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The document examines the risks that current short-term wholesale electricity markets, based on locational marginal prices (LMPs), may fail to provide sufficient price signals to sustain the investment needed for deep decarbonization. This is primarily due to the minimal short-run marginal costs of variable renewable energy (VRE) and the fact that VRE resources often cannot capture scarcity prices during production lulls. To mitigate this, the authors propose long-term markets that provide contractual certainty through power purchase agreements (PPAs) or similar mechanisms. The report compares three specific proposals (by Corneli, Gimon, and Pierpont), identifying six core commonalities: the use of long-term contracts, voluntary participation, coordination with short-term markets, incremental implementation, optimized policy guidance, and organic implementation pathways. The authors suggest that these long-term markets can better identify efficient portfolios of VRE, storage, and flexible load across broad regions, reducing the risk of overbuild or incompatible resource mixes.

The report finds that a significant portion of the U.S. coal fleet is now more expensive to operate than replacing it with new local wind and solar power. In 2018, 74% of the fleet was 'at risk' of being undercut by renewables, a figure projected to rise to 86% by 2025. The analysis emphasizes that these findings are conservative because they only consider resources within 35 miles of existing plants and do not account for broader transmission expansion or combined energy portfolios.

The document argues that replacing high-cost equity with lower-cost corporate debt or securitized bonds can reduce consumer rate increases associated with the early retirement of fossil fuel plants. It examines the trade-offs between shareholder returns and consumer costs, suggesting that refinancing 'regulatory assets' can mitigate stranded asset risks and accelerate the transition to clean energy resources like wind and solar.

The document analyzes the role of depreciation in managing stranded assets during the early retirement of coal-fired power plants. It explains how regulators can use depreciation schedules and 'regulatory asset' accounts to balance the interests of utilities, consumers, and clean energy advocates. Key policy options discussed include accelerating depreciation to match retirement dates or extending schedules to reduce immediate rate shocks for consumers. The brief also highlights the potential for refinancing high-cost equity with lower-cost debt to lower the overall cost of the energy transition.

The briefing examines the financial challenges and opportunities associated with the early retirement of coal-fired power plants in the United States, using Colorado as a case study. It highlights that the marginal cost of energy (MCOE) for many coal plants now exceeds the cost of new wind and solar resources. To manage the resulting 'stranded assets' and undepreciated plant balances, the author proposes a transition strategy involving financial analysis of public data, the use of regulatory assets, and refinancing mechanisms such as debt-for-equity swaps and securitization. These tools are intended to reduce consumer costs, maintain utility investor returns, and fund just transition initiatives for affected workers and communities.

The document outlines a framework for transitioning from uneconomic fossil fuel power plants to cheaper clean energy, specifically addressing the financial challenges faced by regulated utilities. It highlights the need for regulatory adaptation because utilities may attempt to keep uneconomic plants operational to maintain rates of return. The briefing introduces four specific areas of focus: analyzing the financial impact of transitioning from fossil to clean energy (using Colorado as a case study), the 'steel for fuel' concept where capital is reinvested in renewables to improve shareholder earnings, the role of depreciation accounting in determining asset value during early retirements, and the use of debt-for-equity refinancing to reduce the rate burden on consumers when addressing unrecovered investment balances.

The policy brief examines the "steel for fuel" strategy, where utilities replace fossil fuel plants—which incur pass-through fuel costs with no earnings potential—with wind and solar assets that allow for regulated equity returns. Using Xcel Energy as a primary example, the document explains how this transition can reduce consumer bills through fuel savings while maintaining or increasing shareholder value. It highlights the role of competitive bidding and the balance between utility ownership and independent power producers (IPPs) to ensure the lowest costs for consumers.

The guide 'Navigating Utility Business Model Reform' aims to support industry actors in implementing utility business model reforms by outlining foundational elements of various reform options, posing key questions for applicability, and identifying illustrative experiences and policy implementation options.

Cement production accounts for 5.6% of global CO2 emissions, split between thermal fuel combustion (30-40%) and limestone calcination process emissions (60-70%). The report highlights that concrete naturally re-absorbs CO2 through carbonation, sequestering roughly 48% of process emissions over several decades. To reach carbon neutrality by 2050, the author models scenarios suggesting that capturing 80% of process emissions is sufficient if electricity is decarbonized, or 53% if thermal fuels are also fully decarbonized. Mitigation strategies discussed include energy efficiency, clinker substitution (reducing clinker content to 60%), and novel technologies from CarbonCure and Solidia.

The research note analyzes a U.S. Department of Energy proposal to subsidize uneconomic power plants to maintain grid reliability. It estimates that keeping six FirstEnergy coal and nuclear plants online for two years would cost approximately $2 billion. The author contends that these funds would be better spent on locally-led economic diversification and workforce development, noting that grid operators and reliability bodies do not believe such interventions are necessary for stability. The document suggests that redirecting these funds could provide over $300 million per affected community to support a just transition.

The document predicts that freezing federal fuel economy standards at 2020 levels would cost the U.S. economy $450 billion through 2050 and increase transportation sector greenhouse gas emissions by 11% by 2035. It notes that these costs and emissions increases would be lower if California retains its authority to set more stringent standards. The analysis indicates that while initial costs of manufacturing might decrease, these are outweighed by rising fuel expenses, with the primary beneficiaries being oil companies.

The research note analyzes California's consignment auctioning mechanism, where the government auctions free allowances on behalf of companies and returns the revenue to them. This hybrid approach is proposed as a solution for China's national ETS to enable price discovery and price collars while cushioning the economic impact on energy-intensive, trade-exposed sectors and bypassing institutional barriers regarding government revenue accounts.

The analysis finds that the Pan-Canadian Framework (PCF), if fully implemented, will leave a 2030 emissions gap of 161 million metric tons (MMT), which is 3.7 times larger than the 44 MMT shortfall predicted by the Canadian government. While an 'Extended' scenario—strengthening PCF policies through 2050—comes closer to the 2030 target, it still falls short of Canada's mid-century goal to reduce emissions by 80-90 percent below 2005 levels. The report highlights that the carbon tax and methane capture are the most effective PCF policies for 2030, and that both the PCF and PCF Extended scenarios would result in significant annual economic savings and thousands of lives saved by 2050 due to reduced particulate matter emissions.

The report finds that the Western Climate Initiative (WCI) carbon market, comprising California, Quebec, and Ontario, is experiencing significant oversupply. This surplus, estimated at 270 million metric tons (MMT) through 2020, is driven by economic factors, renewable energy innovation, and the 2009 recession. Because allowances can be banked, this oversupply threatens to undermine the 2030 climate targets by effectively raising future emission caps. The author recommends that WCI jurisdictions adjust future caps downward by an amount equal to the privately held allowances banked by the end of 2020, citing the success of the Regional Greenhouse Gas Initiative (RGGI) in using a similar approach.

The research note analyzes four implementation scenarios for the DOE's Grid Resilience Notice of Proposed Rulemaking (NOPR), which would compensate coal and nuclear plants for costs not recovered in wholesale markets. The analysis finds that annual customer costs could range from $311 million to $10.6 billion, with a high concentration of benefits accruing to a small number of companies, particularly in the PJM region.

The document argues that the traditional cost-of-service regulation (COSR) model creates a capital bias that hinders the integration of distributed energy resources (DERs). To transition utilities into distribution system optimizers (DSOs), the author proposes integrated distribution planning (IDP) to reveal the locational value of DERs. Two regulatory pathways are examined: an information-intensive approach that separates the DSO function from asset ownership to create competitive markets, and an outcome-focused approach using performance-based regulation (PBR) to align utility profits with system optimization and public policy goals.

The document examines the challenges RTOs face as the U.S. grid shifts from large central generators to variable renewables and distributed energy resources (DERs). It argues that 'flexibility'—the ability to respond to changes in supply and demand across various timeframes—is essential for reliability and cost minimization. The authors recommend eliminating self-scheduling for all generators and imports, preserving negative pricing, and improving the coordination between natural gas and electricity markets. It also suggests creating technology-neutral products that value specific capabilities, such as ramping and frequency response, and highlights successful examples like MISO's Dispatchable Intermittent Resource category and CAISO's Flexi-Ramp product.

The document analyzes the challenges that high levels of variable renewable energy (VRE) pose to current restructured wholesale electricity markets, specifically regarding the erosion of the price-duration curve's central gradient used for long-term cost recovery. It proposes two future market paths: one continuing to rely on spot markets enhanced by demand elasticity and storage, and another 'bifurcated' model that separates a long-term 'firm market' for capital-heavy assets from a residual spot market for real-time balancing.

A U.S. Court of Appeals ruling vacating the EPA's SNAP program threatens to prevent the avoidance of up to 9.5 billion metric tons of HFC emissions by 2050 and may hinder the U.S. ability to meet its commitments under the Kigali Amendment to the Montreal Protocol.

The report analyzes the California-Quebec linked cap-and-trade program, finding that allowance supply has consistently exceeded emissions from 2013 to 2015, leading to periodic undersubscription at auctions. While recent low auction sales (11% in May 2016 and 18% in February 2017) are viewed as aberrations, the author argues that systemic oversupply persists. Prospective analysis suggests that 78-86% of remaining allowances will be needed for compliance through 2020, with auction demand likely averaging 71-81%. To improve stringency and revenue stability, the report recommends lowering caps, switching to annual compliance, increasing the price floor, and reducing free allowance allocations.