waterway exposure puts the City, much like the entire region of South Florida, at a high risk to see the impacts of sea level rise. The City has already begun seeing traces of saltwater intrusion in our groundwater supply and is also seeing periodic sunny day flooding during king high tide events. In order to help minimize these effects, the City is taking a number of steps to try to reduce our operational impact on the environment. This includes the implementation of the city’s 10 year Sustainability Master Plan, which identifies 23 projects that aim at decreasing our energy, water, and fuel consumption, while increasing alternative modes of transportation, and raising awareness of environmental issues. It involves the City setting 20% reduction goals for energy and water usage along with a 20% reduction in greenhouse gas emissions.

The City is also an original member of the Clean Energy Green Corridor Program, an initiative that allows commercial and residential property owners to implement energy efficiency upgrades through Property Assessed Clean Energy (PACE) financing. In addition, the City passed a Green Building Ordinance in April 2016 that requires certain buildings in Coral Gables to be built according to the latest applicable version of the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) Silver certification or equivalent. Encouraging the construction of more environmentally friendly buildings equates to cleaner and healthier buildings and improving both indoor and outdoor air quality.

Coral Gables is also committed to developing a transportation network that relies less on automobiles and more on bicycling, walking and the use of transit. The City has expanded alternative transportation services such as the free trolley (which has over 1 million riders per year) and bicycling by adding over 20 miles of bike lanes in the coming years. The more vehicles we can reduce off of the road the lower our emissions will be thus creating less outdoor air pollution.

In 2016, the city introduced its new Green Fleet, 20 gas-free electric Nissan Leaf vehicles and is planning on adding 15 more this fiscal year. The City now has one of the largest electric vehicle fleets and EV charging infrastructure for a city our size in the entire state of Florida.

Furthermore, the City is taking a very active role in planning for sea level rise. In August 2015, the City of Coral Gables signed on as a municipal partner of the Southeast Florida Regional Climate Compact.

Through these actions listed above and many more the City’s goal is preserving the unique quality of life and environment that our past and current residents, businesses and visitors have been accustomed to over the last 90 years while also preserving it for future generations to enjoy over the next 90 years and beyond.

Why is a bipartisan effort so important and how can these efforts be achieved in our politically polarizing culture?

Issues such as air pollution, climate change and sea level rise don’t see political boundaries. (Tweet this) The impacts are far reaching no matter what side of the political spectrum you are on. Therefore it is imperative that everyone work together to help come up with solutions to these very complicated and complex issues. It is why the City felt it was so important to join on with the efforts of groups like the Southeast Florida Regional Climate Compact. The Compact is a regional effort across Palm Beach, Broward, Miami-Dade, and Monroe Counties. The Compact is the first of its kind throughout the country and represents “a new form of regional climate governance designed to allow local governments to set the agenda for adaptation while providing an efficient means for state and federal agencies to engage with technical assistance and support”.

Is there anything you’d like to share that is important for Moms Clean Air Force members to know?

We would like for Moms Clean Air Force members to know that the City of Coral Gables is committed environmental preservation and wants to be at the forefront in dealing with issues such as climate change and sea level rise to help preserve our environment for current and future generations.

——–

Jim Cason was first elected Mayor of the City of Coral Gables on April 12, 2011. He was elected again in April 2013, and reelected for a third term in April 2015.

Mayor Cason is a retired U.S. Foreign Service officer with more than 48 years of national and international public service, including extensive experience in Latin America as a leader of multi- agency Embassy communities. He is fluent in five languages.

A resident of Coral Gables with a family history in public service, Mayor Cason has been married for 43 years to his wife Carmen. The Casons have two grown sons; one is a Naval Aviator and the other is in international business. They also have six wonderful grandchildren.

TELL YOUR SENATOR: PROTECT OUR AIR AND OUR RESOURCES

By Kate Zerrenner

We’re entering the home stretch of the 85th Session of the Texas Legislature.

Now past the Session’s midway point, legislators and advocates are working hard to ensure their bills cross the finish line. Here’s a look at which water, clean energy, and climate bills have been filed, including those we hope will rise to the top.

Water bills

In the 1930s, Texas meteorologist Isaac Klein reportedly said Texas is a land of eternal drought, interrupted occasionally by biblical floods. Luckily the state is in a relatively wet period: The majority of Texas is drought-free and just under half the state is in the lowest bracket of drought.

But Texans understand water should always be on our minds, so it’s no surprise there are dozens of water bills this Session.

Water planning

— Lyle Larson (R-San Antonio), Chair of the House Natural Resources Committee, has for many Sessions led on water legislation. He filed several bills including House Bill (HB) 2948, which is an omnibus water bill – that is, it includes several related issues. For example, it would create a water planning council to coordinate interregional water issues, and require regional water planning groups to set specific water-use goals for each decade in the State Water Plan. The bill was voted out of committee in mid-April. EDF submitted written testimony, supporting the bill but recommending that water planning includes available climate data from the State Climatologist.

— Representative Larson’s counterpart in the Senate, Charles Perry (R-Lubbock), Chair of the Senate Committee on Agriculture, Water, & Rural Affairs, filed Senate Bill (SB) 1511, which requires more hearings to get public input on water planning, among other things. SB 1511 was voted out of committee in mid-April.

Desalination

Desalination is often put forward as a supply option in water planning. However, traditional desalination is highly energy-intensive. Since 73 percent of Texas’ electricity comes from fossil-fueled power plants that consume vast amounts of water, desalination in Texas is highly water-intensive.

— Sen. Perry also introduced SB 1525, which requires the state to study the costs and opportunities associated with new water supplies, in particular brackish groundwater and seawater desalination. SB 1525 was voted out of committee in mid-April, and EDF submitted testimony recommending that any plans for future water supplies should factor in energy costs and impacts.

— Last Session Jose Rodriguez (D-El Paso) introduced and passed SB 991, which required the General Land Office (GLO) and the TWDB to study the economic and geophysical potential of using wind and solar PV energy to desalinate brackish groundwater, with a plan to add additional renewable technologies for seawater desalination in the study. Released in early March 2017, the study found nearly 200 sites on state-owned land are cost-effective for using solar or wind energy to desal brackish groundwater.

This Session, Senator Rodriguez has filed a follow-up bill, SB 1597, which requires the GLO to use the study (and any other available data) to develop a plan to pilot renewable-energy-powered desal.

Other

— Further bills to watch include Chairman Larson’s HB 31, which creates procedures for adopting groundwater permit moratorium (voted out of committee in early April), and HB 2377, which establishes rules for brackish groundwater production zone permits and requires the establishment of a management plan for brackish groundwater desalination goals. Both bills are strong the way they are, but the captions are so broad that they could become “Christmas trees,” i.e. bills completely covered in amendments as decorations.

Anti-clean energy bills

Several anti-clean energy bills have cropped up this Session, many of them related to the repeal or limitation of Texas Tax Code, Chapter 313, also known as the Texas Economic Development Act. Although not specific to clean energy, Chapter 313 has incentivized wind and solar power development in Texas and it is now under fire.

— One bill aims to outright repeal the Act (SB 600 by Konni Burton (R-Colleyville)), scheduled for a hearing today, April 18th, and multiple bills put sections of Chapter 313 on the chopping block:

• HB 445 by James Frank (R-Wichita Falls) – left pending in committee in early April,
• HB 3086 by Jim Murphy (R-Houston) – referred to committee,
• SB 277 by Donna Campbell (R-New Braunfels) – voted out of committee in late March, but has not been brought up for a vote on the Senate floor, and
• SB 1027 by Craig Estes (R-Wichita Falls) – referred to committee.

Wind energy has been incredibly successful in Texas, from an electricity reliability and economic development standpoint. For example, Texas is home to nearly a quarter of the nation’s wind power jobs, and the state ranks number one with the most capital investment for wind energy at over $32.7 billion. In addition, Texas is expected to see significant solar power growth over the coming years – the state’s main grid operator forecasts an approximately 70-fold increase by 2030. It’s also worth noting that natural gas and coal power have enjoyed state and federal incentives for a century, and continue to do so.

Withdrawing the incentive – which benefits wind and solar among other industries – does not make sense if we want to continue to grow the clean energy economy, and opposition to these anti-clean energy bills has proved so far to be widespread and effective.

Pro-clean energy bills

Texas Energy Plan

— Despite having more natural gas, wind, solar, and energy efficiency potential than any other state, Texas currently does not have a statewide energy plan. Identical companion bills introduced by Senator Kirk Watson (D-Austin), SB 1999, and Representative Jessica Farrar (D-Houston), HB 4217, would remedy that. The Public Utility Commission, which is responsible for oversight of the state’s electricity resources, would consult with key stakeholders to develop a Texas Energy Plan that encourages the development of a diverse, reliable energy portfolio, promotes research and innovation, and considers water impacts of energy choices. Neither bill has received a hearing yet.

Energy efficiency

— HB 3399 by Mark Keough (R-The Woodlands) requires a two-year study to determine the technical and economic potential for energy efficiency in Texas. This follows up on a bill and study completed in December 2008 that found Texas could achieve nearly 7 percent energy savings by 2018 – if the recommended strategies were implemented. A few of those strategies were implemented, but several were not. Further, the past decade has seen significant changes in the energy makeup, as well as explosions in population growth and economic development in the state, so the time is ripe to revisit our energy (and water) saving potential.

Climate bills

Climate bills are pretty thin on the ground this Session.

— A refile from last session, HB 773 by Eric Johnson (D-Dallas) is a commonsense bill that would require state agencies to include projections about weather, water availability, and climate variability in their strategic plans. This is a responsible approach to ensuring that state agencies are more prepared and resilient in the face of a changing climate. This bill had a hearing in late March, but was left pending in committee. In the current environment, hopes are not high for HB 773.

— James White’s (R-Hillister) HB 420 creates a problem where there isn’t one. This bill would prohibit evidence of a defendant’s theories, beliefs, or statements on climate change from being admitted as proof of an offense, such as fraud, in a criminal court case. In order words, it would not allow climate change to be admitted as evidence. The intent of this bill seems to be to provide cover for an industry that may be harming public health – it is colloquially being referred to as the “Exxon bill,” referring to Exxon pursuing climate-disruptive activities, even though evidence suggests executives knew about the realities of climate change for years. The bill was referred early in the Session, and has not yet been scheduled for a hearing.

As with every legislative session, there is a mix of positive and negative, and most bills don’t cross the finish line. The bills highlighted here reflect the biggest opportunities for good and bad policy in the Texas’ climate and clean energy economy. EDF will be keeping a close eye on all of these bills.

Note: The statuses of these bills are correct as of publication, but at this stage in the Session, things move quickly, so use the links provided to check a changing status.

Thanks for listening to the latest episode of Delta Dispatchers with hosts Simone Maloz & Jacques Hebert. This week's episode is dedicated to just one thing: funding! Simone and Jacques will talk to their guests about the complex realities of funding coastal restoration in Louisiana. In the first half the show, Jacques will speak with Elizabeth Mabry, Senior Policy Manager, Ecosystems, Environmental Defense Fund to talk about the opportunities and challenges in securing funding in today's political realities. On the second ...

The post Delta Dispatches Podcast – Funding Coastal Restoration appeared first on Restore the Mississippi River Delta.

Thanks for listening to the latest episode of Delta Dispatchers with hosts Simone Maloz & Jacques Hebert. This week's episode is dedicated to just one thing: funding! Simone and Jacques will talk to their guests about the complex realities of funding coastal restoration in Louisiana. In the first half the show, Jacques will speak with Elizabeth Mabry, Senior Policy Manager, Ecosystems, Environmental Defense Fund to talk about the opportunities and challenges in securing funding in today's political realities. On the second ...

The post Delta Dispatches Podcast – Funding Coastal Restoration appeared first on Restore the Mississippi River Delta.