Frank A. Wolak
Director, Program on Energy and Sustainable Development (PESD) Stanford University
This document compiles a list of state and local regulatory
barriers to greater penetration of technologies and mechanisms
that reduce the carbon content of the energy services consumed
in the United States. A preliminary list of regulatory barriers is
1. Transmission planning and expansion approval process. A
comprehensive national transmission planning process is
necessary to support the large-scale deployment of
renewable energy resources. The two major interconnected
grids in the United States—Eastern Interconnection and
the Western Interconnection should have a regional
transmission planning and siting process that also constructs
and pays for each interconection's transmission network at the regional level.
2. Transmission pricing. A simplified, standardized, and interconnection-wide
approach to transmission pricing is needed to facilitate the siting and construction of
transmission projects to support the large scale deployment of renewable energy.
3. Interval metering and symmetric treatment of load and generation. Meters that
record a customer's consumption at least every hour of the day are necessary to
enable electricity consumers to benefit fully from wholesale electricity competition
and from managing the intermittent supply of electricity associated with a larger
capacity share of renewable generation resources. Moreover, unless these meters
are accompanied by default hourly retail prices that pass through the hourly
wholesale price signal, few if any, of these benefits will be realized by electricity
consumers. The potentiaal benefits of a "smart grid" will largely go unrealized
because there is little financial incentive for any market participant to capture them.
4. Limited ability and benefits from switching to lower carbon sources of energy.
Running more efficient natural gas-fired generation more intensively and coal-fired
generation units less intensively can significantly reduce GHG emissions from the
electricity sector. Retrofitting coal-fired generation units to burn natural gas can also
significantly reduce GHG emissions from the electricity sector. The lack of a price for
GHG emissions significantly limits the financial incentives for this fuel switching to
occur and the substantial regulatory barriers to repowering generation units near
major load centers further dulls this financial incentive.
5. Barriers to the development of unconventional sources of natural gas and LNG.
Natural gas has the potential to become a transitional fossil fuel to a significantly
lower carbon electricity sector. This will require substantial increases in domestic
natural gas consumption which will require increases in the supply of natural gas
from both unconventional sources and liquefied natural gas (LNG) imports.
6. Barriers to the development of carbon capture and sequestration facilities. For both
political and economic reasons, it is highly unlikely that the United States electricity
sector will be able to significantly reduce its consumption of coal in the near term.
The deployment of carbon capture and sequestration (CCS) technologies at scale
can allow the United States to continue to burn coal in the electricity sector.