What should the cleantech industry be thankful for this year?
According to Rick Thompson, Greentech Media's co-founder and president, it's the power that distributed generation is starting to wield: “Cleantech should be thankful that it finally has a disruptive force that is painful enough to change regulation.”
Digging deeper into that theme, the GTM team came up with its list for 2014.
California leads the way
“I'm thankful for the state of California. First, there's the sunset of the California Solar Initiative, which has hands down been the strongest state policy influence on distributed solar in the U.S. and has played a major role in pushing residential and commercial solar to where it is today in the U.S.,” said MJ Shiao, director of solar research at GTM Research.
“Furthermore, right now, it's the only state that's systematically looking at the influence of high-penetration PV integration through the Rule 21 interconnection filings.”
Ravi Manghani, senior energystorageanalyst with GTM Research, gave thanks to California’s Independent System Operator for starting the energy imbalance market between the Northwest and Southwest. “This is a small step toward integrated markets in the Western U.S.,” said Manghani.
California also received praise for its work on integrating distributed resources, including storage. With the passage of AB 327 in late 2013, the state required its large investor-owned utility to proactively plan for a distributed system.
“Finally, a state's utilities will make an effort to simulate dynamic three-phase power flows on the distribution grid,” said Ben Kellison, director of grid research with GTM Research. “This is the first step to building out detailed business cases for distributed dynamic resources. It may also be the key policy to change the face of how we plan and invest in the distribution grid. This is important stuff that is hard to do and continues to fly under the radar.”
Both Manghani and Greentech Media Editor-in-Chief Eric Wesoff also pointed to Southern California Edison’s distributed energy storage procurement, which is geared to help the Los Angeles and Orange County regions make up for the closure of the San Onofre nuclear power plant, as a development that the storage industry should be thankful for.
Another utility made the thankful-for list, but not quite in the same way as SCE. Shiao, Wesoff and Manghani also mentioned the Hawaii Public Utility Commission for playing tough with HECO, not only on distributed solar, but also “requiring them to have more detailed plans for critical power supply and reliability, integration of distributed resources and demand response,” said Manghani.
Praise was not reserved for the Western U.S. Senior Editor Stephen Lacey, Grid Edge Research Director Steve Propper and this writer all gave thanks to New York state’s Public Utility Commission’s bold energy reform, Reforming the Energy Vision. Although the REV proceeding is just getting underway, there is an enormous amount of promise in its goal of eliminating peak load and transforming distribution utilities into managers of a distributed energy platform.
Even the praise for New York, however, elicited more praise for California from one analyst. “I’m not sure how REV will work without [California’s] type of grid power-flow analysis and dynamic resource comparison tools,” that AB 327 requires, said Kellison.
Beyond REV, this writer thinks the industry should be thankful for green banks in states like New York and Connecticut, as well as the U.K. and Australia. These public-private partnerships have the opportunity to open up the promising, but challenged, energy efficiency markets in new ways.
America gains traction on the global stage
Lacey said the solar industry should be grateful for the Green Tea Coalition, which is banding together with environmental activists to fight for more solar in the Southeast U.S. and America’s heartland.
Omar Saadeh, senior grid analyst with GTM Research, took a more national view. He said the renewables and efficiency industries should be thankful for the U.S. Environmental Protection Agency’s new carbon rules, which could grow renewable capacity by an additional 70 percent in the next decade. Although there will likely be years of litigation ahead, “This year's EPA ruling on carbon emissions may finally alter the climate change status quo policy of ‘Do as I say, not as I do,’” said Saadeh.
Even without climate rules, the industry has surged. “I'm thankful that the U.S. will install two to three times more solar than Germany this year, so I can stop hearing about the unquestioned superiority of feed-in tariffs,“ said Shiao. "I’m extremely thankful for them buying down the initial cost of scaling up the industry.”
Also on a global scale, Shayle Kann, SVP of research for GTM Research, was grateful for the recent deal between the two largest emitters of carbon dioxide. “The U.S.-China climate agreement provides some much-needed hope for a global accord and some real action,” noted Kann.