lynx   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v183y2019icp4-15.html
   My bibliography  Save this article

Exploring the relationship between planning and procurement in western U.S. electric utilities

Author

Listed:
  • Carvallo, Juan Pablo
  • Sanstad, Alan H.
  • Larsen, Peter H.
Abstract
Integrated resource planning is an important regulatory process used in many U.S. states to formulate and evaluate least-cost and risk-assessed portfolios to meet future load requirements for electric utilities. In principle, effective implementation of integrated resource planning seeks to assure regulators and the public that utility investment decisions, given uncertainty, are as cost-effective as possible. However, there is no empirical assessment on the effectiveness of integrated resource planning and its implementation. This paper compares planning outcomes and actual decisions for twelve utilities across the Western U. S. from 2003 to 2014. The authors find that subsequent plans differ significantly due to changes in the planning environment, which limited amount of information produced during planning is ultimately used during the procurement process, and that the latter process relies extensively on the most recent information available for decision making. These findings suggest that states' integrated resource planning rules and regulations mandating long-term planning horizons with the same analytical complexity throughout the planning period may not create useful information for the procurement process. The social value of a long-term planning process that departs from procurement and the balance between transparency and complexity of the planning and procurement processes is an open question.

Suggested Citation

  • Carvallo, Juan Pablo & Sanstad, Alan H. & Larsen, Peter H., 2019. "Exploring the relationship between planning and procurement in western U.S. electric utilities," Energy, Elsevier, vol. 183(C), pages 4-15.
    • Handle: RePEc:eee:energy:v:183:y:2019:i:c:p:4-15
    DOI: 10.1016/j.energy.2019.06.122
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S036054421931254X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2019.06.122?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hirst, Eric & Goldman, Charles & Hopkins, Mary Ellen, 1991. "Integrated resource planning: Electric and gas utilities in the USA," Utilities Policy, Elsevier, vol. 1(2), pages 172-186, January.
    2. Wilkerson, Jordan & Larsen, Peter & Barbose, Galen, 2014. "Survey of Western U.S. electric utility resource plans," Energy Policy, Elsevier, vol. 66(C), pages 90-103.
    3. Yuan, Jiahai & Xu, Yan & Kang, Junjie & Zhang, Xingping & Hu, Zheng, 2014. "Nonlinear integrated resource strategic planning model and case study in China's power sector planning," Energy, Elsevier, vol. 67(C), pages 27-40.
    4. Gacitua, L. & Gallegos, P. & Henriquez-Auba, R. & Lorca, Á. & Negrete-Pincetic, M. & Olivares, D. & Valenzuela, A. & Wenzel, G., 2018. "A comprehensive review on expansion planning: Models and tools for energy policy analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 98(C), pages 346-360.
    5. Zheng, Yanan & Hu, Zhaoguang & Wang, Jianhui & Wen, Quan, 2014. "IRSP (integrated resource strategic planning) with interconnected smart grids in integrating renewable energy and implementing DSM (demand side management) in China," Energy, Elsevier, vol. 76(C), pages 863-874.
    6. Carvallo, Juan Pablo & Larsen, Peter H. & Sanstad, Alan H. & Goldman, Charles A., 2018. "Long term load forecasting accuracy in electric utility integrated resource planning," Energy Policy, Elsevier, vol. 119(C), pages 410-422.
    7. Severin Borenstein & James Bushnell, 2015. "The US Electricity Industry After 20 Years of Restructuring," Annual Review of Economics, Annual Reviews, vol. 7(1), pages 437-463, August.
    8. Edward Kahn, 1995. "Regulation by Simulation: The Role of Production Cost Models in Electricity Planning and Pricing," Operations Research, INFORMS, vol. 43(3), pages 388-398, June.
    9. Satchwell, Andrew & Hledik, Ryan, 2014. "Analytical frameworks to incorporate demand response in long-term resource planning," Utilities Policy, Elsevier, vol. 28(C), pages 73-81.
    10. Barbose, Galen & Wiser, Ryan & Phadke, Amol & Goldman, Charles, 2008. "Managing carbon regulatory risk in utility resource planning: Current practices in the Western United States," Energy Policy, Elsevier, vol. 36(9), pages 3300-3311, September.
    11. Koltsaklis, Nikolaos E. & Dagoumas, Athanasios S., 2018. "State-of-the-art generation expansion planning: A review," Applied Energy, Elsevier, vol. 230(C), pages 563-589.
    12. Wu, Jing & Botterud, Audun & Mills, Andrew & Zhou, Zhi & Hodge, Bri-Mathias & Heaney, Mike, 2015. "Integrating solar PV (photovoltaics) in utility system operations: Analytical framework and Arizona case study," Energy, Elsevier, vol. 85(C), pages 1-9.
    13. Eric Hirst & Martin Schweitzer, 1990. "Electric‐Utility Resource Planning and Decision‐Making: The Importance of Uncertainty," Risk Analysis, John Wiley & Sons, vol. 10(1), pages 137-146, March.
    14. Hirst, Eric, 1994. "What constitutes a good integrated resource plan?," Utilities Policy, Elsevier, vol. 4(2), pages 141-153, April.
    15. Tierney, Susan & Schatzki, Todd, 2009. "Competitive Procurement of Retail Electricity Supply: Recent Trends in State Policies and Utility Practices," The Electricity Journal, Elsevier, vol. 22(1), pages 50-62.
    16. Eto, Joseph H., 1990. "An overview of analysis tools for integrated resource planning," Energy, Elsevier, vol. 15(11), pages 969-977.
    17. Hoog, David T. & Hobbs, Benjamin F., 1993. "An Integrated Resource Planning model considering customer value, emissions, and regional economic impacts," Energy, Elsevier, vol. 18(11), pages 1153-1160.
    18. Hobbs, Benjamin F., 1995. "Optimization methods for electric utility resource planning," European Journal of Operational Research, Elsevier, vol. 83(1), pages 1-20, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. De Jonghe, C. & Hobbs, B. F. & Belmans, R., 2011. "Integrating short-term demand response into long-term investment planning," Cambridge Working Papers in Economics 1132, Faculty of Economics, University of Cambridge.
    2. Wilkerson, Jordan & Larsen, Peter & Barbose, Galen, 2014. "Survey of Western U.S. electric utility resource plans," Energy Policy, Elsevier, vol. 66(C), pages 90-103.
    3. Thimet, P.J. & Mavromatidis, G., 2022. "Review of model-based electricity system transition scenarios: An analysis for Switzerland, Germany, France, and Italy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 159(C).
    4. Thushara, De Silva M. & Hornberger, George M. & Baroud, Hiba, 2019. "Decision analysis to support the choice of a future power generation pathway for Sri Lanka," Applied Energy, Elsevier, vol. 240(C), pages 680-697.
    5. Nhan Thanh Nguyen & Minh Ha-Duong, 2009. "The potential for mitigation of CO2 emissions in Vietnam's power sector," Post-Print halshs-00441085, HAL.
    6. Koecklin, Manuel Tong & Longoria, Genaro & Fitiwi, Desta Z. & DeCarolis, Joseph F. & Curtis, John, 2021. "Public acceptance of renewable electricity generation and transmission network developments: Insights from Ireland," Energy Policy, Elsevier, vol. 151(C).
    7. Tong Koecklin, Manuel & Fitiwi, Desta & de Carolis, Joseph F. & Curtis, John, 2020. "Renewable electricity generation and transmission network developments in light of public opposition: Insights from Ireland," Papers WP653, Economic and Social Research Institute (ESRI).
    8. Farrokhifar, Meisam & Nie, Yinghui & Pozo, David, 2020. "Energy systems planning: A survey on models for integrated power and natural gas networks coordination," Applied Energy, Elsevier, vol. 262(C).
    9. Botor, Benjamin & Böcker, Benjamin & Kallabis, Thomas & Weber, Christoph, 2021. "Information shocks and profitability risks for power plant investments – impacts of policy instruments," Energy Economics, Elsevier, vol. 102(C).
    10. Yuan, Jiahai & Lei, Qi & Xiong, Minpeng & Guo, Jingsheng & Hu, Zheng, 2016. "The prospective of coal power in China: Will it reach a plateau in the coming decade?," Energy Policy, Elsevier, vol. 98(C), pages 495-504.
    11. Woo, C.K. & Liu, Y. & Zarnikau, J. & Shiu, A. & Luo, X. & Kahrl, F., 2018. "Price elasticities of retail energy demands in the United States: New evidence from a panel of monthly data for 2001–2016," Applied Energy, Elsevier, vol. 222(C), pages 460-474.
    12. Kosugi, Takanobu, 2016. "Endogenizing the probability of nuclear exit in an optimal power-generation mix model," Energy, Elsevier, vol. 100(C), pages 102-114.
    13. Wang, Hongxia & Zhang, Junfeng & Fang, Hong, 2017. "Electricity footprint of China’s industrial sectors and its socioeconomic drivers," Resources, Conservation & Recycling, Elsevier, vol. 124(C), pages 98-106.
    14. Anwar, Muhammad Bashar & Stephen, Gord & Dalvi, Sourabh & Frew, Bethany & Ericson, Sean & Brown, Maxwell & O’Malley, Mark, 2022. "Modeling investment decisions from heterogeneous firms under imperfect information and risk in wholesale electricity markets," Applied Energy, Elsevier, vol. 306(PA).
    15. van Ouwerkerk, Jonas & Gils, Hans Christian & Gardian, Hedda & Kittel, Martin & Schill, Wolf-Peter & Zerrahn, Alexander & Murmann, Alexander & Launer, Jann & Torralba-Díaz, Laura & Bußar, Christian, 2022. "Impacts of power sector model features on optimal capacity expansion: A comparative study," Renewable and Sustainable Energy Reviews, Elsevier, vol. 157(C).
    16. Chen, Hao & Tang, Bao-Jun & Liao, Hua & Wei, Yi-Ming, 2016. "A multi-period power generation planning model incorporating the non-carbon external costs: A case study of China," Applied Energy, Elsevier, vol. 183(C), pages 1333-1345.
    17. Zheng, Yanan & Hu, Zhaoguang & Wang, Jianhui & Wen, Quan, 2014. "IRSP (integrated resource strategic planning) with interconnected smart grids in integrating renewable energy and implementing DSM (demand side management) in China," Energy, Elsevier, vol. 76(C), pages 863-874.
    18. Fitiwi, Desta Z. & Lynch, Muireann & Bertsch, Valentin, 2020. "Power system impacts of community acceptance policies for renewable energy deployment under storage cost uncertainty," Renewable Energy, Elsevier, vol. 156(C), pages 893-912.
    19. Dranka, Géremi Gilson & Ferreira, Paula & Vaz, A. Ismael F., 2020. "Cost-effectiveness of energy efficiency investments for high renewable electricity systems," Energy, Elsevier, vol. 198(C).
    20. Wu, Di & Zhang, Yuqian & Liu, Bo & Wang, Keke & Wang, Zijing & Kang, Junjie, 2024. "Optimization of coal power phaseout pathways ensuring energy security: Evidence from Shandong, China's largest coal power province," Energy Policy, Elsevier, vol. 192(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:183:y:2019:i:c:p:4-15. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.
    Лучший частный хостинг