Wiring Around Carbon: Implications of Transmission Pricing Mechanisms and Smart Grid


Renewable energy in the form of utility scale wind and solar are best sited in the areas where the load profile is best - the solar belt for solar generation, and areas with high capacity factors for wind generation. The best areas for development of these resources are remote areas that lack access to transmission. The key issue with siting renewable generation that often turns a project from being economic to being uneconomic is the availability and cost associated with transmission for the developer. This article will discuss the implications for wiring around carbon depending on the transmission pricing mechanisms in use, discussing both the “Competitive Renewable Energy Zone (“CREZ”) transmission, approved by the Public Utility Commission of Texas (“PUCT” or “Commission”) in the Electric Reliability Council of Texas (“ERCOT”) market, and Tres Amigas, as each proposes to transfer renewables to load centers. The article will also discuss implications for utilizing a new tool which will have the effect of wiring around carbon, and that is the use of smart metering and the advent of smart grid technology.

Excerpted from a presentation at the 2011 Carbon and Climate Change Conference, UTCLE, The University of Texas School of Law, February 9-10, 2011. To read the full paper, click on the PDF linked below.

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