Implications of Globalization for Monetary Policy

This paper argues that the implications of globalization for monetary policy come mainly through two channels: On the one hand, the many structural changes, which are associated with the globalization process, cause an increase in uncertainty surrounding monetary policy. This leads to an increase in uncertainty about how to interpret macroeconomic data/indicators and about the monetary transmission mechanism. On the other hand, by strengthening the process of global economic integration, the globalization process increases international competition. Thereby, globalization forces market players to make structural adjustments or reforms which change the conditions or constraints under which monetary policy is implemented.

Determining Utility System Value of Demand Flexibility From Grid-interactive Efficient Buildings

This report focuses on ways current methods and practices that establish the value to electric utility systems of distributed energy resource (DER) investments can be enhanced to determine the value of demand flexibility in grid-interactive efficient buildings that can provide grid services. The report introduces key valuation concepts that are applicable to demand flexibility that these buildings can provide and links to other documents that describe these concepts and their implementation in more detail.The scope of this report is limited to the valuation of economic benefits to the utility system. These are the foundational values on which other benefits (and costs) can be built. Establishing the economic value to the grid of demand flexibility provides the information needed to design programs, market rules, and rates that align the economic interest of utility customers with building owners and occupants. By nature, DERs directly impact customers and provide societal benefits external to the utility system. Jurisdictions can use utility system benefits and costs as the foundation of their economic analysis but align their primary cost-effectiveness metric with all applicable policy objectives, which may include customer and societal (non-utility system) impacts.This report suggests enhancements to current methods and practices that state and local policymakers, public utility commissions, state energy offices, utilities, state utility consumer representatives, and other stakeholders might support. These enhancements can improve the consistency and robustness of economic valuation of demand flexibility for grid services. The report concludes with a discussion of considerations for prioritizing implementation of these improvements

Understanding and Responding to Persistently High Unemployment

[Excerpt] In this study, CBO examines a broad array of policy approaches designed to reduce unemployment. Some of those policies would aim to boost the economy and demand for goods and services, reflecting the fact that the increase in unemployment in general and long-term unemployment in particular is primarily attributable to weak demand for labor, which, in turn, is the result of weak aggregate demand. Policies to increase demand for workers could reduce unemployment substantially in 2012 and 2013, although those policies could be costly to the federal government and would vary greatly in their effectiveness per dollar of budgetary cost. Other policies that CBO examined, including worker training, changes to the unemployment insurance (UI) system, and helping the unemployed transition to new jobs, would probably not have a significant effect on the overall unemploymentrate during the next two years, primarily because of their limited scope, but they could provide support to certain groups and have longer-run positive effects

Enhanced Reserve Procurement Policies for Power Systems with Increasing Penetration Levels of Stochastic Resources

abstract: The uncertainty and variability associated with stochastic resources, such as wind and solar, coupled with the stringent reliability requirements and constantly changing system operating conditions (e.g., generator and transmission outages) introduce new challenges to power systems. Contemporary approaches to model reserve requirements within the conventional security-constrained unit commitment (SCUC) models may not be satisfactory with increasing penetration levels of stochastic resources; such conventional models pro-cure reserves in accordance with deterministic criteria whose deliverability, in the event of an uncertain realization, is not guaranteed. Smart, well-designed reserve policies are needed to assist system operators in maintaining reliability at least cost. Contemporary market models do not satisfy the minimum stipulated N-1 mandate for generator contingencies adequately. This research enhances the traditional market practices to handle generator contingencies more appropriately. In addition, this research employs stochastic optimization that leverages statistical information of an ensemble of uncertain scenarios and data analytics-based algorithms to design and develop cohesive reserve policies. The proposed approaches modify the classical SCUC problem to include reserve policies that aim to preemptively anticipate post-contingency congestion patterns and account for resource uncertainty, simultaneously. The hypothesis is to integrate data-mining, reserve requirement determination, and stochastic optimization in a holistic manner without compromising on efficiency, performance, and scalability. The enhanced reserve procurement policies use contingency-based response sets and post-contingency transmission constraints to appropriately predict the influence of recourse actions, i.e., nodal reserve deployment, on critical transmission elements. This research improves the conventional deterministic models, including reserve scheduling decisions, and facilitates the transition to stochastic models by addressing the reserve allocation issue. The performance of the enhanced SCUC model is compared against con-temporary deterministic models and a stochastic unit commitment model. Numerical results are based on the IEEE 118-bus and the 2383-bus Polish test systems. Test results illustrate that the proposed reserve models consistently outperform the benchmark reserve policies by improving the market efficiency and enhancing the reliability of the market solution at reduced costs while maintaining scalability and market transparency. The proposed approaches require fewer ISO discretionary adjustments and can be employed by present-day solvers with minimal disruption to existing market procedures.Dissertation/ThesisDoctoral Dissertation Electrical Engineering 201

Online Modified Greedy Algorithm for Storage Control under Uncertainty

This paper studies the general problem of operating energy storage under uncertainty. Two fundamental sources of uncertainty are considered, namely the uncertainty in the unexpected fluctuation of the net demand process and the uncertainty in the locational marginal prices. We propose a very simple algorithm termed Online Modified Greedy (OMG) algorithm for this problem. A stylized analysis for the algorithm is performed, which shows that comparing to the optimal cost of the corresponding stochastic control problem, the sub-optimality of OMG is bounded and approaches zero in various scenarios. This suggests that, albeit simple, OMG is guaranteed to have good performance in some cases; and in other cases, OMG together with the sub-optimality bound can be used to provide a lower bound for the optimal cost. Such a lower bound can be valuable in evaluating other heuristic algorithms. For the latter cases, a semidefinite program is derived to minimize the sub-optimality bound of OMG. Numerical experiments are conducted to verify our theoretical analysis and to demonstrate the use of the algorithm.Comment: 14 page version of a paper submitted to IEEE trans on Power System

Analysis of market incentives on power system planning and operations in liberalised electricity markets

The design of liberalised electricity markets (e.g., the energy, capacity and ancillary service markets) is a topic of much debate, regarding their ability to trigger adequate investment in generation capacities and to incentivize flexible power system operation. Long-term generation investment (LTGI) models have been widely used as a decision-support tool for generation investments and design of energy policy. Of particular interest is quantification of uncertainty in model outputs (e.g., generation projections or system reliability) given a particular market design while accounting for uncertainties in input data as well as the discrepancies between the model and the reality. Unfortunately, the standard Monte Carlo based techniques for uncertainty quantification require a very large number of model runs which may be impractical to achieve for a complex LTGI model. In order to enable efficient and fully systematic analysis, it is therefore necessary to create an emulator of the full model, which may be evaluated quickly for any input and which quantifies uncertainty in the output of the full model at inputs where it has not been run. The case study shows results from the Great Britain power system exemplar which is representative of LTGI models used in real policy processes. In particular, it demonstrates the application of Bayesian emulation to a complex LTGI model that requires a formal calibration, uncertainty analysis, and sensitivity analysis. In power systems with large amounts of variable generation, it is important to provide sufficient incentives for operating reserves as a main source of generation flexibility. In the traditional unit commitment (UC) model, the demand for operating reserves is fixed and inelastic, which does not reflect the marginal value of operating reserves in avoiding the events of load shedding and wind curtailment. Besides, the system-wide reserve constraint assumes that the operating reserve can be delivered to any location freely, which is not true in real-world power system operations. To recognize the value and deliverability of operating reserves, dynamic zonal operating reserve demand curves are introduced to an enhanced deterministic UC model for co-optimizing the day-ahead schedules for energy and operating reserves. In the case study on the RTS-73 test system, comparisons are made between the choices of reserve policies (e.g., single, seasonal or dynamic zones) and of different reserve zonal partitioning methods. Results suggest that the enhanced deterministic UC model produces on average lower operational cost, higher system reliability and higher energy and reserve revenues than the traditional one. Finally, we discuss future directions of methodological research arising from current energy system challenges and the computer models developed for better understanding of the impacts of market incentives on power system planning and operations

Impacts of Federal Policies and Programs on Wetlands

Human activities have resulted in the loss of about half of the original 221 million acres of wetlands in the conterminous 48 states. Federal laws, policies, and programs have had major impacts on the nation's wetland resources. Initially, they encouraged and subsidized the draining and filling of wetlands, the flooding of wetlands behind dams, and the diversion and alteration of streamflows to riparian wetlands. More recently, federal policies have been directed to conserving and preventing further net losses. The focus of this study is on the impacts of federal policies on riparian wetlands, i.e., those formed at the interface of rivers and streams and uplands and that require occasional flooding to maintain the health of their ecosystems. The study identifies the trends in wetland acreage, describes the principal federal policies and programs impacting riparian wetlands, summarizes what is currently known or can be deduced from existing research about the impacts of these policies and programs on riparian wetlands, identifies key knowledge gaps, and suggests priorities for additional research. The policies that once directly and indirectly encouraged drainage of wetlands as well as water use and development practices harmful to wetlands have for the most part been abandoned. In some cases they have been replaced by new policies designed to protect the remaining wetlands and to encourage wetland restoration and creation. From the mid-1950s to the early 1990s conversion of wetlands to agriculture accounted for some 70 percent of total conversions. From 1982 to 1992, however, agriculture actually contributed a small net increase in the number of wetland acres. Changes in federal agricultural policies played a major role in this turn around. Overall, net wetland losses have been slowed but not ended since a "no net loss" policy was established in 1989. Several lines of research could contribute to the design and implementation of policies to achieve the "no net loss" goal. Research is needed to understand how farmers' incentives to convert wetlands to agricultural uses would be affected should Swampbuster become toothless as farm subsidies are eliminated or agricultural prices rise. And, if this analysis suggests wetland losses to agriculture would likely accelerate, alternative market-based and regulatory strategies for curbing these losses should be examined. As wetlands are lost to development and other pressures, achieving the no net loss goal requires that these losses be compensated. Research on the physical characteristics and the ability of different wetlands to provide social values such as fish and wildlife habitat, retention of flood waters, and water quality improvements would provide a better basis for determining how much society should invest in protecting, enhancing, restoring, or creating wetlands and whether these investments adequately compensate for the functions of lost wetlands. Research also is needed to determine how mitigation banking might be made more efficient and effective in ensuring social values are adequately compensated when wetlands are lost.

Different Approaches to Supply Adequacy in Electricity Markets

This paper studies the electricity market design long run problem of ensuring enough generation capacity to meet future demand (resource adequacy). Reform processes worldwide have shown that it is difficult for the market alone to provide incentives to attract enough investment in capacity reserves due to technical and institutional features. We study several measures that have been proposed internationally to cope with this problem including strategic reserves, capacity payments, capacity requirements, and call options. The analytical and practical strengths and weaknesses of each approach are discussed .Supply adequacy, electricity markets