Winning in the emerging energy services business
The Electricity Journal, 1996
The energy services industry is about to experience major changes, driven largely by new customer... more The energy services industry is about to experience major changes, driven largely by new customer needs and the push by existing players and new entrants to respond to those needs. The experience of other industries that have gone through similar changes suggests that initiative and prompt action in developing strategies and capabilities will pay off handsomely.
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Papers by Richard Stuebi
rain proposals would result in increasing utility costs over time, the demand for emission offsets from new powerplant units should be satisfied even under conditions of high future growth in electrical generating capacity.
This is because the amount of emissions from new generating units will
be small relative «to the quantity of offsets that could be made available in the emission "allowance" market.
Under the President's July 1989 proposal, most utilities would be able to
reduce their emissions well below their allowance levels via fuel switching, the installation of control technology, or the use of other emission reduction techniques, in order to create more "headroom" for the construction of new generating units. Retirements and decreasing utilization of existing power plants over time would liberate other emission allowances for use by new units. Industrial sources could "opt in" to the acid rain program and provide allowances for new generating units as well. A number of provisions in the recently passed Senate and House bills would make still further sources of allowances available to offset emissions from new generating capacity.
Hoarding of allowances by utilities is unlikely to be a problem since
allowances would be distributed to at least 88 utilities in 34 states, and
many of these utilities would have the ability to cost-effectively free up
more allowances through "overcontrol" than they would need to cover
their own future growth. Even a relatively small number of utilities in a
limited number of states would have the ability to supply all of the allowances needed to cover new capacity growth from those entities that could not otherwise provide their own offsets. At projected prices of up to $800/ton, the incentives for utilities to sell allowances would be considerable.
Moreover, if hoarding did begin to occur, the price of allowances would
respond by rising to higher levels and the incentives for utilities to sell
allowances would become even more compelling, as greater opportunities would develop for reducing costs (and electricity rates).