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Products: Energy Policy & Planning Group

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Integrating Renewable Energy with Time Varying Pricing

With increasing adoption of intermittent sources of renewable energy, effective integration is paramount to fully realizing societal benefits. This study asks the question, how valuable is residential real-time pricing (RTP) in comparison to time-of-use (TOU) rates to absorb increasing sources of intermittent renewable energy? We couple a detailed power sector model with a residential electricity demand response model to estimate the system and consumer benefits of these two time-varying pricing mechanisms, including greenhouse gas emissions.

Working Paper


Integrating Renewable Energy: A Commercial Sector Perspective on Price-Responsive Load-Shifting

Price-based demand response is an important component to achieving Hawaii's 100% Renewable Portfolio Standard. This report provides a review of the impacts of time varying pricing programs for the commercial and industrial sectors. It presents commercial sector load patterns and rates for Oahu to gain insight into the potential impacts by sector of implementing time varying pricing mechanisms that would be more compatible with renewable energy integration than the existing rate structure.

UHERO Report

 


Governing Green Power: How Should Utilities of the Future Make Money?

This report summarizes a two-day conference that addressed how future electric utilities will make money, a question provoked by advances in renewable energy and other distributed resources that cast doubt on conventional regulatory and business models. Engagement with issues in all of the sessions was strong, giving expression to a wide range of observations, opinions and questions.

UHERO Report

 


Not All Regions Are Alike: Evaluating the Effect of Oil Price Shocks on Local and Aggregate Economies

Using a sample of 48 contiguous U.S. states for the period 1973-2013, we study how oil price shocks influence state-level economic growth. The analysis incorporates (1) a structural decomposition of the supply and demand factors that drive the real price of crude oil; (2) heterogeneity of states in terms of their production and consumption of oil and natural gas; and (3) economic spillovers across neighboring states. Oil price effects vary across states, depending on the underlying source of the price shock and a state's average production of oil relative to its average consumption. Oil-exporting states are more vulnerable to unanticipated changes in oil prices, and the direct effect of oil price shocks can magnify or temper effects on neighboring states. Aggregated predictions from the state-level model also differ modestly from stand-alone aggregate model (Kilian, 2009). The aggregated state-level model implies that the recent (2005-2016) decline in U.S. dependence on foreign oil reduced aggregate sensitivity to exogenous supply shocks by more than a third.

Working Paper


Who are Driving Electric Vehicles? An analysis of factors that affect EV adoption in Hawaii

This study uses data on EV registrations by zipcode in Hawaii to analyze a variety of demographic and transportation factors that might affect EV adoption. After controlling for population and gasoline prices, zip codes with higher income and educational attainment are associated with higher levels of EV adoption. Longer commute times also influence EV adoption – which is somewhat surprising given the relatively limited travel distances of an island geography. This suggests that there may be strong risk-aversion associated with EV range anxiety as well as prompts further study of the effect of trip-chaining on EV purchase decisions.

Working Paper


Variable Pricing and the Cost of Renewable Energy

On a levelized-cost basis, solar and wind power generation are now competitive with fossil fuels, and still falling. But supply of these renewable resources is variable and intermittent, unlike traditional power plants. As a result, the cost of using flat retail pricing instead of dynamic, marginal-cost pricing--long advocated by economists--will grow. We evaluate the potential gains from dynamic pricing in high-renewable systems using a novel model of power supply and demand in Hawai'i. The model breaks new ground in integrating investment in generation and storage capacity with chronological operation of the system, including an account of reserves, a demand system with different interhour elasticities for different uses, and substitution between power and other goods and services. The model is open source and fully adaptable to other settings. Consistent with earlier studies, we find that dynamic pricing provides little social benefit in fossil-fuel-dominated power systems, only 2.6 to 4.6 percent of baseline annual expenditure. But dynamic pricing leads to a much greater social benefit of 8.5 to 23.4 percent in a 100 percent renewable power system with otherwise similar assumptions. High renewable systems, including 100 percent renewable, are remarkably affordable. The welfare maximizing (unconstrained) generation portfolio under the utility's projected 2045 technology and pessimistic interhour demand flexibility uses 79 percent renewable energy, without even accounting for pollution externalities. If overall demand for electricity is more elastic than our baseline (0.1), renewable energy is even cheaper and variable pricing can improve welfare by as much as 47 percent of baseline expenditure.

Working Paper


Determinants of Residential Solar Photovoltaic Adoption

Hawaii is a leader in distributed solar photovoltaic (PV) adoption. It has the highest rate of PV-based electricity penetration in the U.S. and rivals global front runners. The policy impetus towards large-scale adoption of renewable energy comes from the Renewable Portfolio Standard, with a target of 40% net electricity sales from renewable sources by the year 2030 and 100% by 2045. Rooftop PV provides the largest share of renewable energy in Hawaii’s electricity generation portfolio. This study analyzes demographic factors related to residential PV system adoption in Hawaii. It provides an econometric analysis, augmented by maps, to better understand the demographic characteristics of households adopting PV systems. Understanding drivers of past uptake is important to gaining insight into future trends, particularly as Hawaii continues towards its 2045 RPS goal.

Working Paper


Governing Green Power: Realigning Institutions To Fit New Technologies

The “Governing Green Power” conference was held in Honolulu at the University of Hawai`i at Mānoa, March 28-30, 2017. The motivation for the conference was the recognition that energy technologies are changing faster than energy-related institutions — the organizational structures, market mechanisms, and regulatory incentives that govern power generation, transmission, distribution and storage. The complex system of the future that many of us envision — what some call Utility 2.0 — will require a carefully balanced infrastructure, dynamic price setting, and sophisticated automated control systems. How can this vision be achieved? How do the institutions that govern the electricity sector need to change to ensure that Utility 2.0 will be managed as fairly and efficiently as possible?

UHERO Report

 


Effect of Electric Vehicles on Design, Operation and Cost of a 100% Renewable Power System

This report outlines the effect that electric vehicles could have on the cost of transport and electricity production in the context of a 100% renewable power system (RPS). Results presented here were produced using the SWITCH power system planning model, configured to choose a least-cost plan to achieve 100% renewable power on Oahu by 2045, subject to a 5% limit on biofuel usage.

Working Paper


Electric Utility Regulation Under Enhanced Renewable Energy Integration and Distributed Generation

The economic environment for electric utilities is changing in the United States given increased penetration of distributed generation and limited rooms for sales growth. This paper reviews the recent development of relevant policies in the United States and their economic impacts. This review indicates both challenges and opportunities in improving the policies to enhance distributed generation, and in finding the directions in which electric utility regulation should be reformed.

WORKING PAPER


Estimating the Opportunity for Load-Shifting in Hawaii: An Analysis of Proposed Residential Time-of-Use Rates

Hawaii’s largest electric utility, Hawaiian Electric Company (HECO) and its subsidiaries recently proposed a Time of Use (TOU) pricing scheme for residential rates. The TOU scheme has three tiers of prices: daytime, on-peak, and nighttime. The proposed rates have the highest cost during the on-peak period from 5pm to 10pm. For Oahu, the lowest cost is at nighttime, from 10pm to 9am. The difference between high and low rates is $0.33/kWh. For Maui and Hawaii Island, the lowest cost is during the daytime, 9am to 5pm. The difference between high and low rates are $0.35/kWh and $0.50/kWh, respectively. It is not stated whether the rates will be implemented as an opt-in, opt-out or mandatory program. This report summarizes literature on time varying pricing for residential rates to inform Hawaii’s electricity stakeholders, including ratepayers and policy-makers, of the potential impacts and considerations regarding the potential for TOU pricing in Hawaii.

Working Paper


Electric Vehicle Greenhouse Gas Emission Assessment for Hawaii

This study estimates greenhouse gas (GHG) emissions of electric vehicles (EVs) compared to that of other popular and similar cars in Hawaii, by county over an assumption of 150,000 miles driven. The GHG benefits of EVs depend critically on the electricity system from which they derive their power. The analysis shows that EVs statewide are an improvement in GHG emissions over similar and popular internal combustion engine vehicles (ICEVs). Due to Oahu’s relatively high dependence on fossil fuels, including coal-burning, however, hybrid electric vehicles (HEVs) offer an improvement over EVs. Notably, Oahu also has the most EVs on the road. Hawaii Island, where there are few EVs on the road, shows a clear GHG benefit from EVs because of its high penetration of low carbon sources for electricity. This difference in benefits suggests that policies supporting EV uptake should consider impacts per island, based on available types of electricity generation. For example, because EVs on Hawaii Island provide near to mid-term GHG benefits, there should be assessment of provision of fast-charging stations to overcome potential range anxiety. Until Oahu substantially transitions towards greater penetration of renewable sources for electricity, it may be too early to tout EVs on Oahu as a GHG emissions reduction strategy. This of course depends on the type of vehicle from which drivers switch to EVs. If EV drivers largely pull from potential HEV consumers, as is suggested in prior studies, then there is no gain in GHG emissions reduction. On the other hand, if EV consumers switch from ICEVs, there are GHG emissions savings. Oahu’s electricity generation mix must become similar to that in carbon intensity of Kauai and Maui to make high performing EVs at least comparable to high performing HEVs in GHG emissions.

Read the full report at the Electric Vehicle Transportation Center.


The Conversation: Michael Roberts on What a Difference a Rate Makes

UHERO Fellow Michael Roberts appears on The Conversation to talk about the role of interest rates and Hawaii's renewable energy goals. Learn more in his blog post: What a Difference a Rate Makes.

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Making an Optimal Plan for 100% Renewable Power in Hawaii

The State of Hawaii has adopted the unprecedented goal of building a 100 percent renewable power system by 2045. This report identifies some of the central challenges in achieving this goal and uses the SWITCH power system planning model to identify solutions to these challenges. A 100% renewable power system must balance electricity supply and demand on two main time scales: diurnal (providing enough power each hour of the day) and seasonal (providing enough total energy on each day of the year). The diurnal balance could be achieved by installing large amounts of primarily solar production capacity, then using batteries, demand response, biofuels or hydrogen production to shift power production and/or consumption between day and night. The seasonal balance may be more challenging. Energy demand during days or weeks with low sunlight could be met by building extra solar and wind capacity, using biofuels, or using hydrogen produced during sunny months. Demand response will likely be less expensive than the other options for day-night energy balancing, and customer-sited solar may be competitive with utility-scale solar; consequently electric utilities may need to become energy integrators and market managers, rather than bulk power providers.It is unclear how much biofuel the State could use without compromising other environmental and energy independence objectives; consequently hydrogen energy storage merits serious consideration. SWITCH or similar models can be used to identify optimal long-term plans; however, a new incentive system is needed to encourage the State's utilities to develop and implement such plans, regardless of who will own the generating equipment.

white paper


ThinkTech Hawaii: Matthias Fripp on Renewable Energy


UHERO Research Fellow Matthias Fripp appeared on ThinkTech Hawaii to discuss energy-saving tips and the path to 100% renewable energy in Hawaii.

watch


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