Energy Policy & Market Analysis Flashcards
7 cards from real CEA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Energy Policy & Market Analysis flashcards as text
The North American Energy Standards Board (NAESB) is primarily responsible for:
Answer: Developing wholesale and retail energy transaction standards and business practices
NAESB develops standardized business practices and data exchange formats for wholesale and retail natural gas and electricity markets across North America.
Which policy mechanism provides a guaranteed above-market price for renewable energy generation over a long contract period, reducing investor risk?
Answer: Feed-in tariff (FIT)
A feed-in tariff guarantees renewable generators a fixed, above-market rate per kWh for a defined period, providing revenue certainty that lowers the cost of capital for projects.
In wholesale power markets, 'congestion revenue rights' (CRRs) or 'financial transmission rights' (FTRs) are used to:
Answer: Hedge against transmission congestion cost in locational marginal pricing systems
FTRs/CRRs are financial instruments that entitle holders to receive (or pay) the difference in LMPs between two nodes, hedging against congestion charges in LMP markets.
The Energy Independence and Security Act (EISA) of 2007 is most closely associated with:
Answer: Setting the Renewable Fuel Standard and appliance efficiency mandates
EISA 2007 expanded the Renewable Fuel Standard, set new CAFE vehicle efficiency standards, and updated appliance and building efficiency requirements.
In energy market analysis, what does the 'merit order' concept determine?
Answer: The sequence in which power plants are dispatched based on their marginal costs
The merit order stacks generators from lowest to highest marginal cost; the cheapest units are dispatched first and the most expensive unit needed to meet demand sets the market clearing price.
Which market outcome occurs when electricity prices fall below zero in wholesale spot markets?
Answer: Generators with high shutdown costs or production tax credits pay to keep running
Negative prices occur when inflexible generators (nuclear, wind receiving PTCs) find it more economical to pay the market to take their output than to incur high startup/shutdown costs or forfeit tax credits.
A utility planning to comply with a carbon cap using a mix of efficiency programs and renewable procurement would most appropriately evaluate these options using:
Answer: A cost-effectiveness test such as the Total Resource Cost (TRC) test
The TRC test measures whether the total benefits of an energy resource or efficiency program exceed total costs from a societal perspective, making it appropriate for comparing diverse compliance options.