by Jeff St. John
September 30, 2017

GTM's New York REV Future 2017 conference is over. For those who couldn’t make it -- or for attendees who stepped out during key moments, like the caped protester caper during New York energy czar Richard Kauffman’s keynote talk -- we’ve got you covered. 

Here are some of the highlights from the two-day series of interviews, panel discussions and case studies, complete with links to full on-demand video of each session. 

Opening keynote, New York City

New York City accounts for about 40 percent of the state’s carbon emissions profile, making it a critical piece to REV’s efforts. To get grounded on this subject, Steve Propper, director of consulting and content strategy for GTM Research, interviewed Nilda Mesa, director of the Urban Design Lab/Earth Institute’s Urban Sustainability & Equity Planning Program, and formerly the director of the New York City Mayor’s Office of Sustainability. 

In New York City, about 70 percent of GHGs in the city come from buildings, and only 20 percent from transportation, making efficiency and distributed energy an important part of its overall carbon reduction goals. “To the extent renewables can be deployed that feed into the city, that’s probably one of your fastest pathways to reducing carbon emissions,” she said, referring to variables like the state’s offshore wind potential off Long Island. 

In the shorter term, “I tend to think of energy efficiency as a renewable resource -- better than renewables," said Mesa. However, "the structure for financing isn’t quite there yet. That’s what I’d hope to see in the next few years.” 

At the same time, roughly 2.3 million people in the city quality for low-income rates, and the “same fuels that create carbon emissions also create air pollution, and it’s some of our poorest neighborhoods that have some of the poorest air quality in the U.S.,” she said. 

“Energy storage is going to be critical to how we figure out how to move forward on this,” she added, but for now, the city’s fire department has put a halt on lithium-ion batteries being installed behind the meter.

“FDNY has some very legitimate, very real concerns about safety and battery storage in density populated buildings. These things are going to be worked out. It’s going to take a bit of time. But I don’t see how we have the kind of flexibility, the resiliency, the redundancy we need unless battery energy storage gets involved.” 

Finally, “I think that cities and states are incredibly powerful” in pushing carbon reduction policies despite the Trump administration’s dismantling of federal climate change efforts. “Now cities have to do it again on their own. But frankly, until the last few years of the Obama administration, they had been doing that.” 

Click here to watch this panel on-demand.

Policy Debate: How Has REV Stimulated Markets and Changed the Role of the Utility?

As we noted in our conference coverage this week, Tuesday’s conference kicked off with a bang. Moderator Katherine Tweed asked panelists to judge whether REV is “helping or hindering markets” today.

In response, Todd Wilson, partner with clean energy law firm Wilson Sonsini Goodrich & Rosati, laid down the angry view of solar, storage and other DER players. "For an innovator, a technology developer, or anyone trying to put money to work in REV, it’s been slow as heck, and it’s been frustrating. We’re making progress, but I don’t see us getting any closer to getting to use non-utility money, or project finance…to make distributed energy happen at scale in New York state yet.” 

The main problem is lack of certainty for the value of distributed energy resources (VDER) metrics to replace solar net metering, both for larger-scale solar projects in the short term, and DERs over the long haul. We’ve covered the problems that solar and environmental groups have with the Public Service Commission’s latest REV ruling, including the wildly varying and often lowballed marginal energy valuations from some utilities; plus, the three-year scope for reconsideration, which prevents project developers from being able to offer would-be investors reliable revenue streams like those net metering provides.

Scott Weiner, deputy for Markets & Innovation at the state’s Department of Public Service, said REV is helping, "but not fast enough.” In the past three years, some parts of REV have taken big steps -- specifically non-wires alternatives like the Brooklyn-Queens Demand Management project -- which are contracting for gigawatts of DER capacity ranging from mass-market efficiency to grid battery storage. 

Con Edison’s VP of DER Integration Matt Ketschke said that REV’s work may not please all stakeholders, but over the past three and a half years, “we’ve come pretty far.” Utilities are now considering DERs as an integral part of their future.

As for how to best calculate VDER, “We want to have a degree of certainty to those marginal cost studies,” since long-term rate changes have to account for long-term trends like the decoupling of economic growth from load growth, said Ketschke.

Click here to watch this panel on-demand.

Urban Future Lab Presents: Successful REV Pilots

This panel is worth watching for fans of distributed energy resource management systems (DERMS) technology, since it features two companies with significant work underway at utility scale -- Smarter Grid Solutions (SGS) and Opus One

Bob Currie, CTO and co-founder of SGS, noted that the 85-employee company has been around for 10 years and has about 300 megawatts of resources, including wind, solar and domestic electric water heaters, under its control. That figure is set to rise to about 500 megawatts by year’s end, mainly in its home territory of the U.K., but also in Germany, California, and, of course, New York. 

Its first REV project with Avangrid’s New York State Electric & Gas Corporation (NYSEG) and Rochester Gas and Electric Corporation (RGE) got started last year, and applies its software to the challenge of integrating the rising number of DER interconnections with the utilities’ capacity estimation processes -- an important improvement in a state with a large backlog of proposed solar projects. 

SGS is also partnering with Con Edison and microgrid provider GI Energy in a test of four 1-megawatt batteries that will be sited on customer property, serve peak demand reduction needs when the utility needs it, and bid capacity into the New York Independent System Operator energy markets at other times. Another New York utility is also working on getting a REV demo established, noted Currie.

Opus One CEO Joshua Wong highlighted the Toronto-based company’s key REV project, National Grid’s Distributed System Platform pilot, where it’s being asked to demonstrate two-way power flow modeling of distribution circuits to dispatch and control DERs to solve grid problems. While the project has faced its challenges and delays, “In December, we should be turning on the state’s first DSP,” he said. 

Of course, the path from demo project to full-scale implementation will take some time, Currie noted. In the U.K., it took about five years for his company to prove its capabilities to the point where it could compete with traditional resources -- a time frame that’s potentially relevant to the discussions in New York.

Click here to watch this panel on-demand.

Afternoon keynote: The Energy Vision for 2018-2022

We don’t yet have the video prepared for Greentech Media’s keynote interview with Richard Kauffman, New York state’s “energy czar”-- but we can direct readers to the video of the unexpected protest by the New York Energy Democracy Alliance that interrupted the half-hour discussion.

It was an interesting show, featuring a caped duo of capitalist antiheroes reciting mock pro-utility slogans in unison, and a flier demanding more efforts to bring low-income homeowners into the initiative. For what it’s worth, the conference did feature several discussions on the subject of integrating low-income customers into the state’s energy transformation. 

Financing a Distributed Energy Marketplace: Considerations for New and Changing DER Asset Owners

This was a broad-yet-pointed overview of financing solar, as well as solar-plus-storage and other DERs. It featured two big private capital representatives: Alta Yen, managing director of investment strategy for GE Energy Financial Services, and Nick Sangermano, managing director at CohnReznick Capital. It also included a public financing player, Nicholas Whitcombe, investment and portfolio managing director for the New York Green Bank.

Sangermano said that it’s “never been a better time to raise capital” for distributed solar, and that he sees storage today being where distributed solar was four years ago. In particular, he sees potential for energy storage to differentiate individual solar projects in their "'knife fight in a phone booth' competition over financing.” CohnReznick announced on Wednesday that it participated as adviser for its first energy storage financing deal, a $25 million investment in Sacramento-based project developer JLM.

Yen presented a far more cautious outlook, noting that GE doesn’t invest in brand-new technology because it needs to have an understanding of the technology risks 10 to 15 years out. The same goes for predictable revenue streams, something that energy storage lacks at present. 

“We’re looking for projects that have revenue certainty where we can wrap our heads around the cost,” she said. “We’re also looking for potential scalability. Each of these projects today is essentially bespoke, which drives up the cost and the complexity.” 

At the same time, responding to an audience question about how small-scale they’re willing to invest, Yen responded that “we’ve done projects as small as $1 to $3 million dollars, as long as we know there’s a pipeline attached to it.” 

Whitcombe agreed that “we can do the $1 million deal at New York Green Bank. But we’d rather do twenty-five $1 million deals in an aggregation facility, where the asset’s the same, the contract’s the same, then we can build up a portfolio.” 

Yen also noted that GE’s analysis of energy costs saved by projects includes variables around change to utility rate structure. “Really drilling down and understanding that, and understanding what can change going forward -- that’s quite tough to quantify. There needs to be ample return for the risk that we’re taking. We view that as a real risk -- some investors don’t view that as a real risk.” 

Click here to watch this panel on-demand.

Wholesale Markets: Expanding Renewable and DER Market Development

This panel, led by GTM Research analyst Elta Kolo, focused on how state grid operator NYISO is working on integrating DERs into its wholesale energy markets.

Michael DeSocio, NYISO’s senior manager of market design, described the path this effort has taken since the February release of its distributed energy resources road map, a five-year plan to “develop a framework for bringing DER into the wholesale market in as efficient a way as possible."

A lot of time has been devoted to developing a pilot program. The final details are expected to be announced in late October. “We need to understand what they're capable of and what they’re not capable of,” said DeSocio. 

NYISO’s pilot, however, is largely based on virtual testing of these capabilities, and doesn’t anticipate paying its participants -- putting it several steps behind the more aggressive DER integration work being done by California grid operator CAISO. 

That may be as well, noted Melissa Kemp, director of Northeast U.S. policy for Cypress Creek Renewables. Wholesale DER aggregation is an “interesting idea,” but far more challenging to convert into steady revenue streams. Still, there may be opportunities to stack new NYISO ancillary services on top of delivering energy, or design non-wires alternatives that can also provide services to the bulk transmission system, she said. 

Click here to watch this panel on-demand.