If one thing is certain about the direction of carbon policy in the US, it’s that there is a tremendous amount of uncertainty about where it’s heading and when. A portfolio approach to carbon planning is providing a number of US electric utilities a solid ground for cost, investment and operations decisions to take on the carbon challenge.

The complex nature of modern utility strategic planning requires a forward-looking, fully integrated portfolio management and optimization tool—one that helps the energy industry create a robust, flexible strategy set that will stand the tests imposed by constantly changing regulatory requirements, uncertain funding and rate recovery mechanisms, market dynamics, evolving environmental policies, and uncertain timing.

KEMA is applying a new portfolio approach to carbon planning for a number of US utilities that integrates a utility’s own generation asset data with KEMA insight into the costs of generation and direction in carbon policy development. At the heart of this initiative is a suite of quantitative energy and policy tools that brings together all aspects of the generation management lifecycle in one dashboard. The climate portfolio optimization model provides utility decision makers the framework needed for developing and assessing carbon and environmental compliance strategies, the underlying assumptions, and the potential impact on financial and operational performance.

The climate portfolio model is designed to flexibly incorporate the dynamics of any potential compliance strategy at any utility and any legislative variation. And the model offers easy to use ‘dashboards’ that allow for quick evaluation and integration of strategy results. Risks and uncertainties are addressed in a way that allows full understanding of the implications, interdependencies, and the technical and commercial interactions between each potential strategy a utility might undertake in addressing the carbon question

KEMA’s whitepaper, “Strategies for Compliance under Federal Climate Legislation,” demonstrates how the insight gained from the new analytic dashboard helps utilities develop climate portfolio strategies based on rigorous asset and scenario analysis.

The climate portfolio whitepaper is available for download at: www.kema.com/ClimatePortfolio.