ANAHEIM, Calif. — As distributed energy resources (DERs) grow, utilities are seeking to ensure grid reliability and protect ratepayers from unneeded costs while opening the door to a wider variety of customer-stied technologies.
The balance of these two priorities can be rather precarious, and many attendees at the Energy Storage International / Solar Power International 2018 Convention addressed how to deal with the opportunities and pitfalls of DERs.
Utility Dive interviewed nine executives from DER vendors to find out what they want from utilities and who is getting it right. We asked them all the same question:
What's one thing utilities can do to bring about a successful distributed grid?
Adam Kramer
Title: EVP of strategy
Company: Switch, data center builder and operator
"I think it's simply about continuing the conversation and actually being open about finding a solution — because the energy market's continuing to change, the demands from C&I customers are continuing to change and the costs are still, still continuing to come down — and making sure that all parties can realize the benefit."
Because they have to ensure reliability and low costs, utilities often have different priorities from the third-party vendors pursuing innovation in DERs, Kramer said.
"They have that obligation to protect that risk, but they also are able to deliver benefits for saying our customers are willing to absorb some of that risk, and I think we talked about that a little bit up there," he said.
Polly Shaw
Title: VP of regulatory affairs and communications
Company: Stem, energy storage company
"Arcane barriers to multiple customer programs."
"For example, there's a billing account level that determines the customer's ability to participate in multiple DR programs or other types of grid services programs," Shaw said.
"Slowly working with utility partners" can help address those barriers, she said. "I think we're beginning to open up that question of when energy storage is available to customers it allows them to do multiple things for the utility's benefit, so how do you remove some of those older barriers to multiple-use applications, or dual participation rules, and really enable the customer a lot of more optionality."
Tony Clifford
Title: Chief Development Officer
Company: Standard Solar, subsidiary of Énergir
"More than anything, what I'd like to see from utilities is more of a cooperative spirit than a combative spirit. I think solar and utilities naturally can work well together."
"Now, some of that might be a change in perspective, since we're now owned by a regulated utility from Canada, but no, I've always thought that that was the case," he added. "Solar is not going to change the overall electricity network in the United States, but I think that renewables have a huge place in this and the utilities just have to figure out how to work with renewables."
For example, Clifford offered the ISO-New England report showing distributed solar saved about $20 million in charges during hot days in July.
"I mean, that happened. That's real, and it's happening on smaller scales everywhere," he said. "There are still a lot of utilities that are anti-net metering and they talk about how solar is getting a free ride on the back of ratepayers, and stuff like this never gets factored into the equation."
"There's a lot of other things that don't get factored into the equation for why solar is a good thing, and there are probably now 20 or 30 reports from various parts of the country talking about what the value of solar really is. I think utilities are going to be better off in the long run if they work with solar companies rather than work at cross purposes."
"And I can make the same argument about solar companies," Clifford added. "They'd be better off working with utilities."
Ted Ko
Title: Policy Director
Company: Stem, energy storage company
"First one is that, [for] any kind of grid services or grid needs they're trying to fill, give opportunities for DERs to provide them, so it's not just like 'I'm going to go put up a new pole or wire,' 'I'm gonna upgrade this substation' or 'I'm going to put these voltage regulators over here.'"
"If DERs can provide it, open up a program or pilot or an RFP or something like that to get DERs to do that. And that'll give DERs an opportunity to make more money."
"Second one is update your rate structures. Update your rate structures to be more time-of-use related, more dynamic, and that will encourage people to adopt DERs, and adopt DERs in a way that supports the grid, not makes the grid more difficult to manage, right?"
He described these steps as ideal for creating the "economic incentive for DERs to show up on your grid."
"And then the last thing you do is make sure you can interconnect them," Ko said, mentioning other panelist discussions. "Seriously, outside of California, they're all still trying to figure themselves out. There are interconnection processes that don't even have the word 'storage' in them in a lot of other places in the country. If we can get that to happen, the difference between taking six months to interconnect and taking three months to interconnect can make all the difference in the world, whether a product even goes through."
Dan Berwick
Title: Energy storage general manager
Company: Borrego Solar Systems, commercial solar developer
"Get smart on how energy storage can help the functionality of their systems and view it as ... a tool for improving safety and reliability, efficiency, cost, et cetera ... rather than an obstacle to protect safety and reliability."
Berwick distinguished storage from solar as a means to address renewable energy intermittency and the duck curve in California.
"The utilities that we work with know what they're doing around solar, for sure," Berwick said. "And we continue to want utilities to work more as partners and [that they are] seeing that energy storage is a key to increasing efficiency, reliability and, importantly, the environmental footprint of the electricity system."
"Ultimately, big picture, the more energy storage we get, the more wind and solar we can get," he said, hitting on the theme of converging distributed technologies that the convention highlighted. "And so, we want to see that utilities understand that potential and are pushing for it."
Manal Yamout
Title: Senior VP of policy and markets
Company: Advanced Microgrid Solutions
"I would say that all utilities should be more like Southern California Edison."
"Seriously," she said, "the reason that we're able to build 90 MW and 360 MWh [of storage] is because Edison — even before they did the storage procurement target — oversigned what their mandate was for the whole time of behind-the-meter storage [procurement]."
The California utility is a "prime example" of a power provider helping the distributed grid and third-party applications advance, Yamout said.
"For us, the fact that we have a utility contract is massive. It's how we're able to do $200 million financing, it's how we're able to bring on big customers, it's how we're able to make systems that actually scale and matter," Yamout said.
"Don't recreate the wheel," she told utilities. Simply copy what the "good ones" are doing.
Yamout went on to credit SCE for taking the time to understand the technology, noting a long process that required a lot of internal effort, to merge their generation contract and their traditional DER contract into "a whole new" power purchase agreement structure.
Samuel Adeyemo
Title: Chief Operating Officer
Company: Aurora Solar, project developer
"They need to understand that the people that are developing products are really there to support them and to help them, and aren't being confrontational. It just needs to be incorporated into electric planning and thinking as part of what a future of solar constitutes."
"My perspective is that currently, solar energy is 1 to 2% of the energy mix, right? The future, by all measures is that it's going to be 30%," he said. "So, what's going to have to happen is both the technologies and the policies in place [need] to ensure that, you know, utilities work well with distributed generation."
"One of the things that's most important is making customers' energy usage data more accessible," added Gwendolyn Brown, Aurora's content marketer. "And some of the utilities are doing that through Green Button data, which they're making available. A number of utilities are part of the Green Button Alliance, and that's really helpful from a design standpoint."
"Especially if you have a commercial customer where things like demand charges apply, you really can't get a lot of transparency into what those charges would be unless you have actual user data," Brown said. "So Aurora has made it possible to import that data, which is really helpful for solar design, but the actual availability of that across utilities, across the country, is still pretty limited."
Christopher Elias
Title: Director of energy storage business development
Company: SunPower Corporation, energy system developer
"Ironing out interconnection is always a hang-up in new markets, and I think it's a function of both utilities and developers having to deal with something new and get a couple of reps under their belt."
He noted the emerging storage market in Massachusetts. "We're just sort of working through the kinks of understanding how storage fits into existing interconnection machines and, you know, being collaborative there, which is largely happening."
Walker Wright
Title: VP of public policy
Company: ENGIE Storage, subsidiary of ENGIE
"Ultimately, I think where the [distributed generation] market and the utilities are aligned is that we are going to save ratepayers money by building a smarter, more efficient, smaller grid than it otherwise would be as we transition from central power generation to a more distributed future."
Utilities could grant "access to data to understand how our customers act and behave," Wright, who is also director of strategy and policy group at ENGIE North America, said. "And the second is cooperation in these different ancillary markets and wholesale markets."
"Customers are going to be generating their own power, storing their own power and having choices to participate in real power markets. So I think that's a nice sort of compromise point. And I think that if we work together, we're ultimately able to explain to the regulators that we're saving customers money."
