Few would argue with the claim that Texas has the best wholesale and the most competitive retail electricity market in the US, if not the world. But it suffers from an ailment called inadequate resource adequacy. Private investors, who are the key stakeholders in building generation capacity, appear unable and/or unwilling to invest sufficiently in what the regulators and the market operator would like to see in terms of a comfortable reserve margin.
This week, the European Climate Commissioner made a proposal to stabilise the European Union’s emission trading system – a market for greenhouse gas emission allowances that has been in place since 2005. Under the proposal, allowances worth six month of EU emissions (900 million tonnes) would be temporarily taken out of the trading system, and sold in 2019 and 2020 rather than 2013-2015.
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With the November’s election around the corner, everything in Washington and beyond is viewed from the highly polarized and politicized perspective with both parties trying to milk the issues for all they can. The recent demise of coal is no exception. Coal, long considered the fuel of choice for power generation in the US – as in many other countries – has been gradually losing market share, mostly to natural gas. The coal’s downward trend, however, has accelerated in the past couple of years with gas prices at historically low levels. Although the figures fluctuate seasonally and depending on temperature and load, in the past few months, power generation from natural gas has been running at near parity with coal, something few observers could have imagined only a decade ago. Continue reading »