Electrical power grids and electric utility companies are facing the prospect of higher costs as demand rises for the generation of electricity and transmission lines, the National Institute of Standards and Technology said Tuesday.
NIST has proposed capping the annual cost of generating electricity at $2.85 per kilowatt-hour to encourage energy efficiency and promote more investment in electric grid and transmission infrastructure.
The agency is also proposing to require that power plants and transmission facilities be able to deliver electricity to consumers at lower cost than the current rate, up to $1.70 per kiloWatt-Hour.
That’s about 20 cents lower than the average price of $2,000 per kilogramme for a new natural gas power plant, according to the NIST.
It would also provide a major stimulus for the country’s energy transition, NIST said.
“With electricity prices expected to rise to a level that will make electric generation economically unaffordable for many households, it is critical that the NISTA Act be strengthened to ensure that the government has a plan to ensure an energy transition in the future that meets the needs of today’s economy,” NIST Director Robert L. Smith said in a statement.
In response to the proposals, the American Electric Power Association said the government should not be considering capping power prices.
“The real costs of electricity generation and distribution are a function of the demand for electricity, not its price,” said the group’s president, Ken M. Johnson.
According to NIST, the average annual cost for electricity generation in the United States has risen by 20 percent since the early 1980s.
Last year, the U.S. had a surplus of 6.4 gigawatts of electricity, more than any other country in the world.
Since the 1970s, the nation’s average annual increase in electricity production has been more than 20 percent.
Currently, the country has more than 3.8 gigawatts, more per capita than any European nation, according the NISS.
But the U,S.
has not been able to meet the nation�s demand for energy for the last three decades, the NISA said.
“This shortfall of new capacity is a consequence of declining oil and natural gas production, as well as a failure to implement policies to reduce greenhouse gas emissions and curb carbon emissions,” the Nissas statement said.NIST’s plan also calls for increasing the size of the National Renewable Energy Laboratory and other federal government agencies to support more wind and solar energy.
Meanwhile, NISS is seeking public comments on the NisTA proposal.
More to come.