TECH LEAPFROGGING IN THE POWER BIZ?

Written By: Stratton Report
January 20, 2017

Stratton Report’s Grid 2.0 Launch Explores Disruptive Megatrend of D.E.R.’s — PV, Storage, Demand Response & Microgrids

Click here to see video content from Event

California is aggressively moving to de-carbonize its economy. Hundreds of megawatts in 2017 and 2018 will be opened up to third party aggregators. A recent FERC Notice of Proposed Rule-making proposes giving such parties access to wholesale markets. Navigant estimates $120 billion will be spent globally between 2015 and 2024 on technologies for “grid edge energy.” And PV and energy storage prices continue to fall, driving further adoption by residents and businesses.

Addressing these pivotal trends, on January 11, 2017 Stratton Report hosted its first live event in Sacramento, under the banner of “Grid 2.0: Strategic Planning for a High Distributed Energy Resource (DER) Future.”  The event was supported by Transactive Energy Association, CalCharge, California Business Alliance for a Clean Economy, and Sustainable Energy Project.

The Grid 2.0 Symposium kicks off a monthly series, with the sequel scheduled for February 21 in Silicon Valley.

The panel discussion was moderated by Mike Burke, President of SustainableEnergyProject.net, and formerly co-founder of New Energy Ventures, an early supplier of alternative generation to commercial & industrial customers. Burke’s current mission at S.E.P. is to identify and reduce hurdles to the widespread use of sustainable energy technologies. One S.E.P. initiative is a model ordinance for local government permitting of new energy technologies.

A panel of eight speakers representing different niches in the business and policy ecosystem offered a cross-section of views on how the ownership and operational models are likely to evolve, and what the major opportunities and challenges may look like, over the coming decade.

Panelists included Frances Bell, Senior Power Systems Engineer at SolarCity; Emilio Camacho, Chief of Staff to Commissioner Hochschild, California Energy Commission; Ed Cazalet, CEO, TEMix/Transactive Energy Association; Tilak Gopalarathnam, Director of Technology Partnerships at LG Technology Center of America; Jeff Gleeson, West Coast Energy Partnerships at NestLabs (now owned by Google); Smriti Mishra, Lead Program Manager, FERC Jurisdiction Strategy & Performance at National Grid; Neil Maguire, CEO of AdaraPower; Patrick Woods, Business Development, Advanced Microgrid Solutions.

 

Mr. Burke presented a “three bubble chart” of intersecting utility, customer and third party aggregator roles. (Third party aggregators could include demand response, microgrids, virtual power plants, ancillary services from distributed arrays, and other types of novel energy services.)

In Mr. Burke’s view, the changes that are underway are indeed epochal, equivalent in scale to the utility de-regulatory movement of the 90s, gas deregulation, and the disruption of the telecom industry by wireless and cellphones.

Burke noted,

I’m putting my money on the telecom analogy. PV’s and batteries will be the cellphone of the electric utility industry.

A hand-count of both panelists and audience revealed that the majority still see a dominant role for utilities a decade out, with most anticipating a split in the remaining market between “customer-centric” and “third party-centric” models.

 

Slide courtesy Mike Burke, SustainableEnergyProject.net

 

Panelists had a wide range of comments and activities in relation to this new mega-trend of the electric power industry.

Smriti Mishra, representing a major East Coast (and UK) utility, National Grid, stated 

The strategy right now is experiments. No one knows exactly how it will all turn out. There are some potential win-win-win solutions emerging.

Mishra proceeded to outline a number of forward-thinking projects in NG’s three territories, including delivering power from offshore wind to Rhode Island customers, a Smart Energy Solutions program in Massachusetts, a proposal to quadruple the number of EV charging stations, and New York REV pilots that include proposed gas-demand response and rooftop solar installations on behalf of low income customers. Clearly some utilities are looking at getting ahead of the curve and responding proactively to disruptive trends.

Slide courtesy Smriti Mishra, National Grid

Tilak Gopalarathnam of LG Technology Center of America commented,

The utility-centric model will dominate for the next few years, but as costs drop and it becomes possible to monetize residential storage, consumers will prefer to own these systems and exercise local control, which ensures that consumer preferences are met before making excess energy available for grid services. In the long term, residential Distributed Energy Resources (DERs) will become just another smart appliance.

He sees the two biggest immediate drivers as the prospect of FERC opening up wholesale markets to aggregated DERs [currently a FERC NOPR], and the continuing cost decline of energy storage systems.

Frances Bell of Solar City emphasized the value of distributed arrays to leverage extra value from solar + smart inverter systems, such as reactive energy, frequency control, and other ancillary services. In other words, the use of smart inverters can provide services to the grid — even without a battery. She also noted the growing need for better control and communications systems, the need for data transparency from utilities, challenges with overlapping or competing standards such as OpenADR, SEP2 and MESA, and also showed a generalized utility user interface SolarCity is developing.

Camacho from CEC opined that “CEC is moving towards a vision not just of the “Smart Grid” [in the old AMI/Smart Meter sense] but “Smart Systems” which will also include smart infrastructure like charging stations and Zero Net energy buildings, among other things. One of his refrains was, “steady policy is what will enable investment and innovation,” and suggested that storage could potentially follow the adoption curve of solar if the storage industry can present a united message for the industry, citing the precedent of the California Solar Initiative (CSI). As evidence of progress in smart infrastructure analysis, Camacho cited the recent cancellation of a $145M transmission project in Fresno because distributed generation was able to supply enough power, making the project no longer necessary. 

Sample vision of ‘Smart Systems’

For Neil Maguire at AdaraPower, it’s all about the software controls in energy storage systems. Batteries are the enabler and key to unleash solar – but you need flexibility of controls foremost. The controls need to be designed from the outset to be able to respond to changing rules and regulations and applications in different areas.”

For Jeff Gleeson at NestLabs,

the biggest opportunities will only come once we get the policy right, and when a truly integrated Demand Side Management is available.

NestLabs was able to help out SoCal Gas and SCE in the Aliso Canyon crisis by almost instantly aggregating 15 MW of demand response from its already installed base of Nest smart thermometers in the region.

Dialogue with the audience revolved around the infamous California “Duck Curve,” dropping cost of storage, SGIP, competing standards, the need for “patient capital” for innovative grid tech, future Cal decarbonization policies.

Moderator Mike Burke wrapped up the discussion with the provocative question, “Is the last gas plant in California already in the regulatory pipeline?”

 

To register for Grid 2.0 Series II: Transactive Energy : Click here