Alternate energy costs pressure power rates

By The Oregonian


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Big investments in renewable energy could mean higher electric bills, hitting households and businesses during high unemployment and a weak economy.

Oregon's biggest electric companies, PacifiCorp and Portland General Electric, filed for rate increases recently with state utility regulators.

Both cited renewable energy projects as the reason. If approved by the Oregon Public Utility Commission, the raises would take effect in early 2010, The Oregonian said.

PacifiCorp wants a $92.1 million increase, or 9.1 percent, which would add an average of $5.12 to a residential customers monthly bill, which is at about $82.85 for 950 kilowatt-hours per month.

PGE's investment in renewable energy at Biglow Canyon translates to a request for a 2.3 percent increase for retail customers, totaling $41.3 million.

But PGE's prices may decrease slightly because prices for power are falling, resulting in an offsetting filing for a $46.8 million decrease, PGE said.

Steve Corson of PGE said the impact of the two filings on the average, 900-kilowatt-hour customer would be a few cents a month, to the customer's advantage.

Some groups say rate hikes resulting from the shift to alternative energy sources will become common as utility companies build wind farms and solar systems to meet state guidelines.

Costs associated with renewables, primarily wind, are high, said Michael Early, executive director of Industrial Customers of Northwest Utilities, tagged with some of the steepest hikes.

"We have a renewable energy portfolio, but it doesn't come without a cost."

Under PacifiCorp's request, industrial customers would get some of the biggest rate jumps at 13.7 percent.

The rate case is the first for PacifiCorp since 2006, when the electric utility requested an increase of 13.2 percent and got about 5 percent.

Since 2006, Oregon's portion of the company's investments in electric plants and other capital projects has grown by $500 million, said Bill Griffith, director of pricing.

PacifiCorp has invested in two natural gas generating plants in Washington and Utah and three new wind facilities in Wyoming.

Griffith said industrial customers are being asked to pay more because they have the most need for more electricity.

"Their lights are always on," Griffith said. "Most of the cost is generation and transmission, and that's a larger proportion of the industrial customers' bill."

But to Early, who represents 38 manufacturers, the extra burden doesn't match the flat growth of the industrial sector.

"The industrial load is not growing," Early said. "If there's growth, it's coming from other sectors. It's a bad time for any rate increase. The long-term implication for the economy and the manufacturing sector is difficult."

In addition, PacifiCorp wants an increase in its authorized profit margins from 10 percent to 11 percent.

Bob Jenks, executive director of the Citizens' Utility Board, said it was unlikely the state utility commission would approve the profit increase.

"We think it's an outrage considering the state of the economy," Jenks said.

Portland General Electric raised rates by 5.6 percent starting this year. The average monthly bill for a PGE customer using 900 kilowatt-hours of electricity grew from $88.21 to $93.59.

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British Columbia Accelerates Clean Energy Shift

BC Hydro Grid Modernization accelerates clean energy and electrification, upgrading transmission lines, substations, and hydro dams to deliver renewable power for EVs and heat pumps, strengthen grid reliability, and enable industrial decarbonization in British Columbia.

 

Key Points

A $36B, 10-year plan to expand and upgrade B.C.'s clean grid for electrification, reliability, and industrial growth.

✅ $36B for lines, substations, and hydro dam upgrades

✅ Enables EV charging, heat pumps, and smart demand response

✅ Prioritizes industrial electrification and Indigenous partnerships

 

In a significant move towards a clean energy transition, British Columbia has announced a substantial $36-billion investment to enlarge and upgrade its electricity grid over the next ten years. The announcement last Tuesday from BC Hydro indicates a substantial 50 percent increase from its prior capital plan. A major portion of this investment is directed towards new consumer connections and improving current infrastructure, including substations, transmission lines, and hydro dams for more efficient power generation.

The catalyst behind this major investment is the escalating demand for clean energy across residential, commercial, and industrial sectors in British Columbia. Projections show a 15 percent rise in electricity demand by 2030. According to the Canadian Climate Institute's models, achieving Canada’s climate goals will require extensive electrification across various sectors, raising questions about a net-zero grid by 2050 nationwide.

BC Hydro is planning substantial upgrades to the electrical grid to meet the needs of a growing population, decreasing industry carbon emissions, and the shift towards clean technology. This is vital, especially as the province works towards improving housing affordability and as households face escalating costs from the impacts of climate change and increasing exposure to harsh weather events. Affordable, reliable power and access to clean technologies such as electric vehicles and heat pumps are becoming increasingly important for households.

British Columbia is witnessing a significant shift from fossil fuels to clean electricity in powering homes, vehicles, and workplaces. Electric vehicle usage in B.C. has increased twentyfold in the past six years. Last year, one in every five new light-duty passenger vehicles sold in B.C. was electric – the highest rate in Canada. Additionally, over 200,000 B.C. homes are now equipped with heat pumps, indicating a growing preference for the province’s 98 percent renewable electricity.

The investment also targets reducing industrial emissions and attracting industrial investment. For instance, the demand for transmission along the North Coastline, from Prince George to Terrace, is expected to double this decade, especially from sectors like mining. Mining companies are increasingly looking for locations with access to clean power to reduce their carbon footprint.

This grid enhancement plan in B.C. is reflective of similar initiatives in provinces like Quebec and the legacy of Manitoba hydro history in building provincial systems. Hydro-Québec announced a substantial $155 to $185 billion investment in its 2035 Action Plan last year, aimed at supporting decarbonization and economic growth. By 2050, Hydro-Québec predicts a doubling of electricity demand in the province.

Both utilities’ strategies focus on constructing new facilities and enhancing existing assets, like upgrading dams and transmission lines. Hydro-Québec, for instance, includes energy efficiency goals in its plan to double customer savings and potentially save over 3,500 megawatts of power.

However, with this level of investment, provinces need to engage in dialogue about priorities and the optimal use of clean electricity resources, with concepts like macrogrids offering potential benefits. Quebec, for instance, has shifted from a first-come, first-served basis to a strategic review process for significant new industrial power requests.

B.C. is also moving towards strategic prioritization in its energy strategy, evident in its recent moratorium on new connections for virtual currency mining due to their high energy consumption.

Indigenous partnership and leadership are also key in this massive grid expansion. B.C.’s forthcoming Call for Power and Quebec’s financial partnerships with Indigenous communities indicate a commitment to collaborative approaches. British Columbia has also allocated $140 million to support Indigenous-led power projects.

Regarding the rest of Canada, electricity planning varies in provinces with deregulated markets like Ontario and Alberta. However, these provinces are adapting too, and the federal government has funded an Atlantic grid study to improve regional planning efforts. Ontario, for example, has provided clear guidance to its system operator, mirroring the ambition in B.C. and Quebec.

Utilities are rapidly working to not only expand and modernize energy grids but also to make them more resilient, affordable, and smarter, as demonstrated by recent California grid upgrades funding announcements across the sector. Hydro-Québec focuses on grid reliability and affordability, while B.C. experiments with smart-grid technologies.

Both Ontario and B.C. have programs encouraging consumers to reduce consumption in real-time, demonstrating the potential of demand-side management. A recent instance in Alberta showed how customer participation could prevent rolling blackouts by reducing demand by 150 megawatts.

This is a crucial time for all Canadian provinces to develop larger, smarter energy grids, including a coordinated western Canadian electricity grid approach for a sustainable future. Utilities are making significant strides towards this goal.
 

 

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Blood Nickel and Canada's Role in Global Mining Sustainability

Blood Nickel spotlights ethical sourcing in the EV supply chain, linking nickel mining to human rights, environmental impact, ESG standards, and Canadian leadership in sustainable extraction, transparency, and community engagement across global battery materials markets.

 

Key Points

Blood Nickel is nickel mined under unethical or harmful conditions, raising ESG, human rights, and environmental risks.

✅ Links EV battery supply chains to social and environmental harm

✅ Calls for transparency, traceability, and ethical sourcing standards

✅ Highlights Canada's role in sustainable mining and community benefits

 

The rise of electric vehicles (EVs) has sparked a surge in demand for essential battery components, particularly nickel, and related cobalt market pressures essential for their batteries. This demand has ignited concerns about the environmental and social impacts of nickel mining, particularly in regions where standards may not meet global sustainability benchmarks. This article explores the concept of "blood nickel," its implications for the environment and communities, and Canada's potential role in promoting sustainable mining practices.

The Global Nickel Boom

As the automotive industry shifts towards electric vehicles, nickel has emerged as a critical component for lithium-ion batteries due to its ability to store energy efficiently. This surge in demand has led to a global scramble for nickel, with major producers ramping up extraction efforts to meet market needs amid EV shortages and wait times that underscore supply constraints. However, this rapid expansion has raised alarms about the environmental consequences of nickel mining, including deforestation, water pollution, and carbon emissions from energy-intensive extraction processes.

Social Impacts: The Issue of "Blood Nickel"

Beyond environmental concerns, the term "blood nickel" has emerged to describe nickel mined under conditions that exploit workers, disregard human rights, or fail to uphold ethical labor standards. In some regions, nickel mining has been linked to issues such as child labor, unsafe working conditions, and displacement of indigenous communities. This has prompted calls for greater transparency and accountability in global supply chains, with initiatives like U.S.-ally efforts to secure EV metals aiming to align sourcing standards, to ensure that the benefits of EV production do not come at the expense of vulnerable populations.

Canada's Position and Potential

Canada, home to significant nickel deposits, stands at a pivotal juncture in the global EV revolution, supported by EV assembly deals in Canada that strengthen domestic manufacturing. With its robust regulatory framework, commitment to environmental stewardship, and advanced mining technologies, Canada has the potential to lead by example in sustainable nickel mining practices. Canadian companies are already exploring innovations such as cleaner extraction methods, renewable energy integration, and community engagement initiatives to minimize the environmental footprint and enhance social benefits of nickel mining.

Challenges and Opportunities

Despite Canada's potential, the mining industry faces challenges in balancing economic growth with environmental and social responsibility and building integrated supply chains, including downstream investments like a battery plant in Niagara that can connect materials to markets. Achieving sustainable mining practices requires collaboration among governments, industry stakeholders, and local communities to establish clear guidelines, monitor compliance, and invest in responsible resource development. This approach not only mitigates environmental impacts but also fosters long-term economic stability and social well-being in mining regions.

Pathways to Sustainability

Moving forward, Canada can play a pivotal role in shaping the global nickel supply chain by promoting transparency, ethical sourcing, and environmental stewardship. This includes advocating for international standards that prioritize sustainable mining practices, supporting research and development of cleaner technologies, and leveraging adjacent resources such as Alberta lithium potential to diversify battery supply chains, while fostering partnerships with global stakeholders to ensure a fair and equitable transition to a low-carbon economy.

Conclusion

The rapid growth of electric vehicles has propelled nickel into the spotlight, highlighting both its strategic importance and the challenges associated with its extraction. As global demand for "green" metals intensifies, addressing the concept of "blood nickel" becomes increasingly urgent, even as trade measures like tariffs on Chinese EVs continue to reshape market incentives. Canada, with its rich nickel reserves and commitment to sustainability, has an opportunity to lead the charge towards ethical and responsible mining practices. By leveraging its strengths in innovation, regulation, and community engagement, Canada can help forge a path towards a more sustainable future where electric vehicles drive progress without compromising environmental integrity or social justice.

 

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Integrating AI Data Centers into Canada's Electricity Grids

Canada AI Data Center Grid Integration aligns AI demand with renewable energy, energy storage, and grid reliability. It emphasizes transmission upgrades, liquid cooling efficiency, and policy incentives to balance economic growth with sustainable power.

 

Key Points

Linking AI data centers to Canada's grid with renewables, storage, and efficiency to ensure reliable, sustainable power.

✅ Diversify supply with wind, solar, hydro, and firm low-carbon resources

✅ Deploy grid-scale batteries to balance peaks and enhance reliability

✅ Upgrade transmission, distribution, and adopt liquid cooling efficiency

 

Artificial intelligence (AI) is revolutionizing various sectors, driving demand for data centers that support AI applications. In Canada, this surge in data center development presents both economic opportunities and challenges for the electricity grid, where utilities using AI to adapt to evolving demand dynamics. Integrating AI-focused data centers into Canada's electricity infrastructure requires strategic planning to balance economic growth with sustainable energy practices.​

Economic and Technological Incentives

Canada has been at the forefront of AI research for over three decades, establishing itself as a global leader in the field. The federal government has invested significantly in AI initiatives, with over $2 billion allocated in 2024 to maintain Canada's competitive edge and to align with a net-zero grid by 2050 target nationwide. Provincial governments are also actively courting data center investments, recognizing the economic and technological benefits these facilities bring. Data centers not only create jobs and stimulate local economies but also enhance technological infrastructure, supporting advancements in AI and related fields.​

Challenges to the Electricity Grid

However, the energy demands of AI data centers pose significant challenges to Canada's electricity grid, mirroring the power challenge for utilities seen in the U.S., as demand rises. The North American Electric Reliability Corporation (NERC) has raised concerns about the growing electricity consumption driven by AI, noting that the current power generation capacity may struggle to meet this increasing demand, while grids are increasingly exposed to harsh weather conditions that threaten reliability as well. This situation could lead to reliability issues, including potential blackouts during peak demand periods, jeopardizing both economic activities and the progress of AI initiatives.​

Strategic Integration Approaches

To effectively integrate AI data centers into Canada's electricity grids, a multifaceted approach is essential:

  1. Diversifying Energy Sources: Relying solely on traditional energy sources may not suffice to meet the heightened demands of AI data centers. Incorporating renewable energy sources, such as wind, solar, and hydroelectric power, can provide sustainable alternatives. For instance, Alberta has emerged as a proactive player in supporting AI-enabled data centers, with the TransAlta data centre agreement expected to advance this momentum, leveraging its renewable energy potential to attract such investments.
     

  2. Implementing Energy Storage Solutions: Integrating large-scale battery storage systems can help manage the intermittent nature of renewable energy. These systems store excess energy generated during low-demand periods, releasing it during peak times to stabilize the grid. In some communities, AI-driven grid upgrades complement storage deployments to optimize operations, which supports data center needs and community reliability.
     

  3. Enhancing Grid Infrastructure: Upgrading transmission and distribution networks is crucial to handle the increased load from AI data centers. Strategic investments in grid infrastructure can prevent bottlenecks and ensure efficient energy delivery, including exploration of macrogrids in Canada to improve regional transfers, supporting both existing and new data center operations.​
     

  4. Adopting Energy-Efficient Data Center Designs: Designing data centers with energy efficiency in mind can significantly reduce their power consumption. Innovations such as liquid cooling systems are being explored to manage the heat generated by high-density AI workloads, offering more efficient alternatives to traditional air cooling methods.

  5. Establishing Collaborative Policies: Collaboration among government entities, utility providers, and data center operators is vital to align energy policies with technological advancements. Developing regulatory frameworks that incentivize sustainable practices can guide the growth of AI data centers in harmony with grid capabilities.​
     

Integrating AI data centers into Canada's electricity grids presents both significant opportunities and challenges. By adopting a comprehensive strategy that includes diversifying energy sources, implementing advanced energy storage, enhancing grid infrastructure, promoting energy-efficient designs, and fostering collaborative policies, Canada can harness the benefits of AI while ensuring a reliable and sustainable energy future. This balanced approach will position Canada as a leader in both AI innovation and sustainable energy practices.

 

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Europe's Worst Energy Nightmare Is Becoming Reality

European Energy Crisis shocks markets as Russia slashes gas via Nord Stream, spiking prices and triggering rationing, LNG imports, storage shortfalls, and emergency measures to secure energy security before a harsh winter.

 

Key Points

Europe-wide gas shock from reduced Russian flows drives price spikes, rationing risk, LNG reliance, and emergency action.

✅ Nord Stream cuts deepen supply insecurity and storage gaps

✅ LNG imports rise but terminal capacity and shipping are tight

✅ Policy tools: rationing, subsidies, demand response, coal restarts

 

As Russian gas cutoffs upend European energy security, the continent is struggling to cope with what experts say is one of its worst-ever energy crises—and it could still get much worse. 

For months, European leaders have been haunted by the prospect of losing Russia’s natural gas supply, which accounts for some 40 percent of European imports and has been a crucial energy lifeline for the continent. That nightmare is now becoming a painful reality as Moscow slashes its flows in retaliation for Europe’s support for Ukraine, dramatically increasing energy prices and forcing many countries to resort to emergency plans, including emergency measures to limit electricity prices in some cases, and as backup energy suppliers such as Norway and North Africa are failing to step up.

“This is the most extreme energy crisis that has ever occurred in Europe,” said Alex Munton, an expert on global gas markets at Rapidan Energy Group, a consultancy. “Europe [is] looking at the very real prospect of not having sufficient gas when it’s most needed, which is during the coldest part of the year.”

“Prices have shot through the roof,” added Munton, who noted that European natural gas prices—nearly $50 per MMBTu—have eclipsed U.S. price rises by nearly tenfold, and that rolling back electricity prices is tougher than it appears in the current market. “That is an extraordinarily high price to be paying for natural gas, and really there is no immediate way out from here.” 

Many officials and energy experts worry that the crisis will only deepen after Nord Stream 1, the largest gas pipeline from Russia to Europe, is taken down for scheduled maintenance this week. Although the pipeline is supposed to be under repair for only 10 days, the Kremlin’s history of energy blackmail and weaponization has stoked fears that Moscow won’t turn it back on—leaving heavily reliant European countries in the lurch. (Russia’s second pipeline to Germany, Nord Stream 2, was killed in February as Russian President Vladimir Putin prepared to invade Ukraine, leaving Nord Stream 1 as the biggest direct gas link between Russia and Europe’s biggest economy.)

“Everything is possible. Everything can happen,” German economy minister Robert Habeck told Deutschlandfunk on Saturday. “It could be that the gas flows again, maybe more than before. It can also be the case that nothing comes.”

That would spell trouble for the upcoming winter, when demand for energy surges and having sufficient natural gas is necessary for heating. European countries typically rely on the summer months to refill their gas storage facilities. And at a time of war, when the continent’s future gas supply is uncertain, having that energy cushion is especially crucial.

If Russia’s prolonged disruptions continue, experts warn of a difficult winter: one of potential rationing, industrial shutdowns, and even massive economic dislocation. British officials, who just a few months ago warned of soaring power bills for consumers, are now warning of even worse, despite a brief fall to pre-Ukraine war levels in gas prices earlier in the year.

Europe could face a “winter of discontent,” said Helima Croft, a managing director at RBC Capital Markets. “Rationing, industrial shut-ins—all of that is looming.”

Unrest has already been brewing, with strikes erupting across the continent as households struggle under the pressures of spiraling costs of living and inflationary pressures. Some of this discontent has also had knock-on effects in the energy market. In Norway, the European Union’s biggest supplier of natural gas after Russia, mass strikes in the oil and gas industries last week forced companies to shutter production, sending further shockwaves throughout Europe.

European countries are at risk of descending into “very, very strong conflict and strife because there is no energy,” Frans Timmermans, the vice president of the European Commission, told the Guardian. “Putin is using all the means he has to create strife in our societies, so we have to brace ourselves for a very difficult period.”

The pain of the crisis, however, is perhaps being felt most clearly in Germany, which has been forced to turn to a number of energy-saving measures, including rationing heated water and closing swimming pools. To cope with the crunch, Berlin has already entered the second phase of its three-stage emergency gas plan; last week, it also moved to bail out its energy giants amid German utility troubles that have been financially slammed by Russian cutoffs. 

But it’s not just Germany. “This is happening all across Europe,” said Olga Khakova, an expert on European energy security at the Atlantic Council, who noted that France has also announced plans to nationalize the EDF power company as it buckles under mounting economic losses, and the EU outlines gas price cap strategies to temper volatility. “The challenging part is how much can these governments provide in support to their energy consumers, to these companies? And what is that breaking point?”

The situation has also complicated many countries’ climate goals, even as some call it a wake-up call to ditch fossil fuels for Europe. In late June, Germany, Italy, Austria, and the Netherlands announced they would restart old coal power plants as they grapple with shrinking supplies. 

The potential outcomes that European nations are grappling with reveal how this crisis is occurring on a scale that has only been seen in times of war, Munton said. In the worst-case scenario, “we’re talking about rationing gas supplies, and this is not something that Europe has had to contend with in any other time than the wartime,” he said. “That’s essentially where things have got to now. This is an energy war.”

They also underscore the long and painful battle that Europe will continue to face in weaning itself off Russian gas. Despite the continent’s eagerness to leave Moscow’s supply behind, experts say Europe will likely remain trapped in this spiraling crisis until it can develop the infrastructure for greater energy independence—and that could take years. U.S. gas, shipped by tanker, is one option, but that requires new terminals to receive the gas and U.S. energy impacts remain a factor for policymakers. New pipelines take even longer to build—and there isn’t a surfeit of eligible suppliers.

Until then, European leaders will continue to scramble to secure enough supplies—and can only hope for mild weather. The “worst-case scenario is people having to choose between eating and heating come winter,” Croft said. 

 

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Analysis: Out in the cold: how Japan's electricity grid came close to blackouts

Japan Electricity Crunch exposes vulnerabilities in a liberalised power market as LNG shortages, JEPX price spikes, snow-hit solar, and weak hedging strain energy security and retail providers amid cold snap demand and limited reserve capacity.

 

Key Points

A winter demand shock and LNG shortfalls sent JEPX to records, exposing gaps in hedging, data, and energy security.

✅ JEPX wholesale prices spiked to an all-time high

✅ LNG inventories and procurement proved insufficient

✅ Snow disabled solar; new entrants lacked hedging

 

Japan's worst electricity crunch since the aftermath of the Fukushima crisis has exposed vulnerabilities in the country's recently liberalised power market, although some of the problems appear self-inflicted.

Power prices in Japan hit record highs last month, mirroring UK peak power prices during tight conditions, as a cold snap across northeast Asia prompted a scramble for supplies of liquefied natural gas (LNG), a major fuel for the country's power plants. Power companies urged customers to ration electricity to prevent blackouts, although no outages occurred.

The crisis highlighted how many providers were unprepared for such high demand. Experts say LNG stocks were not topped up ahead of winter and snow disabled solar power farms, while China's power woes strained solar supply chains.

The hundreds of small power companies that sprang up after the market was opened in 2016 have struggled the most, saying the government does not disclose the market data they need to operate. The companies do not have their own generators, instead buying electricity on the wholesale market.

Prices on the Japan Electric Power Exchange (JEPX) hit a record high of 251 yen ($2.39) per kilowatt hour in January, equating to $2,390 per megawatt hour of electricity, above record European price surges seen recently and the highest on record anywhere in the world. One megawatt hour is roughly what an average home in the U.S. would consume over 35 days.

But the vast majority of the new, smaller companies are locked into low, fixed rates they set to lure customers from bigger players, crushing them financially during a price spike like the one in January.

More than 50 small power providers wrote on Jan. 18 to Japan's industry minister, Hiroshi Kajiyama, who oversees the power sector, asking for more accessible data on supply and demand, reserve capacity and fuel inventories.

"By organising and disclosing this information, retail electricity providers will be able to bid at more appropriate prices," said the companies, led by Looop Co.

They also called on Kajiyama to require transmission and distribution companies to pass on some of the unexpected profits from price spikes to smaller operators.

The industry ministry said it had started releasing more timely market data, and is reviewing the cause of the crunch and considering changes, echoing calls by Fatih Birol to keep electricity options open amid uncertainty.

Japan reworked its power markets after the Fukushima nuclear disaster in 2011, liberalizing the sector in 2016 while pushing for more renewables.

But Japan is still heavily reliant on LNG and coal, and only four of 33 nuclear reactors are operating. The power crisis has led to growing calls to restart more reactors.

Kazuno Power, a small retail provider controlled by a municipality of the same name in northern Japan, where abundant renewable energy is locally produced, buys electricity from hydropower stations and JEPX.

During the crunch, the company had to pay nearly 10 times the usual price, Kazuno Power president Takao Takeda said in an interview. Like most other new providers, it could not pass on the costs, lost money, and folded. The local utility has taken over its customers.

"There is a contradiction in the current system," Takeda said. "We are encouraged to locally produce power for local consumption as well as use more renewable energy, but prices for these power supplies are linked to wholesale prices, which depend on the overall power supply."

The big utilities, which receive most of their LNG on long-term contracts, blamed the power shortfall on a tight spot market and glitches at generation units.

"We were not able to buy as much supply as we wanted from the spot market because of higher demand from South Korea and China, where power cuts have tightened supply," Kazuhiro Ikebe, the head of the country's electricity federation, said recently.

Ikebe is also president of Kyushu Electric Power, which supplies the southern island of Kyushu.

Utilities took extreme measures - from burning polluting fuel oil in coal plants to scavenging the dregs from empty LNG tankers - to keep the grid from breaking down.

"There is too much dependence on JEPX for procurement," said Bob Takai, the local head of European Energy Exchange, where electricity pricing reforms are being discussed, and which started offering Japan power futures last year. He added that new entrants were not hedging against sharp price moves.

Three people, who requested anonymity because of the sensitivity of the matter, were more blunt. One called the utilities arrogant in assuming they could find LNG cargoes in a pinch. Prices were already rising as China snapped up supplies, the sources noted.

"You had volatility caused by people saying 'Oh, well, demand is going to be weak because of coronavirus impacts' and then saying 'we can rely more on solar than in the past,' but solar got snowed out," said a senior executive from one generator. "We have a problem of who is charge of energy security in Japan."

Inventories of LNG, generally about two weeks worth of supplies, were also not topped up enough to prepare for winter, a market analyst said.

The fallout from the crunch has become more apparent in recent days, with new power companies like Rakuten Inc suspending new sales and Tokyo Gas, along with traditional electricity utilities, issuing profit downgrades or withdrawing their forecasts.

Although prices have fallen sharply as temperatures warmed up slightly and more generation units have come back online, the power generator executive said, "we are not out of the woods yet."
 

 

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Buyer's Remorse: Questions about grid modernization affordability

Grid Modernization drives utilities to integrate DER, AMI, and battery storage while balancing reliability, safety, and affordability; regulators pursue cost-benefit analyses, new rate design, and policy actions to guide investment and protect customer-owned resources.

 

Key Points

Upgrading the grid to manage DER with digital tools, while maintaining reliability, safety, and customer affordability.

✅ Cost-benefit analyses guide prudent grid investments

✅ AMI and storage deployments enable DER visibility and control

✅ Rate design reforms support customer-owned resources

 

Utilities’ pursuit of a modern grid, including the digital grid concept, to maintain the reliability and safety pillars of electricity delivery has raised a lot of questions about the third pillar — affordability.

Utilities are seeing rising penetrations of emerging technologies, highlighted in recent grid edge trends reports, like distributed solar, behind-the-meter battery storage, and electric vehicles. These new distributed energy resources (DER) do not eliminate utilities' need to keep distribution systems safe and reliable.

But the need for modern tools to manage DER imposes costs on utilities, prompting calls to invest in smarter infrastructure even as some regulators, lawmakers and policymakers are concerned those costs could drive up electricity rates.

The result is an increasing number of legislative and regulatory grid modernization actions aimed at identifying what is necessary to serve the coming power sector transformation and address climate change risks across the grid.

 

The rise of grid modernization

Grid modernization, which is supported by both conservatives and distributed energy resources advocates, got a lot of attention last year. According to the 2017 review of grid modernization policy by the North Carolina Clean Energy Technology Center (NCCETC), 288 grid modernization policy actions were proposed, pending or enacted in 39 states.

These numbers from NCCETC's first annual review of policy activity set a benchmark against which future years' activity can be measured.

The most common type of state actions, by far, were those that focused on the deployment of advanced metering infrastructure (AMI) and battery energy storage. Those are two of the 2017 trends identified in NCCETC’s 50 States of Grid Modernization report. But deployment of those technologies, while foundational to an updated grid, only begins to prepare distribution systems for the coming power sector transformation.

Bigger advances, including the newest energy system management tools, are being held back by 2017’s other policy actions requiring more deliberation and fact-finding, even as grid vulnerability report cards underscore the risks that modernization seeks to mitigate.

Utilities’ proposals to more fully prepare their grids to deliver 21st century technologies are being met with questions about completeness and cost.

Utilities are being asked to address these questions in comprehensive, public utility commission-led cost-benefit analyses and studies. This is also one of NCCETC’s top 2017 policy action trends for grid modernization. The outcome to date appears to be an increased, but still incomplete, understanding of what is needed to build a 21st century grid.

Among the top objectives of those driving the policy actions are resolving questions about private sector participation in grid modernizaton buildouts and developing new rate designs to protect and support customer-owned distributed energy resources. Actions on those topics are also on NCCETC’s list of 2017 policy trends.

Altogether, the trend list is dominated by actions that do not lead to completion of grid modernization but to more work on it.

 

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