SEPA explores the massive solar, storage opportunity in Massachusetts in new report

massachusetts solar regulation

The Smart Electric Power Alliance (SEPA) and ScottMadden released their latest report in SEPA’s 51st State Perspective series: “Massachusetts: A Great Clean Energy Story – DERs and the Next Chapter,” which explores the potential for Massachusetts to deploy significantly more clean energy.

Massachusetts has been a long leader in the deployment of clean energy and has demonstrated a strong commitment to reducing greenhouse gases. The Commonwealth’s approach to integrating clean energy has included a combination of policies such as renewable portfolio standards, capacity and generation targets for specific technologies, an energy efficiency resource standard, as well as solar and other incentive programs. Additionally state policy makers have set targets for solar PV, storage, and electric vehicles, resulting in high penetrations of renewables. The SEPA-ScottMadden report summarizes the legislative and regulatory actions that are contributing to further integration of distributed energy resources (DERs) as customers adopt them.

Legislative and other initiatives driving energy market transformation in the state include:

• Policies such as the Green Communities Act of 2008 and the Energy Efficiency Resources Standard, which have contributed to Massachusetts’ position as the leading state in energy efficiency for several consecutive years
• Revenue decoupling in 2008 to promote energy efficiency investments
• Net metering since 1982 and the increase of caps (% capacity in MW) over the years
• The ability for utilities to earn a return on energy efficiency investments

attack-the-tariff-300x250

Compared to other states such as California, Illinois and New York, the Commonwealth’s approach to advancing DERs has been far less aggressive. These states have placed an emphasis on the value that DERs can provide to the distribution grid that goes beyond their renewable characteristics through various proceedings and pilots to more fully integrate and optimize DERs. Whereas Massachusetts’ focus has been on a variety of policies to advance clean energy and reduction of GHG, which has resulted in high penetrations of renewable energy resources, but it has not focused on upgrading infrastructure, deploying AMI, or optimizing DERs in the way that other states have.

While the Commonwealth’s progress to date on advancing clean energy, increasing economic development, and reducing impacts of GHG emissions is quite impressive, questions remain about whether recent legislative and regulatory initiatives will enable innovation to support further DER deployment. The lack of AMI and related customer-side infrastructure, as well as limited rate options, make further DER deployment and integration uncertain.

Co-author Sharon Thomas, Senior Analyst at the Smart Electric Power Alliance, added, “Massachusetts’ nation-leading role in energy efficiency is very impressive. However, demand-side resources are not prominently prioritized in current regulatory and legislative actions. We will have to wait and see if the Commonwealth’s current business models and structures will support continued growth.

“The focus in Massachusetts has been on the integration of clean energy and the reduction of GHG, which has resulted in high penetrations of renewables. To date, however, the same focus has not been placed on upgrading physical infrastructure (e.g., AMI) and changing the utility business model to drive integration and optimization of DERs,” adds Cristin Lyons, partner and energy practice leader at ScottMadden.

— Solar Builder magazine

SEPA: Community solar capacity doubled in 2017, driven by third-parties

smart electric power alliance

Community solar capacity in the United States more than doubled between 2016 and 2017, from 347 megawatts (MW) at the end of 2016, to 734 MW at the end of 2017. At present, 228 utilities in 36 states have active community solar programs. Those figures are part of the findings in a new report — “Community Solar Program Design Models” — from the Smart Electric Power Alliance (SEPA).

In addition to providing current figures on the expansion of community solar, the “Design Models” report covers lessons learned from existing projects, and a basic “decision tree” tool aimed at helping utilities and other developers ask the right questions for successful projects. The report includes research findings developed in collaboration with the Coalition for Community Solar Access (CCSA).

Key takeaways

• In 2015, utilities administered 60 percent of all community solar programs, versus 40 percent for third-party organizations. That split has since flipped. Third parties now account for 67 percent of community solar programs, versus about 33 percent for utilities.

• The average subscription rate for community solar projects is 83 percent; with subscription rates for third party-owned community solar over 90 percent. Subscription success depends on a range of program design elements, but a project’s financial value proposition remains a major driver.

• Utilities are starting to explore the use of community-scale, distributed solar as a grid asset for improved reliability and grid support services. In Minster, a community-based project combining solar and storage has allowed the town to generate four separate value streams from a single project.

• Many of the community solar projects in service are targeted at low-to-moderate income customers, renters and residential customers who live in multifamily buildings. In the past, these customers have been unable to access the benefits of solar because they don’t own their roofs, or if they do, their roofs cannot support solar.

 

— Solar Builder magazine

Report: Utilities still have a lot of electric vehicle planning to do

electric vehicle infrastructure

Amid rising predictions of the accelerating adoption of electric vehicles (EVs) across the country, a new report from the Smart Electric Power Alliance (SEPA) finds that many U.S. utilities are still in the earliest stages of EV programs and activities. Based on a survey of 486 utilities the report, “Utilities and Electric Vehicles: Evolving to unlock grid value,” states that nearly 75 percent were either in the early stages of planning for EV market growth or had yet to start developing strategies or programs. The utilities surveyed provide power to about 70 percent of all residential, commercial, and industrial customers in the United States.

“Utilities have a key role to play in EV market growth, as providers of ‘fuel’ — electricity — as a platform for charging infrastructure, and as a leader in standards development and consumer education,” said Erika Myers, SEPA’s Director of Research and lead author on the report. “Yet, our research shows that the situation right now is similar to what we saw with the growth of distributed solar. If predictions are correct, many utilities will be caught unprepared, with few ready to take full advantage of this new demand by leveraging EVs as a grid asset.”

Key findings

• Analysts now forecast that EV energy use could rise from a few terawatt-hours (TWh) a year in 2017 to at least 118 TWh and as high as 733 TWh by 2030. These forecasts are the equivalent of the average annual power consumption of 9 million to 68 million U.S. homes, respectively.

• With the utilities surveyed classified as either in an Early, Intermediate or Late Stage of EV program development, only 3 percent were in the Late Stage, while 23 percent were Intermediate and 74 percent were Early. (See Figure 1 below.)

SEPA EV utilities

• Larger investor-owned utilities (often as a result of regulatory or legislative mandates) were more likely to be in the Late Stage, while municipal utilities and electric cooperatives serving smaller customer bases tended to be classified as Intermediate or Early.

• Regulatory action related to EVs and charging infrastructure remains dispersed and uneven. Regulatory filings are clustered primarily in states with high numbers of EVs or pro-EV policies, and include dockets on utility programs associated with Intermediate or Late stages. Utility ownership of EV charging systems is a particular point of discussion among regulators.

• To promote the development of robust EV strategies, utilities should collaborate with stakeholders across the industry; mitigate and manage grid impacts of EV adoption; and share information and best practices to cut the time and cost of new EV programs.

The report also highlights examples of utility programs across the country, reflecting different stages of EV program development. San Diego Gas & Electric has one of the the highest total number of EV programs and activities accounted for in the research. The utility’s Power Your Drive program allows customers in apartments and condominiums, or at businesses, to access charging stations that use an EV rate that is based on actual, day-ahead hourly pricing. Customers can use a phone app to enter their time preferences, giving them the option to save money by charging during the lowest-price hours of the day.

— Solar Builder magazine

How do we solve the utility identity crisis? SEPA pushes for ideas

solar energy utility grid modernization

Disruption within the electric power sector has led to a changing, and sometimes unclear, role for U.S. utilities — uncertainty that has resulted in delayed investment in critical infrastructure for a 21st century grid and, sometimes, an unnecessary rift between utilities and renewable energy industries.

So, instead of mapping out sensible plan for the future, everyone gets bogged down in short-term, day-to-day victories. Every week brings a new example somewhere around the country.

Last week, Maine continued to have problems deciding its energy future, paralyzed by the discord of competing lobbyist voices. The pro- and anti-solar sides have been locked in a fight over the future of net metering for over a year, but a bill was passed in July that was going to temporarily keep net metering incentives in place while the Public Utilities Commission conducts a cost-benefit study. Crucially for solar advocates, this bull would supplant a net-metering rule approved this year by the PUC that would gradually phase out net-metering benefits starting in January.

This reasonable compromise was vetoed by Gov. Paul LePage, but the bill passed with enough votes to override this veto – but further action has been delayed after a renewed lobbying campaign has representatives unsure of their votes.

From The Portland Press Herald:

But when politicians came back to Augusta on July 20 to take up unfinished business, the bill suddenly went off the schedule. Three factors were behind the postponement: cost concerns, legal language and special interest lobbying.

According to state filings, more than 20 organizations reported lobbying expenses in June related to the bill, L.D. 1504. The greatest spending by far was by the Industrial Energy Consumer Group, which supports the solar bill and represents large electric customers. It reported more than $18,000 in lobbying expenses that month.

The Northern New England Solar Industry Alliance, led by rooftop solar installers, was next with $6,400. CMP, which employed three different lobbyists that month, reported expenses of $2,700.

In North Carolina though, Gov. Roy Cooper signed House Bill 589, a substantial portion affirms the place of the solar industry within the state. This new law will provides for a competitive solicitation process for new utility-scale solar, access to rooftop solar leasing and a new Green Source Rider, will drive an estimated $14.6 billion in direct investment in solar energy in North Carolina.

This bill also included a controversial wind energy moratorium that Cooper did not support. So, immediately after signing the bill, Cooper signed Executive Order No. 11, aimed at promoting wind energy and mitigating the effects of a wind energy moratorium that he opposes.

“By signing House Bill 589, Gov. Cooper sends a strong signal that North Carolina plans to continue to lead the nation on solar energy while also opening the door to energy storage deployment in the state,” stated Advanced Energy Economy VP of State Policy, J.R. Tolbert. “This legislation, with its many positive provisions, was largely the product of a comprehensive stakeholder process. Unfortunately, in the final hours, the state Senate inserted an arbitrary 18-month moratorium on permitting for wind projects into the bill. This ill-considered action will bring to a halt $700 million in wind projects already in the works for the state, and send a chill through a wind industry that is otherwise poised to match the economic contribution of solar in North Carolina.”

Anyway, those are just two totally different examples, but that’s the point: These politically motivated energy decisions are all over the place. Is anyone interested in trying to find a real solution?

SEPA looking for answers

To provide more clarity on this essential issue, the Smart Electric Power Alliance (SEPA) has launched a new phase of its 51st State Initiative with an industry-wide call for papers on key questions surrounding the evolving role of utilities. As in the previous two phases of the initiative, industry thought leaders, executives, and top researchers and innovators from across the country will weigh in on a range of core topics.

“Utilities must evolve to meet ever-changing customer wants and needs. But without clarity on what is in-bounds and what is out-of-bounds, customers will not receive maximum benefit because the electric power sector can’t respond to their demands as quickly or fully as possible,” remarked Courtney McCormick, Vice President of Renewables and Energy Solutions, PSE&G.

Some of the issues the papers will address include:

• In the face of rapid, technological change, does utilities’ longstanding “natural monopoly” on power distribution provide the economic and social value as originally intended? What parts should or should not be maintained?

• As new distributed technologies are integrated onto the grid, where and on what levels should utilities be allowed to compete? Should utilities be allowed to own specific distributed devices, such as smart meters, inverters or electric vehicle charging infrastructure?

• With evolving business and regulatory models, who will be the electric power provider of last resort, and what will that mean on a distributed grid?

“As an intelligent energy storage company, we have to understand the fundamentals of how the power industry will evolve,” said Karen Butterfield, Stem’s Chief Commercial Officer.
“It is imperative that the roles of all market participants are clearly defined, so we can make decisions about when to partner, and when to go it alone.”

Submissions are due no later than Sept. 22.

 

— Solar Builder magazine

SEPA trying to develop new metric to measure distributed energy resources

Locational value, the potential to defer traditional “wires” investments, is a key value proposition for distributed energy resources (DERs), such as battery storage, distributed solar, energy efficiency and demand response. With the push to incorporate DERs into distribution planning, a common metric or approach is needed for assessing potential capacity deferral value. The Smart Electric Power Alliance (SEPA), in partnership with Nexant, is trying to do this in its newest report entitled: “Addressing the Locational Valuation Challenge for Distributed Energy Resources.”

smart electric power allianceBased on case studies with Central Hudson Gas & Electric and other utilities, the methodology in this report calculates a common locational value metric that identifies opportunities for “non-wires” alternatives and can be applied across electric utility service territories and DERs.

“The ability of DERs to defer traditional distribution investments depends on how well the operational characteristics of DERs, both individually and as part of a portfolio, align with local peak patterns and needs,” said Josh Bode, Vice President at Nexant. “This report summarizes a scalable methodology that utilities can integrate into their planning processes to optimize the mix of DERs throughout their distribution system.”

Key insights of the report include:

• Utility managers asked to integrate DERs into distribution system planning need a way to compare DERs to more traditional distribution resources. However, approaches that seek to boil DER value down to a single benefit-cost ratio or average value per kilowatt-hour are overlooking the differences in temporal and locational characteristics inherent in DERs.

• A metric applicable across various DER technologies allows for the capacity deferral value provided by various DERs to be stacked and combined.

• Four factors help identify when and where DERs have the potential to provide the most distribution deferral value: excess capacity, projected load growth, load shape attributes and the timing, duration, and magnitude of need.

• The proposed Load Carrying Capacity Factor (LCCF) is a measure that captures the ability of a given DER to provide effective locational capacity, when and where it is needed.

“Understanding the locational value that DERs offer to the grid is critical to their integration to distribution planning and for indicating the correct market signals to providers,” said Hal Turner, Manager of Electric Engineering Services at Central Hudson.

“Valuing DERs has been and will continue to be one of the keys to unlocking the powerful synergies they can offer for customers and utilities.” said Julia Hamm, SEPA President and CEO. “By recognizing the impact of time and locational variables, the Nexant methodology has the potential to move industry discussions beyond traditional cost-benefit analyses. As energy technologies evolves, our methods for valuing these resources have to evolve too.”

Josh Bode will present a summary of the report and discuss the locational valuation methodology 3:30-4 p.m., Wednesday, Sept. 14, at Solar Power International in Las Vegas. Bode and SEPA researchers will also be available for interviews during the conference.

You can download ”Addressing the Locational Valuation Challenge for Distributed Energy Resources” here.

 

— Solar Builder magazine