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EuroPEX Rolling Month Average Daily Prices on the European Power Exchanges
CME Group / NYMEX PJM Western Hub Peak Calendar Month Real Time LMP Swap Futures Contract
CME Group / NYMEX PJM Western Hub 50 MW Peak Calendar Month Real Time LMP Swap Futures Contract
EIA Average Retail Price of Electricity (by U.S. State; Cents per kilowatthour)
EIA Electric Power Monthly
EIA Electric Power Annual
International Energy Agency (IEA) - Monthly Electricity Statistics
| Power Generation |
Electricity is a naturally occurring force. All matter is composed of the basic elements of the periodic table and of compounds (combinations of elements). These elements and compounds are composed of atoms. An atom consists of a positively charged nucleus (protons) which is surrounded by a negatively charged electron(s). Various unique combinations of the protons, electrons and neutrons (neutral particles) create the individual elements. An atom is held together by the forces of attraction between the negatively charged electrons and the positively charged protons. Most atoms tend to have the exact same amount of protons and electrons. However, some naturally occuring minerals / metals have electrons that have a weak bond and can be detached from the atom and become free electrons.
Copper is an ideal element to use for the production of electricity because it is a conductor. The copper atom has 29 protons and 29 electrons. The electrons surround the 29 proton nucleus in a series of shells, The first shell holds 2 electrons, the second shell holds up to 8 electrons, the third shell holds up to 18 electrons, and the next shell will hold up to 32 electrons. Copper has 28 electrons in its first three shells and the last remaining electron is alone in the outermost shell. This outermost electron has the least attraction to the nucleus due to its position. This free electron easily drifts from its original atom and attaches to a neighboring atom. In nature, the movement of the free electron is random. However, the design of the copper coil generator mentioned below is able to direct the movement of free electrons moving from atom to atom and this is electric current.
Generation is the production of electricity through mechanical energy, which in itself can be performed with assistance of the burning of fossil fuels or the use other energy sources. Most electricity generation in the world is produced at a fuel burning electric power plant. The power plant has large turbines, which are steel shafts that have numerous rows of blades, that are either turned by water (hydroelectric power generation), steam (created by burning coal or natural gas to heat water) or by engines that are powered by fossil fuels (natural gas, and transportation-grade petroleum distillates), and nuclear powered steam or engines. The turbine shaft has electromagnets attached to it (rotor) and these electromagnets spin rapidly within a cylindrical, magnet and copper coil housing (stator). The rotating magnetic field induces an alternating current within the stator, which is alternating current electricity. The rotor turns together with the turbine shaft at 3,000 revolutions per minute, or 50 revolutions per second, which corresponds to the 50 hertz (Hz) alternating current frequency of the electrical network (the direction of the current changes 50 times a second). The electricity is conducted away from the generator by voltage, along the copper wire and into a circuit, which must be closed and have one negative pole and one positive pole.
Internationally, appoximately 85% of electricity generating power plants are of a design where pressurized steam is the force (prime mover) that drives the fan blades of the turbines (referred to as steam turbines). The fossil fuels indicated above, or the nuclear reactor / geothermal as the heat source, is burned to heat water in a large, industrial boiler to produce the steam. The most common type of design is the Impulse Turbine in which high temperature, pressurized steam is concentrated through a fixed nozzle(s) directly at the rotor blades at the one end of the turbine. The other end of the turbine's shaft is connected to the generator. The generator must rotate at a constant synchronous speed to produce a current frequency (measured in Hertz / Hz) compatible with the electric power system. For instance, in the United States, the generator(s) must rotate at 3,000 revolutions per minute for 50 Hz systems, and at 3,600 revolutions per minute for 60 Hz systems.
A combi-unit is generating plant where a gas turbine was added to the existing steam boiler in order to increase yield. The gas turbine can be used independently or in combination with the steam turbine, depending on the amount of power required. The gas turbine uses low-Nox burners, so that the plant uses fuel efficiently and complies with environmental requirements for emissions.
The newer, typical coal-fired electricity generating power plant utilizes a Fluidized-bed Combustion (FBC) boiler to heat the steam used to drive the turbine rotor fans. In an FBC design the coal is first crushed and then mixed with limestone. The mixed coal and limestone aggregate is supported on rising current of air (fluidized) and is combustible at a low temperature. The limestone removes sulfur released during the combustion process.
By applying steam and oxygen under pressure to coal, coal can be "gasified" (Coal Gasification) or separated into hydrogen, carbon monoxide and several other gases. This creates a fuel that can be burned like natural gas and reduces emmission of mercury, sulfur, nitrogen and particulates (no-gaseous material). However, it is expensive to construct goal gasification plants and it requires substantial amounts of energy to complete the process.
In a hydroelectric plant located perpendicular across a river, the system starts by diverting the water using a non-impounding structure called the weir. From the weir, the water enters the desander, where water sediments settle to the bottom and upstream non-biodegradable trash are filtered out. From the desander, the water is then transported through steel pipes called conveyance lines, which are laid out to follow the landscape’s contour. Then, the water drops at an angle through a pressurized steel pipe known as the penstock. The penstock leads directly to the power plant which houses the turbine units and generators. The water from the penstock will impinge on the runner blades of the turbines causing a rotating motion, which turns the shaft attached to the generators. The generators are connected to a transformer substation where the energy produced is transmitted to the main grid for distribution. At the side of the power plant is the tailrace where the water that passed through the system is brought back to the river.
| U.S. Existing Capacity by Energy Source (2008) (Megawatts) |
||||
|---|---|---|---|---|
| Energy Source | Number of Generators | Generator Nameplate Capacity | Net Summer Capacity | Net Winter Capacity |
| Coal | 1,445 | 337,300 | 313,322 | 315,461 |
| Petroleum | 3,768 | 63,655 | 57,445 | 61,538 |
| Natural Gas | 5,467 | 454,611 | 397,432 | 427,703 |
| Other Gases | 102 | 2,262 | 1,995 | 1,958 |
| Nuclear | 104 | 106,147 | 100,755 | 102,494 |
| Hydroelectric Conventional | 3,996 | 77,731 | 77,930 | 77,694 |
| Wind | 494 | 24,980 | 24,651 | 24,698 |
| Solar Thermal and Photovoltaic | 89 | 539 | 536 | 455 |
| Wood and Wood Derived Fuels | 353 | 7,730 | 6,864 | 6,905 |
| Geothermal | 228 | 3,281 | 2,256 | 2,409 |
| Other Biomass | 1,412 | 4,854 | 4,186 | 4,263 |
| Pumped Storage | 151 | 20,355 | 21,858 | 21,768 |
| Other | 49 | 1,042 | 942 | 968 |
| Total | 17,658 | 1,104,486 | 1,010,171 | 1,048,313 |
Source: www.eia.doe.gov/cneaf/electricity/epa/epat1p2.html
Power plants are are identified by how many Megawatts of electricity the plant can generate, which is the sum of the
gross capacity of the number of generating units located within the plant.
Generator capacity usage is not always 100% due to problems and / or scheduled maintenance and repair work. Every plant operator needs to maintain a reserve margin, which is the excess of generation capacity over peak demand, in order to be able to cope with an equipment breakdown or scheduled maintenance and repair. The international industry standard reserve margin is approximately 15.0%.
Base load power plants are designed to operate 24-hours per day, generating electricity at an even, consistent level 7-days per week, year-round. The reason for this is that electric power cannot be stored, it can only be produced. In order for there to be sufficient power and any given time, peak and off peak, electricity must be continuosly generated and transmitted into the grid system constantly and consistently. These are normally coal-powered or nuclear-reactor powered generating facilities as they rely upon a stable-price fuel source.
Some power plants may sit as a “spinning reserve” during off-peak or on-peak periods. Peaking plants (or sometimes referred to as "Peakers") are turned on or “dispatched” as demand increases above the normal base load demand. These facilities are essentially power plants that get switched on only a few times per year, usually only during the Summer months. Peaking plants are usually more expensive to operate, often fueled by refined petroleum products, or natural gas, and have a fuel cost per kWh higher than a baseload plant because the fuel is purchased on the spot market at the moment when the facility is started up. Some base load plants are large enough that they have additional generators available on standby to meet peak demand.
Blackouts occur due to system failure. If one plant in the grid suddenly quits producing power (lightning strike, downed power line or mechanical failure), the other plants on the network must be able to increase their output to make up the difference. If the power plants are already working near their maximum output, then they will automatically shut down rather than exceed their maximum threshold. As plants shut down, they place the burden on remaining plants, which in turn must also shut down, leading to a shut down of the entire system.
The last major blackout in the United States was August 14, 2003, 4:09pm through 4:13pm EDT (final stage), when after several generator trips (shut down) earlier in the day, the 345 kV Harding-Chamberlin Transmission Line in northern Ohio tripped due to thermal sagging into the trees below, which tripped 2 other 345 kV lines (Hanna-Juniper and the Star-South Canton). When these lines disconnected, electricity began flowing over other transmission lines, including the underlying 138 kV systems, which began to overload. The result was the eventual shut down of the Eastern Interconnection electricity grid due to a cascading series of line disconnects when voltage and frequency began to substantially fluctuate.
Brownouts occur due to a decline in an electric grid’s voltage for short periods of time. Brownouts are sometimes intentionally instituted during times of peak demand in order to prevent any one plant on the grid from approaching its maximum power supply threshold and shutting down, which might lead to a blackout. Rolling blackouts occur when an electrical system is unable to meet heavy peak demand because of a deficiency in the power supply. An emergency electricity purchase, voluntary curtailment, contracted curtailment and/or voltage reduction may alleviate the situation. A public Power Warning appeal may also be issued when an immediate reduction in power usage is necessary to avert overload of the electrical system. A Power Interruption Alert is issued to the public indicating that load shedding (instantaneous cutting of power to customers) or rolling blackouts are imminent. The temporarily disconnecting of electrical circuits on a rotating basis is an attempt to unilaterally reduce demand in order to avert the widespread crash of the regional grid.
A power surge occurs when an electric grid voltage suddenly goes from the normal supply to 110% above normal supply.
The electricity generated by the plant is transported directly from the generator via a transformer system to the grid as every power station has a transformer station that connects to high-voltage lines. This is known as a step-up substation as the electricity voltage is stepped up to allow for more efficient long distance transmission.
Power Plant Operation Credit Issues
Please also see the separate page for the Coal Industry & Commodity Market and also see the separate page for the Natural Gas Industry & Commodity Market
According to the U.S. department of Energy, Office of Electricity Delivery and Energy Reliability, in 1940, 10% of total energy consumption in the United States was used to produce electricity. In 1970, that amount had increased to 25%, and as of 2008 it is 40%.
The cost to generate electricity fluctuates daily and monthly depending on the mix of fuel, and when it was purchased, used by the generating facility. Power plants attempt to enter into long-term supply contracts in order to stabilize operating expenses. Overall, the long-term trend has been that electricity prices are increasing because fuel costs have been increasing: Coal price has increased from a 1999 average of $1.22 per Million Btu to $2.07 in 2008; Distillate fuel (No. 2) has increased from a 1999 average of $4.03 per Million Btu to $20.08 in 2008; Natual gas has increased from a 1999 average of $2.57 per Million Btu to $9.11 in 2008.
1 Kilowatt-hour of Electricity = 3,412 Btu; A kilowatt-hour is a unit of work or energy equal to that done by one kilowatt of power acting for one hour. A kilowatt is 1,000 watts or 1.34 horsepower.
Average Price of No. 2 Fuel Oil Delivered to Electric Utility Plants in 2006: $1.982 per gallon
Average Price of Coal Delivered to Electric Utility Plants in 2006: $34.26 per short ton (2,000 pounds) / $0.017 per
pound
Average Price of Natural Gas Delivered to Electric Utility Plants in 2006: $7.09 per Mcf (thousand cubic feet) / $0.0071 per foot
EIA average cost of fossil-fuel receipts at Electric Generating Plants (Nominal dollars per Million Btu, including taxes):
| Year | Coal | Residual Fuel Oil | Distillate Fuel Oil | Petroleum Coke | Natural Gas |
| 2006 | $1.69 | $7.85 | $13.28 | $1.33 | $6.94 |
| 2007 | $1.77 | $8.64 | $14.85 | $1.51 | $7.11 |
| 2008 | $2.07 | $13.62 | $21.46 | $2.11 | $9.02 |
| 2009 | $2.21 | $8.71 | $13.17 | $1.62 | $4.70 |
Source: www.eia.doe.gov/emeu/mer/pdf/pages/sec9_15.pdf (.pdf format)
The burning of coal as a fuel source creates environmental problems. Scrubbers is a process where flue gas desulphurization removes 80% to 90% of sulfur dioxide (SO2) from power plant exhaust stacks.
Bag houses are tightly woven cloth bags that are located in the flue and collect approxiamtely 90% of dust particles (fly ash) in the flue gas. Electrostatic precipitators are also used to collect ash particles for disposal.
On Friday, February 8, 2008, the U.S. Court of Appeals for the District of Columbia Circuit ruled (No. 05-1097;
State of New Jersey, et al., versus the Environmental Protection Agency, and the Utility Air Regulatory Group) that the
Environmental Protection Agency (EPA) violated Section 112 of the federal Clean Air Act (CAA) when it imposed a Delisting
Rule, delisting coal- and oil-fired Electric Utility Steam Generating Units (EGUs) from established regulatory guidelines
for mercury emission related to plant operations (coal naturally contains mercury in trace quantities, a portion of which is released during combustion for energy or heat generation).
pacer.cadc.uscourts.gov/docs/common/opinions/200802/05-1097a.pdf (.pdf format)
Within the European Union, generating plants are being requested to convert from coal to natural gas as the fuel source in order to be compliant with EU carbon directives. However, there is the issue of fuel security as most of the EU's natural gas supply comes from Russia.
For Carbon Trading / Carbon Offset & Renewable Energy Credits, please see the separate Carbon Trading Page.
FutureGen
FutureGen is the plan by a public-private partnership to construct a coal-fired electricity generating power plant with the capability to capture
carbon dioxide emissions and then store it underground. In January 2008, the U.S Department of Energy publicly indicated
that it would no longer be involved in the project. The DOE had indicated that the program’s budget had increased to
$1.8 billion, approximately double the original estimate for the project thus it could no longer support it (the DOE
had originally committed to funding 74% of the project's development costs in 2003). The DOE's
partners in the project, the FutureGen Alliance, Inc., which is a consortium of coal companies and electric utilities,
publicly indicated that it disagreed with the DOE's position. The Alliance believes that costs have increased due to
inflation related to the market increase for the cost of materials (steel, concrete and power plant components) due to the
volume of costruction in the world thus the DOE's commitment is still the same proportion adjusted for inflation. Alliance members include American Electric Power, Anglo American, BHP Billiton, the
China Huaneng Group, CONSOL Energy Inc., E.ON U.S., Foundation Coal, Luminant, PPL Corporation, Rio Tinto Energy America,
Peabody Energy, Southern Company, and Xstrata Coal.
www.futuregenalliance.org/
FutureGen utilizes a technology referred to as CCS (Carbon Capture and Storage) to produce hydrogen to power the electricity generating turbines and then pumps the carbon dioxide underground, under pressure (referred to a carbon dioxide sequestering) into saline aquifiers thus the prototype plant would produce "zero" emissions. The key to the success of such a program would be the ability to perform the gasification of coal and the sequestering of the carbon impurities on a large enough scale to make a difference (tens of billions of tons would have to be pumped on an annual basis in order for the procedure to have any effect on reducing emissions).
Publicly-owned electric utilities also include the Electric Authority, which is usually a nonprofit corporation established as a joint action agency to generate and provide wholesale power to municipally-owned electric systems (public utility / distributors, who also own and operate local substations and transmission lines). Similarly, there is also the State Power Authority, which is usually a state-owned, non-profit, public-benefit power organization that owns and operates generating facilities and high voltage transmission lines, and provides lowest-cost electricity within the state to distributors and cooperatives.
| Existing Capacity by Producer Type (2008) (Megawatts) |
||||
|---|---|---|---|---|
| Producer Type | Number of Generators | Generator Nameplate Capacity | Net Summer Capacity | Net Winter Capacity |
| Electric Power Sector | ||||
| Electric Utilities | 9,371 | 632,923 | 584,908 | 603,610 |
| Independent Power Producers | 5,344 | 395,594 | 359,044 | 373,888 |
| Total | 14,715 | 1,028,517 | 943,951 | 977,497 |
| Combined Heat and Power Sector | ||||
| Electric Power | 654 | 42,937 | 37,309 | 40,274 |
| Commercial | 639 | 2,593 | 2,312 | 2,407 |
| Industrial | 1,650 | 30,439 | 26,599 | 28,134 |
| Total | 2,943 | 75,969 | 66,219 | 70,815 |
| Total All Sectors | 17,658 | 1,104,486 | 1,010,171 | 1,048,313 |
| Source: www.eia.doe.gov/cneaf/electricity/epa/epat1p3.html | ||||
The generation segment of the electric power industry is the whoelsale market, and this is where competition was promoted in the U.S. through deregulation. The profit motive is supposed to be responsible for making electric power generating facilities as efficient as possible, hence lower wholesale electricity prices. Secondly, private ownership is supposed to shift the operating financial risks away from the utilities’ ratepayers and to the shareholders. Conversely, the shareholders receive a steady dividend payment stream. Market pricing is also supposed to clearly indicate to generating facilities which market or region has sufficient capacity and which market or region may require additional capacity investment.
Companies that construct electric power plants typically expect the plant to operate for 30 to 50 years. Electricity can be sold by the generating facility owners into the markets administered by the regional ISOs / RTOs (see below), directly to a utility or to an energy service company (ESCO; see below), which are both Load Serving Entities (LSEs). If the plant is designed as base load generating facility then the owners tend to seek a long-term fuel supply contract and a long-term, bilateral power sales contract with another utility, wholesalers and commercial buyers, or distributor (retail delivery).
Byproducts
The use of coal as a fuel source to power generators often results in the creation of ash and slag byproduct, both which have commercial value and can be sold to increase the revenues earned by the power plant.
| Transmission & Power Grids |
In the United States and in many other nations, electric power is transmited and distributed over an electro-mechanical grid system. The grid system consists of electricity production plants, sub stations, transformers and thousands of miles of high voltage electric transmission lines.
Transmission line capacity for bulk power transmission is measured in kilovolts (kV). Transmission line capacity varies from 345 kV to 499 kV, 500 kV to 699 kV, 700 kV to 799 kV, 1,000 kV (DC). Large new lines (in excess of 100 miles) have a capacity of 765 kV and require less right-of-way compared to several of the smaller 345 kV lines. According to the U.S. Department of Energy, Office of Electricity Delivery and Energy Reliability, the United States operates approximately 157,810 miles of high voltage (voltage greater than 230kV; 98% AC lines / 2% DC lines) electric transmission lines.
Transmission does not mean that a clearly identifiable and quantifiable amount of electricity (MW / Megawatts) is generated at a power plant and sent a quantifiable distance directly through power lines to a specific utility / distributor, and that specific electricity is used solely by the utility's customers. What transmission really means is that the power generating facility generates and transmits a specific amount of electicity for a specific length of time into one part of the grid, a pool of electricity exists, and a utility withdraws a specific amount of electricity for a specific length of time from another part of the grid. The supply of electricity coming into the grid (generation) and the demand for electricity at any given time (load) must be balanced (load balance) at all times because a substantial imbalance would result in the collapse of the grid (blackout).
However, there can be congestion (delivery problems or constraints) in the electricity transmission grid because transmission lines may not have enough capacity (thermal limits on lines or voltage limits on buses) to carry all the electricity generated and/or required to meet the demand at a specific location. Thus, a series of separate transmission line interconnections may be necessary for a utility / distributor to access all of the electricity it requires to meet is base and peak loads. In addition, transmission of power over wires encounters resistance, the measure of how easily electrical current flows through a substance, and resistance creates losses in the system.
Interconnections
The Eastern Interconnection encompasses the entire eastern, southern and central United States and eastern Canada. The territory includes includes the states of North Dakota, South Dakota, Nebraska, Kansas, Oklahoma, a small portion of Texas (and all states to the east) as well as Saskatchewan and Canadian provinces to the east. This territory also includes the NERC reliability regions within FRCC, MRO, NECC, RFC, SERC and SPP (see below).
The Western Interconnection encompasses the the states of Washington, Oregon, California, Idaho, Nevada, Utah, Arizona, Colorado, Wyoming, portions of Montana, South Dakota, New Mexico and a portion of Texas, the Canadian provinces of British Columbia and Alberta in Canada, and a portion of CFE's system in Baja California in Mexico. This territory also includes the NERC reliability region within WECC (see below).
The Texas Interconnection encompasses a large geographic area of the State of Texas and ERCOT (see below).
As indicated above, each of the 3 continental grids function on different frequencies (all approximately 60 Hz) in order to isolate any potential widespread problems. Electricity transfer between any two of the Interconnections, which does happen commercially, can only be accomplished through special alternating current/direct current/alternating current (AC/DC/AC) tie converter stations. These converter station ties include the Miles City Tie in Montana, the Rapid City Tie in Western South Dakota, the McNeill Tie in Western Saskatchewan, Canada, the Blackwater Tie and the Artesia Tie, both in Eastern New Mexico, the Stegall Tie located southwest of Scottsbluff, Nebraska, and the Sidney Tie (also referred to as the Virginia Smith converter station) located just north of Sidney, Nebraska.
The Tres Amigas project is a proposal to utilize superconductor electricity pipelines to link the 3 continental interconnections near Clovis, NM. The pipleines are really direct current (DC) superconductor power cables powered by AMSC high temperature superconductor (HTS) wire and high-powered voltage-source AC/DC power converters (built by American Superconductor Corp., who has already installed one of the cables for National Grid on Long Island, NY). Tres Amigas will also function as a power market hub, enabling the buying and selling of electricity between the nation’s three Interconnections, which does not exist today, and will also allow for the transmission of electricity form renewable source to be transferred between regions.
The U.S. grid also interconnects with Canada: Ontario Independent Electricity System Operator (IESO), Alberta Electric System Operator (AESO), Hydro Quebec.
The U.S. grid also interconnects with Mexico through transmission facilities of San Diego Gas & Electric Company (SDG&E), El Paso Electric Company (EPE), Central Power and Light Company (CPL), and the Comision Federal de Electricidad (CFE), the national electric utility of Mexico.
Reliability Councils
Within the 3 continental grids there are eight regional electric reliability councils under NERC's authority:
Source: Bouchecl
Balancing authorities within each council are responsible for managing the minute-to-minute supply/demand balance for electricity within their borders to assure reliability. Each one of the regional electric reliability councils maintain an Open Access Transmission Tariff (OATT), which is the fixed cost to transmit power within the respective system.
The Midwest Reliability Organization (MRO) was formed on January 1, 2005, as the successor to the Mid-continent Area Power Pool (MAPP). The council's territory includes all or part of the states of Minnesota, North Dakota, Nebraska, Montana, South Dakota, Iowa, Wisconsin, the Upper Peninsula of Michigan, and the Canadian provinces of Saskatchewan and Manitoba. Within the MRO are 4 DC ties between the Eastern interconnection to the Western Interconnection.
The Northeast Power Coordinating Council (NPCC) was formed January 19, 1966, as the successor to the Canada-United States Eastern Interconnection (CANUSE). The council's territory includes all of the states of Maine, Vermont, New Hampshire, Massachusetts, New York, Connecticut, Rhode Island, and the Canadian provinces of Ontario, Québec, New Brunswick, Nova Scotia and Prince Edward Island.
The ReliabilityFirst Corporation (RFC) was formed on January 1, 2006 from the merger of ECAR, MAAC, and MAIN. Some MAIN members joined ReliabilityFirst, others joined Midwest Reliability Organization (MRO) and the Southeastern Electric Reliability Council, Inc. (SERC). The council's territory includes all of the states of Pennsylvania, New Jersey, Delaware, Maryland, West Virginia, Ohio, Indiana, and portions of the states of Wisconsin, Michigan, Illinois, Kentucky and Virginia.
The Southeast Electric Reliability Corporation (SERC) was formed on April 29, 2005. The council's territory includes all or part of the states of Missouri, Alabama, Tennessee, North Carolina, South Carolina, Georgia, Mississippi, and portions of Iowa, Illinois, Kentucky, Virginia, Oklahoma, Arkansas, Louisiana, Texas and Florida. SERC’s current subregions are Central (formerly the TVA Subregion), Delta (formerly the Entergy Subregion), Gateway (in 2006, SERC membership expanded to include several members in the central part of the country), Southeastern (formerly Southern Subregion) and VACAR (Virginia - Carolinas Reliability Agreement).
The Southwest Power Pool, Inc. (SPP) was formed in 1941, incorporated in 1994, and was granted RTO status in 2004. The council's territory includes all of the states of Kansas and Oklahoma, and parts of the states of Nebraska, Missouri, Arknasas, New Mexico, Texas, and Louisiana. Within the SPP are both of the DC ties to the ERCOT Texas Interconnection and several of the DC ties between the Western Interconnection and the Eastern Interconnection.
The Western Electricity Coordinating Council (WECC) was formed on April 18, 2002, from the merger of the Western Systems Coordinating Council (WSCC), the Southwest Regional Transmission Association (SWRTA), and the Western Regional Transmission Association (WRTA).
Regional Transmission Organizations (RTO) / Independent System Operators (ISO)
There can be several hundred power plants within a ISO system who are scheduled to provide power on any given day. The ISO / RTO are supposed to provide non-discriminatory transmission access within the continental United States. An ISO manages its respective system by notifying (dispatches) each plant in order, starting with the power plant that submitted the lowest supply offer. Simultaneously, the ISO schedules the delivery of electricity through the high-voltage transmission lines. An ISO is only concerned with the participants and voltage level within its immediate system (there are interconnections between each participant in a regional ISO, and there are also continental bulk power connections between ISOs). The ISO / RTO also constantly checks its respective system to determine whether there is sufficient power avaliable for the hourly forecast of electricity consumption (load balance).
The Califronia ISO (CAISO) encompasses most of Califronia and a portion of Baja California (Mexico) and is divided into 3 zones: NP-15, ZP-26, SP-15.
The Electric Reliability Council of Texas (ERCOT) is divided into 4 regions: North, South, West and Houston.
The Midwest ISO (MISO) encompasses all or most of the states of North Dakota, South Dakota, Nebraska, Minnesota, Iowa, Wisconsin, Illinois, Indiana, Michigan and parts of Montana, Missouri, Kentucky, and Ohio. Hubs include Cinergy, First Energy, Illinois, Michigan, Minnesota.
The New England ISO (NE-ISO) encompasses the states of Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont. Massachusetts is also divided into Northeastern Massachusetts/Boston (NEMA), Southeastern Massachusetts (SEMA) and Western/Central Massachusetts (WCMA).
The New York ISO (NYISO) is confined within the State of New York and is divided into 11 zones: Capital (Zone F), Central (Zone C), Dunwoodie (Zone I), Genesee (Zone B), Hudson Valley (Zone G), Long Island (Zone K), Millwood (Zone H), Mohawk Valley (Zone E), New York City (Zone J), North (Zone D), West (Zone A).
The PJM Interconnection (PJM) encompasses all or most of the states of Delaware, Illinois, Indiana, Kentucky, Maryland, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. PJM is divided into 3 zones: PJM West Region, the PJM South Region / VACAR Control Zone, and the MAAC Control Zone. The PJM West Region is the aggregate of the Zones of Allegheny Power; Commonwealth Edison Company (including Commonwealth Edison Co. of Indiana); AEP East Operating Companies; The Dayton Power and Light Company; and the Duquesne Light Company. The VACAR Control Zone is the transmission facilities of Virginia Electric and Power Company. The MAAC Control Zone is the aggregate of the zones of Atlantic City Electric Company, Baltimore Gas and Electric Company, Delmarva Power and Light Company, Jersey Central Power and Light Company, Metropolitan Edison Company, PECO Energy Company, Pennsylvania Electric Company, Pennsylvania Power & Light Group, Potomac Electric Power Company, Public Service Electric and Gas Company and Rockland Electric Company.
Power Marketing Administrations
The purpose of the power marketing administrations is to provide low-cost electricity (and related services including transmission) generated by hydroelectric power plants constructed wwihtin their respective regions. The wholesale power customers of these entities include cities and towns, rural electric cooperatives, public utility and irrigation districts, Federal and state agencies, investor-owned utilities, power marketers and Native American tribes.
In the United States, the combined grid system has become unreliable in in supplying electric power due to several factors such as aging equipment, the presence of transmission bottlenecks, the effects of deregulation and regulatory change, and jurisdictional issues associated with the numerous stakeholders who control, regulate or impact parts of the grid (approximately 200,000 miles of power lines is owned by several hundred entities). In recent years, these factors have combined to discourage private sector investment in upgrading the nation's grid and in developing new transmission and distribution-related technologies. During 2003 / 2004, the 3 main grids began to have sensors installed under the Phasor Project, which will allow monitoring offices to rapidly pinpoint problems and isolate problems so that there is no repeat of a system-wide shutdown similar to which occurred in August 2004. The maintenence of electricity generation and transmission is substantial as every year there is the need for the replacement / addition of turbines, rehabilitatation or construction of distribution substations, rehabilitattion of the transmission network(s), and installation and restoration of generators.
In the United States, the Federal Energy Regulatory Commission (FERC) regulates interstate transmission service provided by transmission-owning public utilities.
As part of the proposed construction and increase of renewable energy resources (solar and wind), the U.S. would also need to construct additional transmission capacity to move power generated in rural area locations to the existing power grid or to metropolitan areas. The new grid infrastructure would also need to be designed to handle the fluctuating power level associated with solar and wind generation. In addition to the cost of the project is the related right-of-way access requirement in order to construct new transmission lines. In April 2009, the FERC approved transmission infrastructure investment rate incentives for a proposed 3,000-mile / 765 kV transmission network designed to deliver wind-powered renewable energy from North Dakota, South Dakota, Minnesota and Iowa to consumers in and around Chicago, Minneapolis and southeastern Wisconsin.
OASIS
In the United States, Open Access Same-Time Information System (OASIS) is an interactive website for transmitting utility information to customers in accordance with the Federal Energy Regulatory Commission's Rule 889 (1996; requires all IOUs to participate in and OASIS). These websites allow participants to post bids or offers for energy and see information regarding system demand forecasts, transmission outage / capacity status, and market prices.
In Europe, these entities are sometimes referred to as a Transmission System Operator (TSO). The European Network of Transmission System Operators for Electricity (ENTSO-E) is the single coordination agency for the TSOs (there were originally 6 predecessor associations: ATSOI, BALTSO, ETSO, NORDEL, UCTE and UKTSOA) as Europe has effectively been operating as a single interconnected system since 2007. There are still separate, direct current (DC) lines between several regions because power flows on them can be more easily controlled than AC lines but still allow power transfer to occur between regions.
In Australia, the AEMO (Australian Energy Market Operator) operates the the National Electricity Market (NEM). The NEM operates the Australian interconnected power system that runs for more than 5,000 kilometres from Port Douglas in Queensland to Port Lincoln in South Australia. The NEM interconnects five regional market jurisdictions including Queensland, New South Wales, Victoria, South Australia and Tasmania.
| Distribution |
Distribution is providing electrical power to local communities and individual customers, which is performed by the local electric company / utility who may also have electricity generating capabilities. Electricity is transmitted from power generating stations for miles along the transmission lines. Once the electricity reaches a point of distribution a transformer the steps down the voltage for local distribution lines. A local transformer (located on poles or buried in residential neighborhoods) steps down the voltage a final time (115KV) before the eletrical current enters a household. the connection to each individual residential and commercial consumer is metered to record actual usage. The local distributor may also have available secondary voltages such as 120/240 V 1 phase, 120/240 V 3 phase, and 120/208 V 3 phase. In older sections of the nation, electrical distribution lines are located above ground and elevated on poles. In newer residential construction areas in the United States, electrical distribution lines are buried. However, burying distribution lines cost more and it is more difficult to inspect and maintain buried lines.
Local distributors are either private investor-owned utitlities (IOU), not-for-profit municipally-owned electric systems (public utility / service provider / electric cooperative, who may also own and operate generation facilities, local substations and transmission lines), and who may purchase power from a local Electric Authority, which is usually a nonprofit corporation established as a joint action agency to generate and provide wholesale power to the municipality or group of municipalities (utilities that do not own power plants are customers of the wholesale electricity market). Utilities are regulated by local, State, and Federal authorities, and in the case of many electric cooperatives, by their Board of Directors.
In states that have been deregulated, which is California, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island and Texas, consumers have the option to select the company that will provide electricity to a residential or commercial property. These companies, known as retail power marketers, Energy Supply Companies (ESCOs), Retail Energy Marketers (REMs), Retail Energy Suppliers (RES), and Retail Energy Providers (REPs) buy and sell electricity, but usually do not own or operate generation, transmission, or distribution facilities. These companies usually must apply for a Competitive Supplier and Electricity Broker License in the state that they operate. A company that is licensed as a Load Serving Entity (LSE) in a deregulated state is authorized to purchase power in the wholesale markets for large customers and deliver it to their retail meters. The purpose of the Retail Marketers existence is to offer a selection of electricity suppliers to the individual consumer. Thus, if one retailer negotiates a better supply contract with a power generating company than another retailer then the end-user / consumer has the opportunity to purchase their electricity from the retailer with the more advantageous pricing. In many deregulated states, monthly utility billing has been divided into two charges, delivery services and supplier services, in order for customers to select an electricity supplier and see the actual per kWh cost of the power only.
Aggregation is a process by which several communities (or any group of retail customers) combine their residents into a single large buying group, which then attempts to negotiate a favorable kWh rate from a generator, wholesale marketer, retail marketer or existing utility. However, residents within the municipalities must be offered an opt-out option if they want to remain with their existing service.
Most residential properties in the United States have two incoming voltage lines: 120 volts for lighting and appliance circuits and 240 volts for larger air conditioning and electric dryer circuits. Electricity only flows when a switch is placed in an "ON" position and a circuit is completed. Most lighting and wall socket circuits in a residential property are 15 amp circuits, while most electric dryers and air conditioners require larger 30 amp circuits.
An electric meter registers the number of kilowatt hours used by a residential or commercial customer. There are two kinds of electric meters: the older dial meter and the newer digital meter. The digital meter is similar to the mileage odometer in an automobile: every time the number increases another kilowatt hour of electricity has been consumed.
Electric Company / Utility Operation Credit Issues
Smart Grid
The most recent development in the Transmission / Distribution segment is the proposal of the Smart Grid, which
esentially means
The first problem, and the major credit analysis issue, is who should / will pay for the installation of Smart
Grid hardware and software?
A second important, and related issue, is interoperability of the hardware and software. Which standards should be utilized and will there be any unforseen problems that may render an investment useless or impacted?
Another issue related to the application of network information systems to the electrical grid is the issue of security. Electrical systems can be remotely accessed by computer over the Internet, which means that unauthorized persons can access and compromise the control of the system in order to purposefully disrupt electrical power transmission (not just the United States but any nation). In the United States, the integrity of any Smart Grid network is covered under the Federal Cybersecurity Act.
Another issue related to the implementation of Smart Grid infrastructure is that of privacy: will information (power usage / consumption, appliances, etc.) be stored and if so, how will it be stored and who will have access to it? Will it be provided to marketers?
Initial projects in the United States include:
Utility / Distributor / Retailer / ESCO
| Regulation |
United States
The U.S. Department of Energy forecasts that U.S. electricity consumption will grow by more than 30% over the next two decades (while the use of natural gas to produce electricity will increase by nearly 60%). For the majority of the twentieth century, the electric power industry in the United States was dominated by regulated monopoly utilities. The United states has been deregulating the electricity market and shifting away from vertically-integrated, publicly-owned utilities to privatizing segments of the industry. In the past 3 decades, the U.S. Congress has passed legislation to promote competition in wholesale electric power markets by either lowering entry barriers, increasing transmission access, or both. The purpose of the deregulation was to create a more efficient use of of capital and infrastructure, encourage expansion of capacity and the delivery of less expensive energy to end users. One of the most important developments was "unbundling", or the separation of transmission, generation, distribution, and marketing activities.
In the United States, 24 states plus the District of Columbia originally enacted enabling legislation or issued a
regulatory order to implement retail access to their respective electricity markets. The states that have been
deregulated include Arizona, Arkansas, California, Connecticut, Delaware, Districit of Columbia, Illinois, Maine, Maryland,
Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon,
Pennsylvania, Rhode Island, Texas, Virginia and West Virginia. In the retail / consumer market in these states, deregulation has meant that
consumers have been given the opportunity to purchase electric power from competing electricity suppliers, which is supposed
to result in lower prices. The states of Arizona, Arkansas, California, Montana, Nevada, New Mexico, Oregon, and Virginia
essentially repealed or delayed deregulation after having initially approved legislation and then experienced problems
or reviewed the problems incurred by other states.
Status of Electricity Restructuring by U.S. State (Energy Information Administration):
www.eia.doe.gov/cneaf/electricity/page/restructuring/restructure_elect.html
In the United States, the Federal Energy Regulatory Commission (FERC) is responsible for the approval of rates for wholesale sales of electricity and transmission in interstate commerce for jurisdictional utilities, power marketers, power pools, power exchanges and independent system operators.
Overall, regulation of public power systems varies from state to state within the United States. In some States, the public utility commission exercises jurisdiction in whole or part over operations and rates of publicly owned systems. In most States, public power systems are regulated by local governments or are self-regulated. Municipal systems are usually governed by the local city council or an independent board elected by voters or appointed by city officials. Other public power systems are operated by public utility districts, irrigation districts, or special State authorities. Please see the List of State Public Service Commissions below.
Generation operations are usually subject to regulation by the local state public utility commission (PUC), Federal Energy Regulatory Commission (FERC), the Nuclear Regulatory Commission (NRC), the Environmental Protection Agency (EPA), the Department of Energy (DOE), the Army Corps of Engineers and other federal, state and local authorities.
Transmission rates, tariffs and terms of service are usually subject to regulation by the local state public utility commission (PUC), and the Federal Energy Regulatory Commission (FERC).
Distribution (retail electrical service) rates are usually subject to regulation by the local state public utility commission (PUC). The FERC has no authority over retail pricing of electricity at the consumer level.
A utility may not construct or incur financial commitments for construction of any substantial generating facilities or large capacity transmission lines without the prior approval of various state and federal government agencies. In addition, PUC's also regulate transactions between affiliates, transfers of certain facilities and issuance of securities.
Has deregulation been successful within the United States? Competition is supposed to reduce prices if an unlimited number of producers can step into the market easily. However, in the electricity market, the cost to enter a market is high: the construction of an electricity generating facility is expensive and has a long lead time to obtain approval and then be constructed.
European Union
The Energy Community Treaty became effective July 2006.
Spain
Electricity pricing (tariffs) is heavily regulated in Spain such that the generating companie sell it at a price below the cost of actual production, even while consumption has been increasing. The Spanish National Energy Commission (CNE) reported in 2008 that the government subsidized deficit amounted to €14 billion in fiscal 2008.
| Wholesale Electrical Power Pricing & Electricity Trading |
A power company is a base load (cumulative electric demand of a geographic area or an electric utility, usually measured in megawatts) serving entity, which means that it has to have sufficient electric power to provide service to its customers (load balance or supply equals demand). If the entity has a problem with a generator that goes off-line or there is greater demand than had been anticipated then the entity has a short-term balancing of base load requirement (needs additional electricity or balancing the load so that supply will equal demand). The requiement could be hourly or daily and may require spot purchase or negotiating a longer-term energy supply contract (Power Purchase Agreement / PPA).
Each one of the NERC reliability councils, ISO / RTO operators and several private operators represent an electricity trading hub / delivery point. Power plants and utilities operating within a regional transmission reliability organization often work together to create a power pool of available wholesale electricity (all of the power plants are indirectly connected to each other through the regional transmission grid and neighboring regional grid).
In the United States, the wholesale electricity market is a pool-based, short-term electricity market coordinated by a
system operator for the sale of electricity generated by a power plant / utility
to another utility, trader, supplier, aggregator or marketer. There are several types of transactions in the wholesale
market:
For instance, two power generators, or a generator and a utility or a generator and a supplier can enter into a bilateral, over-the-counter (OTC) contract, which specifies a defined quantity (electricity is all of the same "quality" as long as it maintains a steady voltage and frequency) has been sold by one party to another at a particular commercial node, zone or hub. All of these parties can also purchase electricity on a electric power exchange (see below). Throughout any single day, the wholesale price of electricity on the electric power grid reflects the real-time availablity and demand for electricity.
A Load Forecast Analyst (LFA) employed by a power generating company or distributor attempts to forecast all of its customer’s loads in their respective ISO / RTO Day Ahead Market. The forecast is based on developing a historical model of "day type" (predominant weather conditions during the day, which includes temperature, HDD, CDD, and precipitation) and demand during the day type by hour (every electricity market has a historical minimum base load and peak load; most markets have summer peak load, which can be as much as 3.5X minimum load), and then forecasting as to whether a similar "day type" is approaching and whether there will be any variance to the predictive model. Based on the forecast, the company will determine if it needs to purchase additional electricity to balance the load or whether it has excess electricity that it can sell.
Peak demand is usually highest in the afternoon and early evening (electricity usage is at a peak because it is the point when most people are awake, working or active, and then lights are turned on as the sundown approaches; Summer Peak means the addition of air conditioners being turned on), which means that prices are also higher at these times. There are several clearly identifiable points during a 24-hour period for which additional electricity may be required: morning peak, afternoon peak, evening peak, and off-peak. Off-peak hours are usually defined as an 8-hour evening period Monday through Friday, and then all hours on Saturday, Sunday and Federal holidays. Generating facilities, transmission facilities and distributors also sometimes have to purchase electricity to meet contingency reserve requirements (as high as 15.0% of base load).
Interstate sales of electricity on the wholesale market and by public utilities (investor-owned utilities, power marketers, independent power producers, and non-exempt electric cooperatives) are subject to regulation by the Federal Energy Regulatory Commission (FERC).
Aggregation, in the wholesale market, means that a trader attempts to amass a volume of electricity from several different sources in order to create a larger package.
The primary factor that influences the price of electricity is the cost and availability of fuel used for power generation and the cost of transmission necessary to deliver the electricity (tariffs).
As indicated above, the cost to generate electricity fluctuates daily and monthly depending on the mix of fuel, and when it was purchased, used by the generating facility. Overall, the long-term trend has been that electricity prices are increasing because fuel costs have been increasing: Coal price has increased from a 1999 average of $1.22 per Million Btu to $2.07 in 2008; Distillate fuel (No. 2) has increased from a 1999 average of $4.03 per Million Btu to $20.08 in 2008; Natual gas has increased from a 1999 average of $2.57 per Million Btu to $9.11 in 2008. In addition, natural gas prices have a greater impact on electricity prices as gas-fired generators are often used to generate peak demand load and these generators set the prices for a large percentage of the time in many short-term or spot purchased power markets. The prospects for new baseload coal plants being constructed is declining, and new baseload plants may wind up being natural gas-fired plants, which will add further demand on natural gas supplies and fuel pricing.
There is no specific type or brand that can differentiate electricity: once it is generated there are no identifying features to indicate the source (some utilities and marketers charge a premium at the retail level for electricity generated from "renewable" sources).
In the United States, the Intercontinental Exchange (ICE) exchange also offers over-the-counter (OTC) trading in Day Ahead markets in North American power.
Austria: Energy Exchange Austria (EXAA), offers spot market; spot market CO2; Clearing is handled by OeKB (Oesterreichische Kontrollbank AG).
Belgium: Belpex (Belgian Power Exchange), offers day ahead market (continuous day-ahead, intraday power market and green energy certificates exchange is scheduled in 2008).
Benelux: European Energy Derivatives Exchange N.V. (ENDEX), offers Dutch and Belgian power contracts.
Germany: European Energy Exchange AG (EEX) includes EEX Power Spot, EEX Spot Markets and EEX Derivatives Market.
India: Indian Energy Exchange (IEX), offers day ahead market with double-sided closed, hourly and block order, scheduling and transmission capacity reservation support, daily settlement and secured payment; Operated by Financial Technologies (FTIL) and Power Trading Corporation (PTC).
Italy: Gestore Mercato Elettrico (GME), offers day ahead market; adjustment market; ancillary services market.
Netherlands: APX Power NL offers day ahead market; intraday market; Strips market.
Norway: Nord Pool ASA (Nordic Power Exchange) is owned by the two national grid companies, Statnett SF in Norway (50%)
and Affärsverket Svenska Kraftnät in Sweden (50%), and offers hourly (Elspot) and continuous power trading 24 hours a day,
7 days a week covering individual hours, up to one hour prior to delivery (Elbas).
United Kingdom: APX Power UK offers futures market; day ahead market; intraday market; half hour, 2 hour 4 hour blocks; rolling 2 days; rolling 7 days; clearing services for the APX Power UK Spot Carbon contract.
United States: The Energy Authority is the trading platform used by 39 public power utilities in the U.S., and provides hourly bilateral trading, day-ahead and Term bilateral trading, forward bilateral trading.
Wholesale power marketers take title to deregulated, wholesale electric power from electric power generators and then offer to sell such electric power directly to other utilities or to retailers (they also assist companies that generate electricity to market their electricity). These companies are also known as Aggregators, which are electric power traders who want to locate both supply and demand customers to create a load, purchase power in bulk, and earn a commission or spread on the sale.
A wholesale marketer can also be an unregulated subsidiary of a electricity generating company.
| Electricity Futures Market |
United States
The central issue with regard to a futures market for electrical power delivery is that electricity is a commodity that cannot be stored. Rather, electricity must be generated at approximately the same time it is being consumed.
In the United States, electricity futures contracts are quoted and traded on the CME Group member exchange New York Mercantile
Exchange / NYMEX (open outcry / pit trading); CME ClearPort (traded off-exchange for clearing only). The PJM Western Hub Peak Calendar Month Real Time LMP Swap futures contract offers opportunities for risk
management of electricity pricing in the Midwest, New York State, and other areas in the mid-Atlantic states.
The CME Group / New York Mercantile Exchange (NYMEX) ClearPort platform also provides traders with the opportunity to purchase and sell electricity contracts in units of dollars and cents per megawatt hour off the exchange (but clear them through the exchange through ClearPort). These electricity futures contracts are not for fixed quantities because the number of on-peak and off-peak hours can vary from month to month. Thus, the total quantities of power represented by most of the electricity contracts are variable.
The contracts are for the on-peak and off-peak periods as defined by the North American Electric Reliability Corporation (NERC), the power industry’s operations coordinating group. The electricity is from Regional Transmission Organizations (RTO) / Independent System Operators (ISO).
Monthly electricity options contracts are listed for PJM, ISO-New England, AEP Dayton, Cinergy and Northern Illinois.
Europe
Australia
The d-cyphaTrade ASX Australian Electricity Futures and Options contracts are traded on the Australian Securities Exchange (ASX).
| Wind Power |
Please see the separate page on Wind Power Industry and Market.
| Solar Power |
Please see the separate page on Solar Power Industry and Market.
| Ocean Generated / Wave & Tidal Power |
Ocean generated power refers to equipment either floating on or submersed below the ocean's surface, which use the physical movement from waves or tide level to generate electricity.
One design of wave power generation utilizes a modular, ocean-going buoy, which rises and falls with the waves, which in turn moves hydraulic fluid within the buoy. The motion of the hydraulic fluid is used to pump a generator, and the electricity is then transmitted to shore over a submerged transmission line.
One design of tidal power generation utilizes the flow velocity of the tide by placing an upright structure within a bay or estuary area. The structure contains an axial turbine that will turn in either direction in which the tide is moving, and the electricity is then transmitted to shore over a submerged transmission line. The tide is a very predictable source however it needs to have a strong enough flow to make the turbine revolve.
| Nuclear Power |
CME Group / NYMEX Uranium U308 Futures Contract
There are 104 nuclear reactor powered electricity generating facilities in the United States, which supply approximately 5.0% of the electricity generated in the U.S. Nuclear reactors are especially desirable because:
The Nuclear Energy Institute indicates that U.S. nuclear power electricity production generated a record 806 billion kWh (approximate) in 2007.
The Nuclear Energy Institute further indicates that the nation of France as the highest percentage of electrical power produced by nuclear reactor powered generating facilities: 59 facilities produce approximately on average 78.0% of France's electricity supply. South Korea has the second highest concentration: 19 facilities produce approximately on average 40.0% of the nation's electricity supply.
Quite a number of nuclear reactors operating within the United Kingdom were constructed during the 1950s, and nuclear reactors of the Magnox design (11 stations) are now obsolete and being decommissioned. A number of the newer gas cooled design nuclear reactors are then secheduled to commence decommission in 2015. www.nda.gov.uk/
The most simple description of the operation of a nuclear reactor powered electricity generating facility is that heat is released from the controlled decay of U-235 (enriched uranium) within the reactor infrastructure. The controlled chain reaction is known as nuclear fission, which means that the uranium nuclei separates when bombarded with neutrons. As the nuclei separates the neutrons released bombard another uranium atom causing another decay / separation, and as the self-perpetuting chain reaction continues the heat is released during the separation of the nuclei. The chain reaction continues until the uranium is depleted (there are insufficient neutrons remaining to keep the process going thus new uranium fuel must be added to the reactor; fuel rods need to be replaced in approximately 18 months). That heat is used to turn water into super-heated, pressurized steam, which is then applied to the fan blades of the turbine, which then revolves the shaft / rotor to generate electricity.
Only Pressurized Water Reactors (PWRs) and Boiling Water Reactors (BWRs) are in commercial operation in the United States. These plants have been operating for just over 2 decades now without a serious problem occurring. The problem with nuclear reactors though is the potential for a melt down, gas release or explosion that would contaminate the surrounding countryside with radioactive material. The second major problem is the storage of nuclear waste literally for thousands of years. It also takes time and a substantial investment to construct a nuclear power facility (the last large nuclear reactor project constructed in the United States was in 1996).
The most serious problem in the United States with regard to a nuclear reactor powered generating facility was at Three Mile Island in 1979 when a reactor failed and there was radiation leakage within a containment building.
Nuclear waste (depleted uranium from spent fuel rods) can be reprocessed to extract uranium and plutonium that can be utilized for energy or medical application.
In response to the increased interest in nuclear power, there has been the proposal for the authorization of mini-reactors that are constructed in a factory and then brought to a site as a less expensive alternative than the standard 1,000 Megawatt structure. Rather, the introduction of a 25 to 125 Megawatt, Light Water Reactor nuclear power plant is being propsed as a path for the United States to increase electricty generating capacity (a 45 Megawatt unit is estimated sufficient to generate electicity to power approximately 45,000 U.S. residences). Not only is money saved in the construction process but the units will also utilize standard steam turbines, generators and condensers, which reduces costs in the manufacturing process. Another advantage is that several units could also be linked together to increase baseload generating capacity. (No commercial mini-reactors are presently in operation in the United States as they have not been certified by the Nuclear Regulatory Commission).
In 2007, NRG Energy applied for a license with the Nuclear Regulatory Commission to construct a new nuclear reactor powered electricity generation facility.
In response to the renewed interest and promotion of nuclear power as a "clean" alternative to coal fired plants, the price of uranium (U308; concentrated uranium oxide produced from uranium ore, also known as yellowcake) has been increasing steadily over the past few years. The price has increased from a low of $10.30 per pound in January 2003 to $84.00 per pound as of October 2007, touching a high of $138.00 per pound in July 2007. The primary sources for newly mined uranium (U-238) are Canada, Russia and Australia.
Nuclear power manufacturing / generating companies:
Locations of Operating Nuclear Power Reactors in the United States www.nrc.gov/info-finder/reactor/
New Reactor Regulation (NRC) www.nrc.gov/reactors/new-reactors.html
New Reactor Licensing Applications www.nrc.gov/reactors/new-licensing/new-licensing-files/new-rx-licensing-app-legend.pdf
| Distributed Generation |
Distributed Generation (also referred to as on-site generation or dispersed generation) means that small electricity producing generators are located near power consumption. Grid-connected photovoltaic and wind electricity generating systems located on commercial and residential properties allow these properties / buildings to become electricity providers to the local / regional electrical grid network. As indicated above, the conventional infrastructure for electricity generation is that a large generating plant produces a large volume (gigawatts) of electricity and then transmits the electricity for widespread distribution. Distributed generation reverses that concept by allowing small electricity generating equipment (residential / commercial real estate PV system, residential wind turbine, residential / commercial real estate fuel cell, natural gas / propane microturbine, small commercial solar park / wind turbine park) to either provide some of the electricity (kW to MW) consumed by the residential or commercial property, or transmit into the grid from the distribution edge, usually through the stimulus of a feed-in-tarrif or net metering agreement.
The growth of distributed generation is a potential threat to the base rate of generating companies / utilities. In response, some companies are trying to own the renewable energy / distributed energy generating capacity. One way is to offer solar panels to eligible customers on a common feeder line. The customer has no upfront fee as the company employs the contractor to conduct the physical assessment of the customer's property and if roof direction, age and structural integrity is acceptable then the company installs the equipment and the customer signs an easement, allowing the company access for panel installation and maintenance. The customer then pays for the electricity at a community rate, which is lower than the base rate. This way the company fulfills the requirement to increase capacity from a renewable energy source but retain ownership of the infrastructure and retain pricing control. Another alternative is to eliminate utility incentive payments and price supports to private installers and customers and have the utility use those funds to complete a widespread installation of PV systems within municipal areas on residential and commercial real estate rooftops, public buildings rooftops, schhols and campus rooftops, parking lots and unused rights of way. However, in March 2009, voters in California defeated Measure B, which would have allowed the Los Angeles Department of Water and Power to commence such a program, in the belief that private competition would keep installation prices down and challenge any monopoly the utility would have over electricity generation and pricing.
Overall, distributed generation does increase capacity, especially during peak demand hours. However, due to the solar and wind power's intermittent generation problem there will always have to be a conventional base load electricity generating capability.
| Consumers / Retail Market |
In 2007, electricity sales totaled approximately 3,765 Billion Kilowatthours (kWh) in the United States. Use of
electricity for each of the major consuming sectors:
The Energy Information Administration (U.S. Department of Energy) indicates that in 2007 in the United States, the average monthly residential electricity consumption was 936 kilowatthours (kWh).
The Energy Information Administration (U.S. Department of Energy) has indicated that U.S. electricity consumption is projected to increase at an annual average rate of 1.50% through 2030 (approximately 30% in the next 2 decades). Residential, retail consumers have steadily shifted electricity consumption away from space heating and water heating toward appliances, consumer electronics / personal digital appliances and air conditioning. However, the demand for electric power has not translated directly into higher household expenditures as household income growth has outpaced the price increase in electricity.
In the United States, deregulation of the electricity utility industry means that the consumer is supposed to have an opportunity to select an electric power provider from among public and private power companies, cooperatives, energy supply companies (ESCOs) and retail energy marketers (REMs). Consumers are divided into residential, commercial and industrial (and large commercial and large industrial). Historically, retail electricity rates had been based on the cost of providing traditional bundled electric service: the combination of transmission, distribution and generation services. Deregulation resulted that many operators had to "unbundle" services. This has meant that prices are now cost-based rates for transmission and distribution services (and also market pricing for generation services; utilities may own separate generating, transmission and distribution business operations). In deregulated states, base rates were capped during a period of transition.
In the United States, most retail residential consumers purchase electrical power from a local utility, distribution company or retail service provider. These retailers can be a not-for-profit municipal entity, an electric co-operative owned by its members, a private, for-profit company owned by stockholders (often called an investor-owned utility / IOU), or a power marketer (purchase wholesale power but owns no generation, transmission or distribution infrastructure).
Regulated utilities may not unilaterally increase retail rates to consumers. Rather, the utility must apply to the local public utility commission (regulatory agency) and file a rate case in order to increase rates to recover the costs of delivering electricity. A public hearing is usually held prior to the regulatory agency making a decision.
A gasoline-, diesel or natural gas-powered generator can be used to power all or a portion of a residential household load (usually used as a backup electricity source). A generator transfer switch is needed for individuals who wish to use an electric generator as a source of backup power for a home (or even a business). The switch literally switches the power source from the commercial power supply company to the local generator. The use of an independent generator is only viable based on the availability and price of the fuel source used to operate the generator.
CFL (Compact Fluorescent Light)
Internationally, consumers are being asked to no longer purchase and use incandescent light bulbs but now use spiral / compact fluorescent light bulbs / CFL and sub-compact CFL (the U.S. Congress passed legislation eliminating the usage of incandescent light bulbs by 2014). The fluorescent bulbs are promoted as utilizing less energy to operate and last longer than the traditional incandescent light bulb. One of the problems recently reported related to the spiral fluorescent light bulb is that they contain several milligrams of mercury as part of their construction. Hence, these light bulbs will require a planned recycling program for disposal rather than have them merely placed into general trash collection as incandescent light bulbs were in the past. Similarly, consumers need to be more cautious when cleaning up a broken spiral fluorescent light bulb.
A recent report issued by OSRAM GmbH (a company that manufactures lighting products) indicated that the next generation of Light Emitting Diode (LED) light bulbs provided real
energy savings (presently 5x more efficient than incandescent lamps as less energy is required to manufacture the bulb and the
bulbs function longer than the standard incandescent bulb).
OSRAM LED Life-cycle Assessment Report
Electric Automobiles
If electric (battery operated) automobiles become the primary automotive design in order to reduce carbon emissions and petroleum fuel dependancy then additional electicity generating capacity will be required to meet this new demand for automobile charging stations (either in the home and rental apartment or public streets and roads, or both). There are two types of automobile chargers. The Level 1 charger has a 120 volt outlet and the Level 2 charger has a 220 / 240 volt outlet. Both outlest require special cable that have to be connected to the automobile. The existing 8- to 10-kilowatt automobile battery requires approximately 6 to 8 hours to be recharged by the Level 1 charger and approximately 3 to 4 hours by the Level 2 charger (also known as a quick charger, a dedicated 220 / 240 volt line has to be professionally installed, which has to be inspected by a city or state inspector).
The battery size needs to be reduced in size and weight, and less expensive to manufacture: a lithium ion battery adds in excess of $10,000 to a manufacturer's cost. In addition, lithium ion batteries do not perform as well in cold weather as the cold termperature slows the chemical process of the battery.
Some automobile models capture energy from the brakes to recharge the battery. However, this design can actually reduce the speed of the automobile simply by removing one's foot from the accelerator.
| Electicity Generating Industry and Electricity Markets Information & Research Resources |
American Public Power Association www.appanet.org/
American Wind Energy Association (AWEA) www.awea.org/
Asociación Española de la Industria Eléctrica (UNESA) www.unesa.es/ (Spain)
Council of European Energy Regulators (CEER) www.energy-regulators.eu/
Edison Electric Institutie (EEI) www.eei.org/
Electric Power Research Institutie (EPRI) my.epri.com/
Electric Power Supply Asociation (EPSA) www.epsa.org/
Electric Reliability Council of Texas (ERCOT) / Texas Regional Entity www.ercot.com/
Electricity Consumers Resource Council (ELCON) www.elcon.org/
Energy Information Administration (EIA) www.eia.doe.gov/
Energy Regulators Regional Association (ERRA) www.erranet.org/
Federal Energy Regulatory Commission (FERC) www.ferc.gov/
Florida Reliability Coordinating Council (FRCC) www.frcc.com/
Industrial Energy Consumers of America (IECA) www.ieca-us.com/
Large Public Power Council (LPPC) www.lppc.org/
Midwest Reliability Organization (MRO) www.midwestreliability.org/
National Association of State Utility Consumer Advocates www.nasuca.org/
National Council on Electricity Policy www.ncouncil.org/
National Hydropower Association (NHA) www.hydro.org/
National Renewable Energy Laboratory (NREL), United States Solar Atlas mapserve2.nrel.gov/website/L48NEWPVWATTS/viewer.htm
National Rural Electric Cooperative Association (NRECA) www.nreca.org/
North American Electric Reliability Corporation (NERC) www.nerc.com/
Northeast Power Coordinating Council, Inc. www.npcc.org/
Nuclear Energy Institute www.nei.org/
ReliabilityFirst Corporation www.rfirst.org/
Southwest Power Pool, Inc. www.spp.org/
Western Electricity Coordinating Council www.wecc.biz/
U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy www.eere.energy.gov/
U.S. Department of Energy, Office of Nuclear Energy www.nuclear.energy.gov/
U.S. Department of Energy, Small Wind for Homeowners, Ranchers, and Small Businesses www.windpoweringamerica.gov/small_wind.asp
U.S. Department of Energy, U.S.-Canada Power System Outage Task Force, Final Report on the August 14, 2003 Blackout in the United States and Canada reports.energy.gov/
U.S. Department of Energy, Wind Powering America State Activities www.windpoweringamerica.gov/state_activities.asp
U.S. Department of Energy, Wind Resource Maps www.windpoweringamerica.gov/wind_maps.asp
U.S. Nuclear Regulatory Commission www.nrc.gov/
U.S. Senate Committee on Energy and Natural Resources www.energy.senate.gov/public/
Australia Energy Regulator (AER) www.aer.gov.au/
Canada Alberta Utilities Commission www.auc.ab.ca/
Brazil ANEEL (Agência Nacional de Energia Elétrica) www.aneel.gov.br/
New Zealand Electicity Commission www.electricitycommission.govt.nz/
Philippines Energy Regulatory Commission www.erc.gov.ph/
