Let’s jump into this week’s grid edge news roundup in the same place we started last week: with the study ordered by Energy Secretary Rick Perry to find out if renewable energy is destabilizing the nation’s grid. According to a leaked rough draft of the report, the answer, as many in the electricity sector would have expected, is no -- cheap natural gas and falling demand are largely to blame for the latest coal and nuclear power plant closures, not renewables.
But the final report may not look like the leaked draft. Industry watchers are still awaiting additions and deletions to the final report that could alter this consensus finding, and yield a more coal- and nuclear-friendly conclusion at the expense of wind and solar power.
Any suggestions from the final report will still have to be made into actual policy by the Federal Energy Regulatory Commission, under a process that could stretch into a year or more -- and that’s without the backlog building up behind the agency’s lack of a quorum since February. But if the Trump administration’s nominees to fill its seats are confirmed by the Senate, FERC will have a decidedly pro-utility set of commissioners to hear its arguments.
Awaiting the DOE grid reliability study, a more utility-friendly FERC
FERC has been backlogged since the departure of Commissioner Norman Bay in February, leaving Acting Chairman Cheryl LaFleur and Commissioner Colette Honorable unable to act on the commission's extensive docket. Throughout the Obama years, the agency enacted a series of policies expanding the role that U.S. grid operators play in renewable energy integration, energy storage, demand response and distributed energy.
In May, Trump nominated Neil Chatterjee, a long-time adviser to Senate Majority Leader Mitch McConnell (R-KY), and Rob Powelson, a Pennsylvania utility commissioner, to fill two of the three open seats. And in June, it named Richard Glick, the Democratic general counsel on the Senate Energy and Natural Resources Committee and a former lobbyist for utilities PacifiCorp and Iberdrola, to replace Honorable after her planned departure at the expiry of her term last month.
Rob Rains at Washington Analysis noted this week that it’s still possible that the DOE report could initiate a docketed proceeding at FERC to study its conclusions, which could lead to enacting policies that could include protections for baseload power plants owned by companies like Dynegy, FirstEnergy and NRG Energy. “Even with low expectations, we are anxious to see how FERC proceeds once this report is issued,” he wrote in a note to clients.
ISO/RTO developments: PJM weighs in with Congress, spends big on transmission
As the country’s biggest regional transmission operator, PJM has a big stake in how changes in federal policy filter down to the way it does business. This week, VP of Government Policy Craig Glazer laid out PJM’s asks to Congress, telling a U.S. House energy subcommittee that it wants to work on “proactive rule changes that would ensure that the market accommodates state policies while remaining competitive.”
The mention of state policies is important in the current context, given that Perry has been quoted suggesting that the federal government may have the authority to pre-empt them in order to support its grid stability goals. At the same time, PJM wants FERC to reform its price formation rules “so as to better recognize the attributes that key generators (including baseload generation) bring to the grid,” he said.
Meanwhile, PJM’s workaday business of keeping its grid running continued this week, with the approval of $417 million in transmission improvements. It’s the latest installment in a regional expansion plan that since the year 2000 has grown to include $31.2 billion for building and reinforcing the transmission grid it needs to move baseload and renewable power to where it’s needed across its 12-state service territory.
The biggest new project is Public Service Electric & Gas’ $275 million plan to build a new substation to replace an aging interconnection serving hospitals, government and educational buildings, and train stations in Newark, N.J. Other utilities getting approval included American Electric Power, Dominion, PECO, East Kentucky Power Cooperative and Dayton Power & Light, with most projects coming in at less than $5 million.
Illinois sets new standard on open energy data
States are leading policy developments in much of today's grid edge landscape, including policies on energy data -- who owns it, who gets to share it with whom, and how to protect it. Last week, the state to watch was Colorado, with the Green Button Connect data access and standardization rules written into the $612 million smart meter and grid communications plan. This week, it's Illinois, where state regulators have finalized a new plan (PDF) for sharing data between utilities, customers and third parties -- the Open Data Access Framework.
This plan has been on the Illinois Commerce Commission's (ICC) docket since 2015, as part of the state law that allowed ComEd and Ameren to move ahead with their multimillion-device smart meter deployments, under the condition that they meet certain performance metrics or face financial penalties. Part of this agreement called for data-sharing between utilities and their customers, as well as the third-party retail energy providers (REPs) doing business in the state's deregulated energy market.
The framework, developed by the Environmental Defense Fund and the Citizens Utility Board, is more of a statement of principles and future goals than a hard-edged cybersecurity and data privacy technical implementation plan. Its basic principles include access to billing and usage data for a "reasonable fee" to any retail customer or their verifiable agent, and for REPs and local government agencies, access to "generic information concerning the usage, load shape curve or other general characteristics of customers by rate classification," as long as individuals' data is protected.
Utilities are also asked to "consider" the framework's rules on customer authorization, types of data, data format, method of delivery, timeliness, data security and charges for data access, as well as other facets of AMI implementation, as they develop new information technology systems, customer services and other programs stemming from the deployment, the order states. The “data roadmaps" developed by ComEd and Ameren represent a "sound and appropriate" start to that process, the ICC noted. Still, the order makes it clear that implementation is just beginning.
Building a more perfect TOU rate
Green energy groups have decried utility efforts to deal with the disruptions of net-metered rooftop PV by instituting fixed charges or residential demand charges. Now comes a new paper (PDF), from authors including former ICC commissioner John Colgan along with representatives of solar industry and consumer advocacy groups, enumerating the promise and perils of the third big alternative: time-of-use charges.
TOU rates can get people to use less energy during peak demand hours and use more during off-peak times, and encourage investment in solar, energy storage, and smart thermostats, appliances and electric-vehicle charging systems. But, if not planned properly, they can also put older and poorer people who can’t shift their energy use at financial risk, turn off the mass market with confusing and expensive changes, and undercut broader efficiency and green energy goals.
To avoid making a mess of TOU rates, the group suggests that utilities clearly identify goals in the domains of economic efficiency, DER deployment, peak load reduction, emissions reduction, and cost-benefit equity before starting their design, and that they seek out the “full range of alternatives,” including tiered rates, utility direct load control programs, peak time rebates, or more efficiency spending.
The paper also stresses the need to keep TOU rates simple for residential customers, and to bring them on-board slowly via methods like “shadow billing” for a year, or offering rebates for smart appliances like smart thermostats and water heaters to automate some of the largest loads. For commercial and industrial customers, adding inclining block rates to TOU rates, as has been done in several states including California and Washington, can create a more powerful price signal.
Microgrids for net carbon neutrality, not just net-zero energy
Net-zero energy buildings are a popular way for states to push builders and property owners to incorporate energy efficiency and solar power. But the value of using less energy than you generate over the course of a year doesn’t take into account other goals, like shifting energy use to balance grid-scale solar and wind power, or optimizing to reduce its carbon footprint.
So maybe net carbon neutrality is a better goal. Well, at least that’s the theory behind a project launched this week between Department of Energy’s National Renewable Energy Laboratory (NREL) in Boulder, Colo., and Peña Station NEXT, a net-zero energy project near Denver’s airport featuring utility Xcel and battery giant Panasonic.
Under the new project, NREL will apply two pieces of technology to the design of the 382-acre mixed-use development -- the grid modeling capabilities of its Energy Systems Integration Facility, and an under-development modeling tool called URBANopt, that applies to district energy systems as well as individual buildings.
The insights will be applied to the master plan, which includes corporate office space, retail space, multifamily residential, a hotel, a parking structure and street lighting, to ensure that Xcel can plan the right mix of solar, storage, efficiency and grid investments to support the push for carbon neutrality. Beyond managing the district’s interplay with the grid, both Xcel and Panasonic are interested in replicating carbon-neutral districts in other places.
$1B investment in storage, smart grid and efficiency so far in 2017
This week, Mercom Capital Group released its tally of venture capital investment across the energy storage, smart grid and energy efficiency companies it covers -- and so far, it’s looking like a good year.
On the battery storage front, the first half of 2017 saw $480 million raised in 18 deals, compared to $179 million raised in 20 deals in the first six months of 2016. But that big figure included one $400 million investment into Microvast Power Systems, a Chinese maker of lithium-ion batteries for buses and other EVs, from CITIC Securities, CDH Investment, National Venture Capital and other investors. The remaining investments were relatively small, with Vionx Energy receiving $12.75 million and Moixa Technology raising £2.5 million ($3.2 million).
Smart grid companies clocked in $304 million in 22 deals so far this year, compared to $331 million in 29 deals in the first half of 2016. The term "smart grid" is broadly defined, including industrial IOT networks from Actility, which raised $75 million from Orange Digital Ventures, Swisscom, Foxconn and others; EV charging from ChargePoint, which raised $43 million from Siemens; FreeWire Technologies, which received $7.6 million; and distributed energy management software from Enervalis, which secured 4.2 million euros ($4.8 million) from LRM, Nuhma and ABB.
Meanwhile, other companies we might classify as smart grid are plugged into Mercom’s efficiency category, including Tendril and its $5 million round, as well as a lot of smart lighting startups, like Cimcon Lighting with $15 million raised from Energy Impact Partners, and Illumitex, which raised $4 million from WP Global Partners and NEA. All told, the efficiency sector as defined raised $242 million in the first half of 2017, down from $297 million in the same period last year.
Mercom’s categorization of companies doesn’t quite align with how GTM Research measures the markets it covers, but here are some of its recent figures for comparison: GTM tracked more than $1 billion invested with distributed energy resource providers in 2016, and projected $380 million in cumulative "true DERMS" (or distributed energy resource management system) spending in North America by 2021.
California updates: Eclipse energy tips, and schools try solar-storage-diesel microgrids
A full solar eclipse will shave up to 6,000 megawatts of solar power from California's grid on the morning of August 21, and the state's utilities and grid operator are gearing up to make up for the shortfall. That's largely going to come from natural-gas-fired peaker plants. Still, the California Public Utilities Commission is asking residents to chip in by checking out CalEclipse.org, a website where they can take a pledge to take it easy on the electrical appliances and not turn on too many lights despite the darkness.
CPUC asks people to switch out half their household's lightbulbs to LEDs by the day of the eclipse, and take it easy on the air conditioning if it happens to also be a hot day. For the superstitious-minded, the CPUC suggests "slaying" household vampire loads by unplugging TVs, set-top boxes and other silent power hogs. Whether it will end up having a discernable effect is questionable, but the state has plenty of other options on the table.
Solar-plus-storage to cut costs and boost resiliency at schools
Schools are a natural gathering point in small communities facing emergencies, and diesel generators are the natural option for schools seeking the ability to keep the lights on when the power goes down. But solar PV and batteries could provide several hours' worth of backup power, if they’re sized right -- and able to make money during the vast majority of time the grid’s still up and running.
That’s the idea behind a pilot project involving Ideal Power and an unnamed Northern California school district announced this week. The order for 35 units of Ideal’s 30-kilowatt power conversion devices adds up to nearly a megawatt of AC-DC-AC flexibility, spread across six campus sites, to “lower high electricity costs caused by time-of-use and demand charges, while also reducing the impact of power disruption due to grid constraints," according to a press release.