May 2017
Hello
-
Please enjoy this edition of
the Prospect Resources
newsletter
Did
You Know - What is the
Balancing Congestion
Charge?
Many
economic models account for
congestion pricing. That
pricing often refers to a
surcharge that is passed on
to customers when demand is
outstripping supply, in
order to smooth out
delivery. Congestion, as it
correlates to electricity
networks, is related, though
not an entirely analogous
concept.
In
reality, no actual
congestion occurs in the
grid transmission system.
These systems don't slow
down. Electricity doesn't
become blocked or delayed.
Rather, the grid authority
is concerned that there will
be a transmission capacity
shortage during peak hours
and that service would
become interrupted to a
waiting market. The
authorities have two options
to alleviate congestion. On
the one hand, they can offer
incentives for end-users to
decrease their demand. On
the other hand, they can add
new infrastructure to
increase system capacity.
PJM,
the Regional Transmission
Authority, filed a request
with the Federal Energy
Regulatory Commission (FERC)
requesting additional
funding for balancing its
congestion requirement. FERC
acceded to this
request. The resulting order
allocates balancing
congestion charges to
real-time load.
Consequently, all PJM
customers will now be paying
this additional charge. Even
accounts that have their
electricity prices fully
locked will be subject to
this charge as a "Change in
Law" as of 6/1/2017.
For
more details on the
Balancing Congestion Charge,
please visit here.
LNG
Markets Expanding
Liquefied Natural
Gas (LNG) shipments have been
growing at a steady pace.
Ultimately the rate of
expansion will depend on many
factors. Each deal will have
unique geographic, economic,
and political elements.
In
a recent first, Poland is
taking its first LNG shipment
from the United States,
originating from Sabine Pass
and expected to arrive in June
2017. It will be the first
large LNG shipment into
Northern Europe, and is viewed
as an attempt to lessen
Poland's regional reliance on
Russia.
For more details about this
story, click here
US Public
Sentiment
is Up for Renewables
Regulation
The
US public at large generally
supports legislation and
regulation aimed at the
increase in renewable sources
of energy, according to a
recent study by the Pew
Research Center. The study
finds that 83% of
Americans consider it an
important priority to boost
renewable energy sources as a
means of combating other
technologies that pollute more
and reduce air quality.
The demographics are as
follows:
- Political
Affiliation: Democrats
and Republicans are divided
on their feelings about how
the government can pare down
regulations, while still
protecting air and water
quality.
- Age: Great
sensitivity to environmental
concerns, as well as a
desire to see the
administration in Washington
do more to further
protections is a sentiment
shared by the majority of
adults under the age of 50,
with numbers increasing in
American adults under the
age of 30.
- Income
bracket: Environmental
policy appears to be less
concerning to low-income
Americans, who are more
concerned with the impact on
energy prices.
For
more details about this study,
click here.
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