The week’s grid edge news is extensive: large-scale corporate reorganizations, improvements in integrating behind-the-meter batteries with demand response, multi-part microgrids, and innovations in energy disaggregation.
NRG Energy’s new customer-centric, distributed generation model
NRG Energy last held an Analyst Day presentation in 2015. The NRG from this week’s Analyst Day is a much different company from three years ago — stripped of its utility-scale renewable energy fleet, focused on its retail energy business and serving up distributed energy for commercial and industrial customers.
Last summer, NRG announced a plan to sell up to $4 billion in assets across its coal, gas, solar and wind portfolio, including 6 gigawatts of conventional power plants and more than 3 gigawatts of renewable energy plants, as well as the 15 gigawatts of coal and gas plants of GenOn, the bankrupt generator it acquired in 2012.
In February, Global Infrastructure Partners acquired NRG's controlling stake and 46 percent economic interest in NRG Yield, as well as NRG’s renewable energy development and operations and maintenance businesses, for $1.375 billion in cash proceeds.
The slide below underscores NRG’s shrinking generation fleet between 2015 and 2018.
Once GenOn’s exit is complete, NRG’s fleet will shrink by more than half, from 53 gigawatts to 23 gigawatts. The company will retain 2.9 million retail customers. The new fleet — 46 percent natural gas, 31 percent coal and 15 percent oil — includes 11.5 gigawatts in Texas, 9.7 gigawatts in the mid-Atlantic and Northeast, and about 2.6 gigawatts in the Southwest.
NRG’s retail energy business, meanwhile, has grown from about 2.8 million customers in 2015 to 2.9 million customers in 2018, under brands including NRG, Reliant Energy, Green Mountain Energy and Cirro Energy. The company claims a leading share of residential residential customers in Texas, and leading positions in other competitive markets like Pennsylvania.
NRG’s retail business is much more stable than the generation business, where prices can rise and fall drastically. But it’s also a highly competitive business, limited by the vagaries of state-by-state utility regulatory policy. To compete, NRG is planning to invest about $80 million in increasing that customer base, and about $105 million in “value expansion” — in other words, doing more with the customers it already has.
NRG’s energy services efforts are where its distributed energy efforts are concentrated. NRG has about 4,900 distributed energy customers, as well as about 2,500 megawatts of demand response, largely in the Northeast. It has also been expanding its energy services business to incorporate more distributed energy, such as its December partnership with Cummins to merge backup generators with retail contracts and grid services revenues.
And while it has exited the residential solar installation business, it was the top commercial solar asset owner in 2017, according to Michelle Davis, GTM Research U.S. distributed solar senior analyst.
“It looks like NRG is explicitly pivoting toward a more customer-centric, distributed generation strategy. This has been proven out in the past year as NRG's commercial solar assets have multiplied,” she said. Much of NRG's commercial solar assets are community solar projects, which have been growing immensely in the past two years.
NRG’s expertise in distributed energy deployments includes its contract with Southern California Edison to provide a combined 60 megawatts of capacity to help manage the closure of the San Onofre nuclear power plant. NRG also developed its own software, dubbed SpaceTag, that has mapped out DER potential for more than two dozen utilities.
Itron and sonnen combine behind-the-meter batteries and demand response
Behind-the-meter batteries and demand response are natural bedfellows, and more companies are leveraging the technology combination.
This week’s partnership on the battery-DR front involves smart metering giant Itron and German residential battery vendor sonnen, which announced this week that they’ve integrated their technologies and are actively testing their capabilities in a pilot project in California.
Itron bought its way into the demand response business with its $100 million acquisition of Comverge last year. This week’s announcement involves integrating sonnen’s batteries with Comverge’s IntelliSource platform, and testing their ability to “manage the unique load shapes created by increased deployment of DERs.”
This isn’t the only behind-the-meter connection that Itron is forging. “We plan to partner with several other...vendors so that utilities can access a broad portfolio of DERs to optimize the grid and provide the customer with new choices and value,” Steve Hambric, Itron's vice president of distributed energy management, noted in the press release.
Sonnen has been doing its own battery management through its virtual power plant partnerships in Germany. Late last year it announced its first U.S. project, a 2,900-home development with homebuilder Mandalay Homes in Arizona.
Siemens to manage ComEd’s multi-microgrid integration
Siemens has been building up its microgrid expertise over the past several years, moving from individual microgrid controls to managing fleets of distributed, island-capable assets. Early this year it unveiled its Microgrid Management System, meant to give operators the ability to handle much more complex operations between microgrids and utility operators and energy markets.
Its first test is Pacific Gas & Electric’s Blue Lake Rancheria microgrid, featuring 500 kilowatts of solar PV and 950 kilowatt-hours of batteries alongside diesel generators and load control. Mike Carlson, president of Siemens' Smart Grid North America division, told us the microgrid management platform was also being used by California utility Pacific Gas & Electric, San Antonio municipal utility CPS Energy, in projects with NREL and Duke Energy, and with New York utility Con Edison’s Brooklyn community solar project.
Now it has added Illinois utility ComEd’s showcase microgrid project to the list. Early this week, Siemens announced the Exelon subsidiary has hired it to manage the Bronzeville Community Microgrid. The long-planned $25 million project, backed by $5 million in Department of Energy grants, will integrate with a nearby independently built microgrid at the Illinois Institute of Technology, and has been a central part of ComEd’s plans for integrating distributed energy resources across its territory.
“This project will provide roughly 1,060 customers with clean, sustainable energy and will connect to an existing microgrid on the Illinois Institute of Technology’s campus, marking one of the most advanced clustered urban microgrids in the United States,” according to the company.
ComEd’s microgrid plan, approved by the Illinois Commerce Commission late last month, is not nearly as ambitious as originally envisioned. State legislation introduced in 2016 initially called for as much as $250 million for ComEd and $60 million for utility Ameren for a series of microgrids in the state.
But concerns about putting the burden of paying for these projects on ratepayers led to lawmakers drastically scaling back the plans and the costs of the projects, with even the Bronzeville microgrid’s $25 million in funding coming under fire from the Illinois attorney general.
PG&E gets approval for DERs as power plant replacement
California utilities have contracted for hundreds of megawatts of DERs since the turn of the decade, largely to provide capacity to replace the need to build power plants in the future. But in December, utility Pacific Gas & Electric and state grid operator CAISO announced a plan to use DERs in a new way — to replace an aging power plant without building new transmission lines that would otherwise be needed to keep the entire state’s grid running reliably.
Last week, CAISO approved PG&E’s plan, dubbed the Oakland Clean Energy Initiative, marking progress for the first-of-a-kind use of DERs “as an alternative to fossil-fuel generation for transmission reliability in PG&E's service area.” But the project still needs approval by the California Public Utilities Commission, as well as the Federal Energy Regulatory Commission.
Pecan Street’s super-granular data
Austin, Texas-based Pecan Street, the multifaceted grid edge technology nonprofit, has long been a supplier of data to the broader energy industry. Pecan Street has been sharing this second-by-second data with companies involved in testing energy disaggregation technologies, including at least three Fortune 100 companies, CTO Bert Haskell told us in 2015. It’s also been making its data available to universities and researchers through its WikiEnergy platform since 2014.
This week, Pecan Street announced that it’s released a dataset containing “one year of one-second interval consumer electricity data collected through its volunteer residential research network,” constituting a treasure trove for data-hungry energy disaggregation companies. The dataset includes measurements from 40 homes for whole-home electricity use, solar generation, electric-vehicle charging, HVAC, major appliances and other in-home circuits.
The dataset is free for non-commercial use by university-sponsored researchers through Pecan Street’s Dataport website and can be licensed for commercial use. While the cost of collecting and analyzing one-second data from every circuit in a home is likely prohibitive for commercial use, Pecan Street developed wireless data acquisition and storage techniques, “robust data backhauls, and server-side data storage and manipulation that lay the groundwork for future collection and use of one-second data,” it noted.