California Considering Rebates for Energy Storage Systems

California has a good solar problem. It has an overabundance of solar power generation that could be better utilized with the implementation of energy storage technology. State Senator Scott Weiner (D) introduced Senate Bill 700 to create an energy storage incentive that would provide rebates to customers of utility companies who install energy storage systems.

“The challenge is to match our daytime supply of clean renewable power with the actual demand for electricity, which now peaks in the evening. Fortunately, California is poised to turn this challenge into opportunity by putting power into battery storage for use when it’s needed,” said Ben Airth, senior specialist of distributed energy resources at The Center for Sustainable Energy (CSE). CSE evaluated the benefits of combining residential rooftop solar systems with energy storage technologies and called for this type of policy to increase deployment of both energy storage and solar to reduce demand for electricity during peak hours.Residential Energy Use. Courtesy CSE

Storing solar generated energy during the day in battery systems for use during those peak demand hours would reduce demand for more expensive peaker plants to operate and reduce users’ time-of-use charges. The bill, which would require the California Public Utilities Commission (PUC) to create the incentive program, would support the job growth in the state’s solar industry, which has already grown to over 100,000 workers and ranks first in the nation, according to the Solar Energy Industries Association.

“With nearly instantaneous response time, battery storage can smoothly ramp up and regulate supply, displacing peaker plants while simultaneously decreasing intermittency. The potential social benefits are substantial, including cost savings, expanded consumer choice, a cleaner environment and robust clean-tech market and job growth,” said Airth.

Companies like Tesla and Surrun have marketed residential batteries along with solar arrays in Hawaii and California and customers are catching on to the benefits of the combination. Larger-scale solar and battery systems have provided significant savings for business and residents. For instance, a one-megawatt solar energy storage system was added to SOMO Village’s 3.1 megawatt installation in Rohnert Park, CA. The solar-plus-battery system is expected to save its 1,000 residents and 50 businesses $1.8 million over 10 years and $160,000 in the first year.

California Considering Rebates for Energy Storage Systems, by Charly Fasano, SolarReviews, April 20, 2017.

Energy Storage and Demand Response Propel California Forward on Earth Day

California may be at the vortex of Earth Day. Reducing greenhouse gas emissions is the state’s number one goal, which it’s working to achieve in a variety of ways, most notably by using more renewable energy. But to hit its green energy target, California will rely on new technologies like energy storage and demand response.

In an ideal world, energy storage devices would soak up electricity at night when the cost of power is cheaper and then release it during the day if the wind is not blowing or the sun is not shining. In the real world, the technology is used to keep the electrical grid balanced and to prevent changes in frequency that can cause the lights to flicker out and potentially prompt rolling blackouts. In other words, the batteries detect an imbalance and immediately respond.

California is trying to inspire investment in those tools that can inject electrons onto the grid: The California Public Utility Commission is requiring the utilities PG&E, San Diego Gas & Electric and Southern California Edison to collectively buy 1,325 megawatts of energy storage by 2020.

To that end, Sempra Energy’s San Diego Gas & Electric has just signed contracts for 83.5 megawatts from five storage projects that use lithium-ion batteries. If approved by the California Public Utilities Commission, the utility will own and operate two of the five facilities that will come online between 2019 and 2021. The utility is on target to procure 165 megawatts of energy storage by 2020.

“By building these projects, San Diego Gas & Electric will remain at the forefront of helping the state achieve its bold clean-energy and carbon-emission targets,” says Emily Shults, the company’s vice president for energy procurement.

Similarly, Edison International’s Southern California Edison has the Tehachapi Energy Storage Project. It is located on a wind farm about 100 miles north of Los Angeles — an undertaking that is part of the 2009 federal stimulus plan. The Tehachapi Energy Storage Project is projected to generate 8 megawatts for four full hours, which equates to 32 megawatt/hours. It also uses lithium-ion batteries, which are able to store and to discharge electricity at any time, although they have a limited duration.

California is looking to revamp its greenhouse gas emission goals and has proposed a 40% reduction from 1990 levels by 2030. It has several tools in its arsenal to try and achieve that objective, with the increased use of renewables being a key method; it now has a 50% green energy mandate by 2030.

“Our research shows considerable near-term potential for stationary energy storage,” McKinsey & Co. said in a report. “One reason for this is that costs are falling and could be $200 per kilowatt-hour in 2020, half today’s price, and $160 per kilowatt-hour or less in 2025.” Longer term and as the technology matures, it sees even greater business opportunities.

No doubt, energy storage could add tremendous value in electricity markets. Still, the cost of such technology has limited its deployment. If a project is going to add up to $1 billion, utility executives want to see proof that the investment can be recouped and how that cost will be shared.

Utilities are, by nature, conservative organizations that have long-term outlooks. When they build power generation, they are looking out at least 20 years. Energy storage is no different. To make it economically practical, the devices need to serve multiple functions such as injecting electrons to prevent outages or ultimately firming up intermittent renewable power.

Energy storage is vital to the success of renewable generation. But so too is demand response. That’s why San Diego Gas & Electric has also just signed a contract to add a 4.5 megawatt demand response program that prompts consumers to shift their energy consumption when electricity prices skyrocket. That is preventing congestion and possibly brownouts during peak usage while also making room for more green electrons. 

It’s especially valuable if states increase their renewable energy requirements. California’s 50% goal by 2030 is one such challenge. That’s why experts emphasize that it is important to make investments in a modern grid. Such improvements would give utilities the opportunity to communicate with their customers so that they adjust their energy usage.

“Through smart communications and quick communications and control, the other generators on the system are adjusting accordingly” to compensate for the variability of renewable power, says Ron Litzinger, president of the Irvine, Calif.-based Edison Energy Group.

California has set the national pace when it comes to emissions reductions and renewable energy additions by advancing energy storage and demand response technologies. And while the state’s utilities are asking the hard questions and getting some federal assistance, they are helping to facilitate the movement — something that deserves notice on Earth Day 2017.

Energy Storage and Demand Response Propel California Forward on Earth Day, by Ken Silverstein, Forbes, April 21, 2017.

CPUC and California Energy Commission to Hold En Banc on Customer Choice in Electricity in California

* UPDATE * 

This event is FULL!

Use this link to attend the Webinar: https://video.calepa.ca.gov/

 

SACRAMENTO, April 11, 2017 – The California Public Utilities Commission (CPUC) and the California Energy Commission will hold a joint En Banc Hearing with Commissioners of both agencies attending to discuss the changing state of retail electric choice in California, as follows:

WHEN: Friday, May 19, 2017, 8:45 a.m. – 5 p.m.

WHERE: Byron Sher Auditorium, CalEPA Building, 1001 I St., Sacramento

REGISTRATION: Attendance may be limited to 250 people. There is expected to be high interest in this event. The only way to guarantee a seat is through pre-registration, however, pre- registration is not required to attend and an overflow room will be available. Visit www.cpuc.ca.gov/retailchoiceenbanc to RSVP.

WHY: By the end of 2017, 30-40 percent of California’s investor-owned electric utility customers will be receiving some type of electricity service from an alternative source and/or provider, such as Community Choice Aggregators, rooftop solar, or Direct Access providers. Projections suggest that this number will grow to well past 80 percent by the middle of the next decade.

The goal of this joint agency En Banc is to identify and begin to develop an understanding of the challenges and opportunities that the CPUC and the California Energy Commission must examine as a result of these fast approaching changes in order to ensure that affordable, reliable and low-carbon electricity will be available to all California consumers. Part of this overview will look at the role of the investor-owned utilities in a future in which customer-oriented technologies disrupt the traditional top-down electricity service model.

Unlike electricity restructuring efforts of the past, when policymakers made a set of conscious decisions to move to open market competition, this transition is being driven by a range of economic and technological trends. Rapidly declining prices for solar PV, wind, and battery technologies are up-ending the nature of electricity service. The implications of this migration away from “bundled” utility service were not fully contemplated when the current regulatory rules were developed. These changes present tremendous opportunities to achieve the deep de- carbonization pathway that California has set for itself, but they also create unforeseen risks.

In an effort to clearly communicate the goals of this En Banc and describe a set of potential next steps, the CPUC will be issuing a White Paper that describes how California got to where we are today, articulates key lessons learned from past efforts to restructure retail electricity markets, and proposes a set of principles to consider as changes to both the regulatory and statutory frameworks surrounding retail electricity service are contemplated.

Although a quorum of Commissioners and/or their staff may be in attendance, no official CPUC or California Energy Commission action will be taken at this event.

For more information on the CPUC, please visit www.cpuc.ca.gov.
For more information on the California Energy Commission, please visit www.energy.ca.gov.

###

AGENDA (preliminary)

  • Introductory Remarks from President Michael Picker, Chair Robert B. Weisenmiller and Invited Legislators
  • Staff Presentation on Retail Choice White Paper
  • State of Customer Choice in California: Overview and discussion of current state of customer choice in California featuring representatives from Community Choice Aggregators, rooftop solar, Direct Access, and Community Solar
  • Panel Discussion: IOU Perspective on Current State of Retail Electricity Market and Coming Changes

This panel is an opportunity for California’s three largest investor-owned utilities to discuss current challenges and lay out their vision for the evolution of retail electricity choice and their role in its provision

  • Panel Discussion: What Customers Want Overview and discussion of priorities and requirements of major customer

categories, including the types of retail electricity choices they want, key consumer protection concerns, and general view on the structure of California’s retail electricity market

  • Thought Leaders and the Future of Retail Electricity Service: This section will be an opportunity for national electricity market experts to share their perspectives on a) lessons learned from other markets where retail choice exists, b) their view on the role that technology will play in transforming retail electricity service, and c) their thoughts on how California can restructure both its regulatory framework and market structure to at once achieve its public policy goals (affordability, reliability, and low carbon) and account for technological innovation
  • Impressions and Reflections from CPUC, California Energy Commission and Legislature

CPUC and California Energy Commission to Hold En Banc on Customer Choice in Electricity in CaliforniaCalifornia Public Utilities Commission, April 11, 2017.

CARB Green-Lights Clean Air Efforts with Next-Gen Vehicles, Fuels

The California Air Resources Board (CARB) has formally approved two climate and air quality efforts, including a suite of actions to deploy the next generation of clean vehicles, equipment and fuels.

In the first action, CARB approved the State Strategy for the State Implementation Plan (State SIP Strategy), which describes the board’s commitment for further reducing vehicle emissions needed to meet federal air quality standards over the next 15 years. In addition, the board also approved the South Coast Air Quality Management District’s comprehensive air quality plan.

As reported, CARB directed staff to report annually on progress on implementation of the SIP Strategy, including recommendations on additional funding, as well as direction to expedite implementation where possible.

“Today’s action builds upon California’s efforts over the last 50 years and sets the stage for a range of actions into the next decade,” says CARB Chair Mary D. Nichols. “We look forward to continuing California’s air quality leadership, working with our federal and local partners to provide the pathway to cleaner air, along with a vibrant economy.”

According to CARB, the State SIP Strategy maps out a comprehensive suite of actions to deploy the next generation of clean vehicles, equipment and fuels, including a portfolio of new engine standards for cars and trucks and the durability and inspection requirements to ensure these vehicles remain clean over their lifetime. The strategy also includes enhanced deployment of zero-emission technologies, cleaner-burning fuels, and innovative pilot and incentive programs to accelerate the deployment of this cleaner technology.

In parallel to actions at the state level, CARB will continue to call for strong federal action to develop more stringent engine standards for cars, trucks, ships, aircraft and locomotives.

These advanced technologies will help transform and clean up California’s transportation system, providing important public health benefits, especially in the South Coast and the San Joaquin Valley, the two regions of the state with the greatest air quality challenges. The cleaner technologies will also deliver significant reductions in greenhouse-gas and toxic diesel particulate matter emissions that are essential to meeting California’s climate, air quality and risk reduction goals.

The South Coast’s Air Quality Management Plan (AQMP) is a comprehensive road map for meeting ozone and fine particulate matter standards in both the South Coast region and the Coachella Valley. In conjunction with state actions to reduce mobile source emissions, the South Coast AQMP includes a broad spectrum of measures to transition residential and commercial homes and buildings to cleaner energy sources, from electrification and fuel cells to solar power.

Further, the district’s plan also contains important actions to achieve further reductions of pollutants from large industrial facilities, such as refineries and power plants. Attaining federal air quality standards will provide significant public health protection for the 17 million residents who live in the region, estimated by the district to total $173 billion in cumulative health benefits between today and 2031.

CARB Green-Lights Clean Air Efforts with Next-Gen Vehicles, Fuels, by Lauren Tyler, Next-Gen Transportation, March 24, 2017.

California’s Jammed Highways Hold Hope as Power Source

California’s famously congested freeways may soon do more than create headaches.

State officials agreed last week to fund an initiative to generate electrical power from traffic, a plan that involves harnessing road vibrations with the intent of turning the automobile, like the sun and wind, into a viable source of renewable energy.

The technology is peculiar but proven. Devices that convert mechanical force into electricity are used in watches and lighters and are being tested for power generation on sidewalks and runways. A San Francisco nightclub has even leveraged the pulses of a dance floor to power its lights and music.

But it remains to be seen whether the science can be employed on a large scale — threaded beneath the state’s sprawling highway system and rigged to produce significant, cost-effective electricity.

‘’There’s a lot of traffic in California and a lot of vibration that just goes into the atmosphere as heat. We can capture that,’’ said Mike Gravely, a senior electrical engineer and head of the research division at the California Energy Commission. ‘’The technology has been successfully demonstrated.’’

Gravely helped draft the proposal approved Wednesday by the Energy Commission’s governing board, which will direct $2.3 million to two independent road projects designed to test the viability of scaling up piezoelectricity.

‘’Piezo’’ is Greek for ‘’squeeze’’ or ‘’press’’ and refers to using pressure to create power.

Both of the state’s pilot programs are expected, within two to three years, to be far enough along to give California officials an idea whether the effort should be expanded. By developing new technologies like piezoelectricity, the Energy Commission is looking to help meet the Legislature’s target of producing 50 percent of the state’s power from renewable sources by 2030.

‘’The ultimate goal for us is to move this to a commercially viable product,’’ Gravely said. ‘’As you drive down the road to San Francisco, you’d see them on the side of the road. Just think about the Golden Gate Bridge and downtown traffic on Highway 101.’’

The first demonstration is scheduled for the eastern edge of the University of California at Merced campus. Jian-Qiao Sun, a professor at the university’s engineering school who was awarded $1.3 million from the state, is designing a 200-foot stretch of asphalt that will be sowed with tiny piezoelectric generators.

The inch-wide devices will be stacked ‘’like quarters’’ within numerous arrays beneath the pavement, where each will convert the force of passing cars into a small electrical charge. Taken together, Sun said, significant energy will be produced.

‘’You can imagine there will be two tracks of these things on the road, and the distance between them will be the length of a typical vehicle axis,’’ he said. ‘’Eventually, we can put thousands of them on the road, in busy sections.’’

The resulting electricity could be used to power nearby lights and signs, stored in batteries or sent to the grid, Sun said. The more traffic there is, and the heavier the vehicles are, the more power can be created. Some state estimates suggest that just 400 cars an hour would need to pass over the arrays to make them economically viable.

Such configurations have been tested in other parts of the world. However, there’s little consensus on how effective these efforts have been.

Perhaps the most publicized demonstration took place on an Israeli highway several years ago, when a startup company claimed success generating 150 kilowatts of electricity over a half-mile stretch of road, enough to power about 50 or so homes. The firm has since suspended its testing, though, and subsequent initiatives have showed varying results.

The California Energy Commission’s second piezoelectric project, which will be undertaken by the company Pyro-E in San Jose, is expected to build upon recent demonstrations with a design that would power up to 5,000 homes from a half-mile of highway.

The $1 million program will be similar to the UC Merced plan, embedding arrays for power generation in a test section of roadway. The company also intends to explore whether the technology could be used for data collection, recording traffic conditions and aiding navigation for self-driving cars.

‘’There’s a lot of options that we can do with these things beyond energy conversion,’’ said Kevin Lu, Pyro-E’s founder and president.

But not everyone is on board with plans to use California’s roads for more than driving. State legislation proposed six years ago that would have introduced similar highway power projects failed amid concern that the technology wouldn’t produce enough energy — and might damage critical freeways.

John Harvey, a professor of civil and environmental engineering at UC Davis who runs UC’s Pavement Research Center, said roads aren’t meant to vibrate. Encouraging them to do so, he said, requires cars to exert more energy, which may be negligible for any single vehicle but would cumulatively increase fuel consumption, and could compromise the integrity of the thoroughfare.

Having to cut into the street to install devices, he said, would also create problems.

‘’It just doesn’t pencil out,’’ Harvey said. ‘’The state just passed a $5 billion (per year) tax measure to fix roads, and one of the main things we want to do with pavement to keep it lasting longer and costing less is not put stuff in it that is potentially going to shorten its life.’’

The new test projects will evaluate any potential harm done to the roads, while studying whether the technology can compete economically with solar and wind power.

Mike Gatto, the former Southern California assemblyman who wrote the 2011 piezoelectric bill, said he thinks the demonstrations will show promise. Since he proposed the legislation, he noted, the science has progressed.

‘’Whenever you’re talking about a new technology, there’s always a bit of skepticism,’’ he said. ‘’When the hippies said you could put silicone in the desert and get a charge from the sun, people were like, ‘Right, man.’ Now there’s solar power everywhere.’’

California’s Jammed Highways Hold Hope as Power Source, by Kurtis Alexander, San Francisco Chronicle, April 16, 2017.

Will California’s New Subsidy Accelerate Energy Storage, Just as the CSI Drove Solar?

There’s a new and bigger renewables subsidy now in effect in California, unanimously approved last week by the Public Utilities Commission, that has the potential to light up the energy storage market.

The Self-Generation Incentive Program (SGIP) has been boosting distributed energy in California for years. It was the chief subsidy for solar prior to the enormously effective California Solar Incentive (CSI). But the generous (approximately $80 million per year) SGIP has not always been perfectly aligned with its goal of deploying low-carbon distributed energy sources that support grid needs in an equitable fashion.

The monies for the subsidy come from ratepayers and are collected by California’s large investor-owned utilities.

GTM has reported on the program’s flaws, as well as allegations of some participants gaming the system — the program’s bid submission process had allowed one or two vendors to dominate recent bidding rounds. The relative “greenness” of some of the subsidized technologies has also been debated. The program has been the mainstay of more than a few storage and fuel cell firms, but was put on pause as the CPUC grappled with the changes that needed to be made.

In May of last year, California Public Utilities Commission President Michael Picker issued a proposed decision (PDF) that would make these reforms:

At the time, law firm Wilson Sonsini Goodrich & Rosati noted: “Although a prior CPUC staff proposal had recommended ending the allocation of incentives to natural-gas-fired electric-only fuel cells and microturbines, the proposed decision would allow these technologies to remain in the SGIP. Of the 25 percent of the total SGIP budget set aside for generation projects, 10 percent is reserved for renewables, however, and gas-fired technologies must be at least 10 percent bio-gas-fueled beginning in 2017, increasing to 100 percent by 2020.”

Ravi Manghani, GTM Research’s director of energy storage, noted at the time that the program’s proposed changes make it “look a lot like the California Solar Initiative in design.” He added that there is a “15 percent carve-out for small systems less than 10 kilowatts in size.”

He also pointed out the proposed increase in discharge requirement for commercial storage from 104 hours per year to 260 hours per year, and an increase in the application fee from 1 percent to 5 percent.

Doubling the funds available to $166 million per year

Last month, these additional changes were proposed in AB 1637:

  • PG&E, SCE, SDG&E and Southern California Gas will collect “on an annual basis through 2019, double the amount collected in calendar year 2008.” That’s $166 million per year.
  • 85 percent of the additional funding authorized by AB 1637 will be allocated to the energy storage category — but no AB 1637 funds are allocated to the existing carve-out for energy storage projects less than 10 kilowatts in size. The joint investor-owned utilities, Silicon Valley Leadership Group, CalSEIA, SolarCity/Tesla, and Sunrun supported a 75 percent energy storage/25 percent generation split, according to the proposed decision.
  • 15 percent of the AB 1637 funds are available for renewable generation projects.

“SGIP has been a successful program that played a critical role in the deployment and commercialization of both solar and fuel cell technologies, and now the commission has focused the program almost exclusively on accelerating the commercialization of storage technologies,” observed Bloom Energy VP of marketing and customer experience Asim Hussain.

Walker Wright, VP of public policy at Green Charge Networks, said the changes “essentially made the SGIP program more of an energy storage program and less of a fuel cell program.” Wright added, “This is a big deal for a small, emerging industry.”

A bit of tension

Comments from stakeholders offered a wide range of choices on how to distribute the new funds across the incentive steps and available technologies. Opinions differed on the best way to prioritize bids once funds from different steps were exhausted.

To some extent, it pitted the standalone energy storage firms such as Stem and AMSagainst independent solar installers. Now, if a program step is oversubscribed, a project enters a lottery system that includes preferences related to location (such as Southern California Edison’s West L.A. Local Reliability Area), as well as giving storage-plus-solar priority over storage-only projects.

Polly Shaw, VP of regulatory affairs and communications for standalone energy storage firm Stem, told GTM, “After seeing unexpectedly large solar developer interest in the recent SGIP workshop, a group of standalone storage companies proposed some additional ‘good governance’ ideas to the CPUC on just the additional AB 1637 SGIP monies to ensure the incentives fund ready projects.”

Shaw added, “We think the commission should think again about introducing a new program priority, equal to solar-storage and Aliso Canyon siting, but only starting in Step 2 if it sees unduly high solar demand. We think it’s in the ratepayers’ and customers’ interest to prioritize incentives for projects that offer multiple grid and customer benefits to get the most ‘bang for the buck.’”

The standalone energy storage suppliers suggest that systems offering grid benefits should receive priority.

Energy storage software provider Geli’s director of marketing and strategy, Andrew Krulewitz, contends that solar-plus-storage “does benefit the grid.”

“Solar is going to keep coming on to the grid, resulting in more and more negative price events. Pairing solar with batteries (coupled with the ITC forcing batteries to charge off of the solar) makes solar inherently more dispatchable, a win for the grid, and a win for solar installers,” said Krulewitz.

$0.50/Wh

Geli provides a guide to the SGIP and some C&I energy storage baseline incentive amounts.

Generate Capital issued a note on the program. “With the falling costs of battery storage and additional incentive from the federal tax credit, solar-plus-storage is finally ready to become a standard offer presented to commercial and industrial customers.”

But Generate also pointed out that “there will be five declining incentive blocks. Further, solar-plus-storage projects are given a preference in the program to encourage low-carbon generation. What is that incentive level? You might want to be sitting down for this: Commercial storage deals will be offered 50 cents per watt-hour (36 cents for solar-plus-storage because of the existing benefit of the ITC). Let’s make something clear: This isn’t a kilowatt-hour (which is 1,000 watts); it’s single watt-hour.”

That generous incentive is why Generate is putting $250 million to work in storage applications.

“The SGIP will make solar-plus-storage more cost-effective than solar-only for many customers. As with most commercial systems, the savings are real, but not the real reason to go solar. Most customers make the switch to protect themselves from ever-rising electricity rates. Other customers value backup power and resiliency — these customers will love solar-plus-storage. As the utility companies shift rate increases from electricity prices to demand charges, commercial customers that opt for solar-plus-storage will be protected. If you live in California, the SGIP will pay you for something you already want,” claim documents from Generate Capital.

According to Jigar Shah, president of Generate, California is putting up a “big tranche of cash.”

His firm contends,”There has never been a better time for solar developers or customers to add energy storage to their systems.” Generate sees California “giving battery storage another shot in the arm.”

But as Polly Shaw of Stem noted, “Incentive programs are hard to design.”

“The decision was laudable in that it set aside the new monies largely for storage and moved the funds up to earlier steps. Adding the funds equally to Step 1 would have been most optimal for ensuring access for a wider range of project types,” said Shaw.

Additionally, energy storage can benefit the grid but not always on the the side of reduced GHG emissions. The commission has little evidence to show that GHG reductions have been achieved by current storage projects from these ratepayer-funded incentives. As GTM VP Shayle Kann has pointed out, sometimes energy storage performs in counterintuitive ways.

The SGIP will reopen to energy storage applicants on May 1.

Join GTM for a deep dive into the budding domestic energy storage market at the U.S. Energy Storage Summit 2017. Utilities, financiers, regulators, technology innovators, and storage practitioners will all come together for two full days of data-intensive presentations, analyst-led panel sessions with industry leaders, and extensive, high-level networking. Learn more here.

Will California’s New Subsidy Accelerate Energy Storage, Just as the CSI Drove Solar?, by Eric Wesoff, GreenTech Media, April 13, 2017.

NRG Energy Has a Secretive Distributed Energy Optimization Platform, Called SpaceTag

What’s the best combination of distributed resources for every building in Southern California Edison’s 5.2 million customer service territory — and what’s it worth to each customer?

NRG Energy says its new SpaceTag platform can provide the answer to these questions across a changing portfolio of properties and technologies, down to the individual building address. Now it’s putting the secretive data analytics engine to its first test — gathering 60 megawatts of flexible clean energy capacity for key parts of SCE’s Orange County and Los Angeles power grid.

On Thursday, NRG officially began seeking out commercial and industrial customers interested in taking part in this massive behind-the-meter grid flexibility procurement. The Princeton, N.J.-based energy giant is one of many companies, including Stem, Advanced Microgrid Solutions, SunPower, and AES Energy Storage, that won bids to provide capacity as part of SCE’s 2014 distributed energy procurement, with delivery set for the end of the decade.

NRG had already laid out its three main technology offerings to meet its SCE commitments, making Thursday’s list unsurprising. First, it’s working with startup Ice Energy to install up to 25 megawatts of its ice-making, load-shifting air conditioning systems. Second, it’s teaming up with Lockheed Martin Energy to achieve up to 30 megawatts of peak load reduction through commercial HVAC, industrial refrigeration, process cooling, compressors and lighting. Third, it’s launching a demand response program aimed at 5 megawatts of commercial and industrial load.

It’s the first time NRG has publicly mentioned SpaceTag or its self-described awesome powers. “Using technology built in-house, the platform determines the compatibility of different buildings across a target region for distributed energy products by harvesting, synthesizing and analyzing data for business locations,” the company states, to “automatically identify the best solutions for each customer, making the potential customer identification and acquisition process more accurate and efficient.”

NRG has kept its new analytics platform pretty hush-hush. A Google search for SpaceTag yields a few unrelated apps, Thursday’s announcement, and a trademark filing. So what’s behind this in-house data aggregation and analytics engine, and how is NRG going to be using it from now on?

We talked to Kevin Berkemeyer, NRG’s VP of innovation implementation and head of its Station A research team in San Francisco, which developed the software, to learn more. “We originally developed it to help with customer acquisition, via definition of the best resource solution for customers across the SCE territory,” he said in a Thursday interview. “It’s evolved significantly since then,” and in fact has become Station A’s main work since he took over leadership of the group about a year and a half ago.

NRG’s role as a leading generation company, one of the country’s biggest energy retailers, and a big investor in wind and solar, has given SpaceTag a lot of proprietary internal data to work with, he said. “We have significant user data from our retail operations, from our demand response operations, and from our distributed solar operations. We’re able to take data that’s publicly available, and also leverage a lot of the data we currently have (that’s proprietary) to determine optimal solutions.”

This helps differentiate NRG from the plethora of big-data analytics firms working on similar solutions to the distributed energy challenge. SpaceTag uses data about the physical attributes of the building, how it’s used, and its existing energy data, to create a profile of its energy performance — an approach also used by startups such as Tendril, FirstFuel and Ecova’s Retroficiency.

It also assesses its location in relation to the power grid, from the distribution feeder level all the way up to the grid operator level — a task being taken on by companies such as Integral Analytics, Smarter Grid Solutions and Opus One Solutions. SpaceTag was really built to help NRG with the execution of the SCE resource program, which means it has to take the utility’s regional and distribution circuit-level capacity needs into account, said Berkemeyer.

Finally, SpaceTag uses data on the distributed energy equipment itself — its capital cost, the associated costs of providing generation and demand-reduction attributes over time, and the optimal mix of each technology choice on the building and portfolio level. Once deployed, the same data analytics platform can help it “monitor the technical operations, and ultimately, the financial performance,” he said.

This, of course, falls into the broad description of a distributed energy resource management system, or DERMS, which features competition from startups such as Enbala, Blue Pillar and Ormat’s Viridity Energy, as well as more utility-focused products from grid giants such as Siemens, General Electric and ABB.

But NRG is already realizing value from how SpaceTag has transformed its customer acquisition process. “In the past, what we’ve done is manually combed territories for different types of customers, reached out to those customers, set up meetings, pitched the customers on what NRG can bring,” said Berkemeyer. Only then has the company gotten into collecting data to determine a customer’s more detailed distributed energy potential.

With SpaceTag, “We kind of reverse that process,” he said. “We’re taking a more proactive approach, from the bottom up — assessing an entire region and all the locations in the region, and calculating the loads, and assessing the physical characteristics, and assessing the market values, the performance of different resources for those buildings.” It also assesses the financials of any NRG customer.

“We’re now walking into big stores, and in the first meeting, telling them, ‘We’ve already assessed all the locations in all the areas you own and operate, and we think you should deploy this many Ice Bears, this many energy-efficiency packages, this much demand response. […] It’s a totally different approach.”

“We can also go to a utility and say the exact same thing — “We’ve assessed your territory, and we think the most efficient deployment of capital, for customers and for you, is to deploy X megawatts of demand response and Y megawatts of batteries,” said Berkemeyer.

NRG has already mapped 24 different utility territories outside of SCE, “and we’re expanding that on a regular basis, and starting to engage more with utilities, to share more specifically how distributed energy resources could be most efficiently deployed,” he explained.

NRG Energy Has a Secretive Distributed Energy Optimization Platform, Called SpaceTag, by Jeff St. John, GreenTech Media, April 14, 2017.

California to Reconsider Retail Choice

More than two decades after initiating a deregulation drive that faltered in the wake of the Western Energy Crisis of 2000/01, California officials are taking another look at offering consumers the ability to choose their electric supplier.

This go-round should be different, according to the state agencies heading up a new exploration of “the changing state of retail choice” in California, because of changes already in motion.

“Unlike electricity restructuring efforts of the past, when policymakers made a set of conscious decisions to move to open market competition, this transition is being driven by a range of economic and technological trends,” the California Public Utilities Commission and California Energy Commission said in a joint statement April 11.

To kick off the effort, the two agencies will hold a May 19 joint en banc public hearing to identify the “challenges and opportunities” stemming from “fast-approaching” changes overtaking the industry. The goal is “to ensure that reliable and low-carbon electricity will be available to all California consumers,” the agencies said.

Key among the factors now influencing the sector: the rapidly falling costs for renewable and energy storage technologies, which the CPUC and CEC say are “upending the nature of electricity service.”

The agencies estimate that by the end of this year, up to 40% of the state’s investor-owned utility customers will be receiving “some type” of electricity service from an alternative source, such as rooftop solar, community choice aggregators (CCAs) and direct access providers.

California officials are reconsidering the idea of “consumer choice” for retail electricity customers who continue to pay some of the highest rates in the country. Efforts would focus on giving more residents affordable access to renewable resources that help the state meet its environmental mandates. | U.S. Energy Information Administration, Form EIA-861, “Annual Electric Power Industry Report.”

California today boasts nearly 5,200 MW of installed rooftop solar capacity, according to California Distributed Generation Statistics, a website sponsored by the CPUC and the state’s IOUs. The state also has six CCAs, with more slated to begin operation within the next few years, a development that is expected to increasingly siphon off the customer base from the traditional IOUs.

“The implications of this migration away from ‘bundled’ utility service were not fully contemplated when the current regulatory rules were developed,” the agencies said.

The changes provide “tremendous opportunities” for California to meet its carbon reduction goals, but they will also create “unforeseen risks,” the agencies said.

The May 19 hearing will offer a closer examination of those opportunities and risks. A preliminary agenda indicates the event will start with a presentation on a still-pending CPUC white paper on retail choice, followed by an overview of the current state of retail choice in California and panel discussions focused on the perspectives of both the IOUs and electricity customers.

The agencies will also invite national electricity market experts to share their perspectives on retail choice in other regions, the role of technology in transforming electricity service and how California can restructure its regulatory framework and markets to help achieve its public policy goals.

California last set a course for deregulation in 1996 with the enactment of Assembly Bill 1890. Under the law, regulators first set out to restructure the state’s wholesale market while leaving retail price controls intact. The ensuing crisis — which resulted in the 2001 bankruptcy of wholesale market operator California Power Exchange — precluded the implementation of any retail market measure. Wholesale operations now reside with CAISO, which in 2009 rolled out a nearly statewide energy market designed to prevent the kind of manipulation that crippled the exchange.

California to Reconsider Retail Choice, by Robert Mullin, RTO Insider, April 12, 2017.

The Case for California to Engage in Grid Markets across the West

California could expand its grid markets to other states across the Western United States, and find a home for gigawatts’ worth of solar and wind power that might otherwise be lost to curtailment. But it’s a tough political, economic and environmental balance to merge its green power goals with the brown power coming from states like Wyoming and Utah.

Even so, a coalition of environmentalists, Silicon Valley investors and green power companies is demanding that the California legislature take up the cause this year. In a Tuesday press conference, the group pointed to the news of possible multi-gigawatt solar curtailments this spring — and the Trump administration’s attack on federal climate regulation — as a spur to action.

“We’re seeing what I call a flashing light warning, with these increased curtailments,” Ralph Cavanagh, co-director of energy policy for the Natural Resources Defense Council, said in a Tuesday press conference. State grid operator CAISO said last month that it could need to curtail up to 8 gigawatts at a time of unneeded solar power onto the transmission system this spring, driven by “duck curve” imbalances between high solar generation and low energy demand.

Creating a regional grid market structure could let those excess gigawatts serve the needs of utilities hundreds or thousands of miles away, and create more than $1 billion annually by 2030 in lower energy costs for California, he said — largely by finding an outlet for renewable energy that might otherwise be lost.

Tuesday’s press event marks the start of an advocacy effort to get California lawmakers to pass a law giving CAISO the authority to create an independent board, open to any Western utilities within the 38 separate “balancing authorities” west of the Rockies, Cavanagh said.

An independent board has been a key sticking point in negotiations between California and would-be partners, such as Rocky Mountain state utility PacifiCorp. The five-state utility, owned by Warren Buffett’s Berkshire Hathaway, has said it won’t go forward with a shared balancing authority unless it’s led by a board with a governance structure independent of CAISO, and authorized to serve as a regional organization.

Today, these largely utility-run pockets of generation and transmission exchange energy through bilateral agreements — a far less efficient way of aligning grid needs than the interstate transmission grid markets run by ISOs and RTOs in the Midwest and Eastern U.S. A CAISO report found that implementing a regional energy market with PacifiCorp alone could reduce power-related carbon emissions by about 12 million tons by 2030, and save California ratepayers up to $894 million, with some $691 million of that attributable to regional renewable procurement savings.

There’s certainly value to utilities in joining a regional grid that offers the opportunity to buy and sell energy based on day-ahead markets. At the same time, Cavanagh said, “It’s important to state that all Western states and California will retain their policy-making power. We’re not singling out anyone or excluding anyone. The more, the merrier.”

The idea of giving coal-heavy utilities like PacifiCorp a say in how a regional Western grid develops is worrisome to some. The Sierra Club has opposed the current plan on the grounds that it could allow coal-fired power plants to sell power and remain operational longer, adding to overall carbon emissions.

This confluence of conflicts led to California Gov. Jerry Brown postponing the interstate grid effort during last year’s legislative session. In recent months, Rocky Mountain states have been balking at the idea of giving California more control over their energy policies, the Salt Lake Tribune reported in January.

But NRDC’s Cavanagh argued Tuesday that the benefits of opening markets to cheap and plentiful renewable energy outweigh the potential for extending the life of coal power plants. It’s also an important way to help California achieve its renewable portfolio standard, which calls for 50 percent renewables by 2030, he said.

“We do have to have a broader market to expand here in California, and if we don’t have a broader market, it’s going to be very difficult to move it forward,” said Jan Smutny-Jones, CEO of the Independent Energy Producers Association, a trade association for power project developers representing about one-third of the state’s installed generation capacity.

A slow march from energy imbalance markets to regional balancing authority

CAISO is already operating some interstate energy markets. Since 2014, its Energy Imbalance Market, or EIM, has linked the state’s grid with a growing list of transmission utilities, starting with PacifiCorp and its grid covering much of Utah, Wyoming, southern Idaho and the California-Oregon border region, and expanding to Nevada utility NV Energy, Arizona Public Service, and Seattle City Light and Puget Sound Energy in Washington state. Portland General Electric and Idaho Power are slated to join in the next 12 months, and others are in discussions, CAISO spokesperson Steven Greenlee said in an interview last week.

But the EIM has its limits. Specifically, it allows participants to trade energy in 5-minute increments, to fill in for the “final few megawatts of power to satisfy demand within the hour it’s needed,” according to CAISO’s EIM website. That’s a relatively thin slice of the total energy balancing demands faced by the Western grid, and it requires a higher level of sophistication from the generators of demand-side resources that would bid into it.

Even so, EIM has helped California solar find a home, according to CAISO data that shows a spike in “avoided curtailments,” or power transfers at times when California has an excess of supply.

Day-ahead markets offer a far simpler way to schedule and forecast energy supply and demand, opening the field to a far broader set of participants. That’s important to the companies represented by Tim McRae, vice president of energy at the Silicon Valley Leadership Group, a public policy trade association with a membership roster representing one of every three private-sector jobs in the high-tech hotbed. “An integrated Western grid allows California to reach a broader market” and will “allow our wind and solar plants to operate at full capacity,” he said.

It’s unclear how the Trump administration’s efforts to dismantle federal clean energy programs and policies might affect the regionalization push. CAISO is regulated by the Federal Energy Regulatory Commission, which has oversight over any plans to expand into a regional entity. Right now, FERC has only two commissioners seated, and while two of the three replacements must be Democrats according to FERC rules, there’s still the potential for new appointments who might challenge the concept.

“That risk is there now, and it’s reinforced by the fact that the California Independent System Operator has the label ‘California’ on its back,” Cavanagh said. That’s an argument for regionalization, he added, since having more states and more utilities on board will help cushion CAISO from any interference based on hostility to the state’s green energy and carbon reduction efforts.

IEPA’s Smutny-Jones sees less threat of federal action derailing the regionalization process. “Opponents of expansion are raising this issue, but in terms of holding it back, there isn’t any expansion of vulnerability to California seeking to expand its grid,” he said. “Other regional groups such as PJM on the East Coast and the Midcontinent ISO have states that have renewable energy portfolios and states that do not.”

The Case for California to Engage in Grid Markets across the West, by Jeff St. John, GreenTech Media, March 30, 2017.

How California Lawmakers Plan to Align Renewable Generation with Power Demand

An innovative Arizona concept to align renewable energy output with electricity demand could hit the bigtime in California.

Proposed legislation from key California lawmakers would require an increasing proportion of peak demand electricity to be served by renewable resources like wind and solar.

If enacted, backers say the bills would drive growth for renewables, battery storage and demand management, as well as help the state reduce the need for fossil fuel peaker plants.

“Addressing peak demand is really a way to ensure that clean energy resources are used in a way that makes the renewable and GHG standards achievable,” said California Assembly Speaker Pro Tem Kevin Mullin, who authored the the bill introduced in his chamber (AB 1405).

The bill and its Senate companion (SB 338) echo Arizona’s Clean Peak Standard (CPS), a proposal introduced last year by the state consumer advocate that would amend the state’s renewable portfolio standard to require utilities to obtain a specific portion of their peak demand generation from “clean peak resources.”

“In Arizona, the CPS would address costs related to peak demand growth,” said Lon Huber, senior director at energy consultancy Strategen and author of the Arizona proposal. “In California, it will use renewable over-generation to mitigate the costs and emissions of flexibility and reliability services from fossil fuel generation.”

Early reaction to the CPS concept from sector stakeholders, particularly renewable and distributed energy providers, has been largely positive, backers say. But California policymakers are still debating how to proceed, with the two bills proposing markedly different approaches to implementation.

Read more by clicking the link below:

How California Lawmakers Plan to Align Renewable Generation with Power Demand, by Herman K Trabish, UtilityDive, March 30, 2017.