Huge Victory: U.S. Supreme Court Rules in Favor of Demand Response
By Allison Clements
In a long-awaited decision sure to benefit our wallets and the planet, the U.S. Supreme Court Monday upheld the Federal Energy Regulatory Commission's (FERC) authority to design rules and incentives for electricity customers to get paid for reducing consumption during periods of high electricity demand. Known as "demand response," it's most often used when energy is expensive and the grid's limits are tested.
What a Supreme Court Decision Could Mean to Demand Response #demandresponse #energysourcing https://t.co/iWdnvtc5vD https://t.co/cjYyUKUS8k— NuEnergen (@NuEnergen)1450897851.0
While others waited much of 2015 for the release of the new Star Wars movie, clean energy advocates were on pins and needles in anticipation of the outcome that finally arrived yesterday in FERC v. Electric Power Suppliers Association. The court's welcome decision could save customers billions of dollars, move the ball forward in the fight against climate change and remove barriers to the modernization necessary to achieve a clean, reliable and affordable grid.
How did we get here?
In 2011, FERC (the agency that regulates our country's high voltage electric transmission grid) issued a landmark rule called Order 745, which set compensation for demand response in wholesale energy markets. Under the rule, grid operators are required to pay demand response participants the same rates for reducing energy use as those paid to power suppliers for producing energy from resources like coal, natural gas and wind and solar power. FERC said the rule reflected the common sense view that "markets function most effectively when both supply and demand resources have appropriate opportunities to participate.''
The Electric Power Supply Association, which represents power plant owners who stand to lose money when energy users cut back their consumption, went to court challenging FERC's authority. In 2014, the DC Circuit sided with the power suppliers. The 2-1 appeals court decision, coming over a strong dissent, ruled that the states have exclusive jurisdiction over demand response participation in energy markets.
On the other side, FERC's order was backed by a broad set of interests that included our environmental coalition, states, utility regulators, grid operators, academics, economists and consumer groups.
The Supreme Court agreed to review the case in May 2015 and oral arguments were held that October. Natural Resources Defense Council and other environmental groups filed a brief in support of the rule.
What did the court say, exactly?
We'll provide a more in-depth legal analysis later today but at a high level, the court's decision is a big deal for the future of clean energy. Essentially, it affirms FERC's view in Order 745 that both states and the federal government, rather than the states alone, can regulate demand response resources. That shared responsibility clears the path for regional energy markets to maximize grid efficiency through demand response resources that can help to achieve a clean, affordable and reliable electric grid. The court also determined that demand response resources should be paid equally when they provide the same value that power plants supply to the grid.
NARUC president @TKavulla on today's SCOTUS decision in @FERC #DemandResponse case #energy https://t.co/q8Cmy3TLu1 https://t.co/h9w2snrqxm— NARUC (@NARUC)1453775338.0
Why are we so darn excited?
The high court's decision has important benefits for customers and will advance the fight against climate change, which is fueled by the carbon pollution from power plants. It bodes well for the future of our electric grid.
1. Customers continue to save money.
The decision ensures that customers won't have to sacrifice billions (yes, billions!) of dollars in savings on their electricity bills. Congress was onto something when it declared demand response a national priority in 2005, in a bill signed into law by George W. Bush. Since FERC passed Order 745, demand response has flourished in wholesale markets, keeping energy prices lower and avoiding the need to build expensive new power plants.
For example, demand response has saved electricity customers in the Mid-Atlantic region up to $9 billion in just one year.
2. We maintain a key tool in the quest to slow climate change.
Demand response can reduce carbon emissions and other pollution (but remember, not all demand response is carbon free).
- Customers who cut back on electricity use when asked often don't make up the difference later. Lower consumption equals fewer emissions from power generation.
- And if power companies can cut energy demand during peak periods, they can retire power plants that are losing money from their normal operations but staying online in case of high-demand emergencies. Avoiding the use of just 10 percent of these plants that are necessary only because of peak conditions (which are often the oldest and dirtiest plants) could prevent 100 million to 200 million metric tons of greenhouse gases annually, in addition to reducing other harmful pollutants such as nitrogen oxides and sulfur dioxide.
- Demand response programs also promote the use of clean energy, such as solar and wind power. If grid operators can count on fast-acting customer responses rather than plants that need more advanced notice to come online, they will have greater flexibility to meet electricity demand in situations when the sun isn't shining or the wind isn't blowing.
3. The court avoided unnecessary barriers to achieving Reliability 2.0.
As opposed to old-school, inflexible, fossil-fuel driven reliability, Reliability 2.0 is flexible, resilient and centered around a clean electric sector driven by increasing amounts of wind and solar power. The court's decision will accelerate the ongoing evolution toward this newer, better reliability paradigm.
The fast-acting demand response contributes to reliability in a way that inflexible (and usually dirty) fossil-fueled power plants simply cannot contribute. For example, during the 2014 winter polar vortex, when bitter cold drove up energy use and fossil-fueled power plants failed, demand response played a critical role in keeping the heat on and preventing power outages in the Mid-Atlantic region.
For all these reasons, we are thrilled with yesterday's decision.
Demand response is a vital tool to keeping down energy costs, preventing power blackouts and reducing harmful pollution. Yesterday's decision provides the freedom to design programs that increase demand response use to save consumers money, strengthen the grid and make it a "force" to reduce pollution.
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By Dr. Kate Raynes-Goldie
Of all the plastic we've ever produced, only 9% has been recycled. So what happened to all that plastic you've put in the recycling bin over the years?
Triangle of Mistruths<p>The myth created around plastic recycling has been one of simplicity. We look for the familiar triangle arrows, then pop the waste in the recycling bin so it can be reused.</p><p>But the true purpose of those triangles has been misunderstood by the general public ever since their invention in the 1980s.</p><p>These triangles were actually created by the plastics industry and, according to a report provided to them in July 1993, <a href="https://www.npr.org/transcripts/912150085" target="_blank">were creating "unrealistic expectations"</a> about what could be recycled. But they decided to keep using the codes.</p><p>Which is why many people still believe that these triangular symbols (also known as a <a href="https://sustainablepackaging.org/101-resin-identification-codes/" target="_blank" rel="noopener noreferrer">resin identifier code</a> or RIC) means something is recyclable.</p><p>But according to the American Society for Testing and Materials International (ASTM) – which controls the RIC system – the numbered triangles "<a href="https://www.astm.org/Standards/D7611.htm" target="_blank" rel="noopener noreferrer">are not recycle codes</a>." In fact, they weren't created for the general public at all. They were made for the post-consumer plastic industry.</p><p>In other words, the symbols make it easier to sort the different types of plastics, some of which cannot be recycled – <a href="https://www.ecobin.com.au/understand-recycling-codes/" target="_blank" rel="noopener noreferrer">depending on the recycling facility</a>.</p><p>"Unfortunately, just placing your plastic into the recycling bin doesn't mean it will get recycled," says Lara Camilla Pinho. She is an architect and lecturer at the UWA School of Design who is researching novel uses of plastic waste.</p><p>"The recycling system is complicated and often dictated by market demand. Not all plastic is recyclable. We cannot recycle plastic bags or straws for example."</p>
Behind the Scenes<p>So, what makes recycling plastics so difficult?</p><p>"Essentially, there are two types of plastics – thermoplastics and thermosets. While thermoplastics can be re-melted and re-molded, thermosets contain cross-linked polymers that cannot be separated meaning they cannot be recycled," says Lara.</p><p>"Even thermoplastics have a limit to the amount of times we can recycle them, as each time they are recycled they downgrade in quality."</p><p>Even when plastics are recyclable, it is <a href="https://www.theguardian.com/environment/2019/oct/13/war-on-plastic-waste-faces-setback-as-cost-of-recycled-material-soars" target="_blank">often more costly</a> than simply making new plastics.</p>
Sugar, Seaweed and Mushrooms<p>If the conventional recycling system isn't working, what else can we do with all the plastic we've created?</p><p>Lara is looking for ways to add value to recycled plastics such as using it in the design and development of architectural products. She hopes to use these architectural products to help underserved communities that are disproportionately affected by plastic waste.</p><p>In addition to recycling, we also need to find ways to reduce our use of virgin petroleum-based plastics.</p><p>Bioplastic is one such product that has been getting a lot of hype over the last few years. And although they're better than petroleum-based plastics, bioplastics also come with their own <a href="https://phys.org/news/2017-12-truth-bioplastics.html" target="_blank">set of challenges</a>.</p><p>"There are already a lot of bio-based alternatives to plastic, such as bagasse – a byproduct of sugar cane processing," says Lara.</p><p><a href="https://blogs.scientificamerican.com/observations/the-mycelium-revolution-is-upon-us/" target="_blank" rel="noopener noreferrer">Mycelium</a>, a type of fungi we most often associate with mushrooms, are also providing an interesting plastic alternative.</p><p>"In the field of architecture, mycelium is starting to be used as an alternative to plastic insulation, but also as compostable packaging and bricks," says Lara.</p><p>"The bricks take around five days to make and are strong, durable, water resistant and compostable at the end of their use."</p><p><a href="https://www.arup.com/news-and-events/hyfi-reinvents-the-brick" target="_blank" rel="noopener noreferrer">Hy-Fi Tower</a>, created by <a href="http://www.thelivingnewyork.com/living_about.html" target="_blank" rel="noopener noreferrer">The Living</a>, is an example of a building made from these bricks.</p><p>And finally, there's seaweed.</p><p>"[Seaweed is] cheap and can reproduce itself quickly without fertilizers. In architecture, there is use for seaweed as an alternative to plastic insulation but also as cladding," says Lara.</p>
More Money, More Problems<p>While all these alternatives are great, the main cause of our plastic dilemma is not scientific or technological, but economic.</p><p>As long as it remains <a href="https://engineering.mit.edu/engage/ask-an-engineer/why-is-it-cheaper-to-make-new-plastic-bottles-than-to-recycle-old-ones/" target="_blank">cheaper to create new plastics</a> from fossil fuels rather than from bioplastics or from recycling, we're going to be stuck with plastic garbage islands floating in our oceans.</p><p>The true cost to our health and our environment has yet to be included in the equation. But once it is, maybe that is when the real shift will happen.</p>
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As concern mounts over the impacts of climate change, many experts are calling for greater use of electricity as a substitute for fossil fuels. Powered by advancements in battery technology, the number of plug-in hybrid and electric vehicles on U.S. roads is increasing. And utilities are generating a growing share of their power from renewable fuels, supported by large-scale battery storage systems.