ORIGINAL REPORTING: Power Markets Get Busy In The West

Transmission as a reliability and affordability strategy drives CAISO and SPP regional market ambitions; SPP and CAISO utilities’ collaborations could lead to new national seams connections, analysts say.

Herman K. Trabish | December 12, 2022 (Utility Dive)

Editor’s note: Both market operators continue to move ahead aggressively to seize the benefits of regionalization.

In the newest market expansion efforts by the California Independent System Operator and the Southwest Power Pool, one plus one may equal a much bigger one. Both system operators are expanding their voluntary real-time energy imbalance markets for meeting last-minute system needs into larger day-ahead energy markets that will handle much of their system loads. And the recognition that larger markets require new transmission is driving SPP and CAISO to take on new and larger challenges, observers say.

The West’s September 2022 power system collaboration that protected reliability against larger-than-anticipated spiking demand during a heat wave “changed everything,” CAISO President and CEO Elliot Mainzer told Utility Dive in November. Western utilities and power providers now realize “collaboration can take the West further,” and are “ready for the next big step,” he said.

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Rising reliability threats have also affected how Western power providers see their financial opportunities, analysts and system executives said. “There is a widening perception that serving customers through a single territory’s system has higher generation costs that lead to higher rates,” said Rob Gramlich, founder and president of Grid Strategies. But “transmission that expands access to a region’s diversity of lower cost renewables can be an affordability strategy” while also protecting reliability and accelerating decarbonization, he added.

Real-world data and projections verify the economic value of real-time and day-ahead markets, both CAISO and SPP reported. And beyond their apparent competition for participants in planned regional transmission organizations, like those in the Northeast and Midwest, a mutual vision is emerging of something even greater, some observers told Utility Dive.

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Both CAISO and SPP are working methodically from real-time markets toward day-ahead markets. Total benefits from 2014 to 2019 for nine participants in CAISO’s real-time Western Energy Imbalance Market, or WEIM, of $861.8 million jumped, by the third quarter of 2022, to $2.91 billion for 19 participants, CAISO reported Oct. 31.

And WEIM collaboration protected reliability in September 2022 despite supply impediments and an unprecedented 6 GW demand spike across the West, Debra Smith, general manager and CEO of Seattle City Light, and other Western utility executives told a November 2022 CAISO Stakeholder Symposium. Their recognition of the new magnitude and frequency of reliability threats is driving support for CAISO’s Extended Day-Ahead Market, or EDAM, initiative, CAISO’s Mainzer said. The EDAM final draft proposal, released Dec. 8 for approval at a Dec. 14 CAISO meeting, defines key market structures, tariffs, transmission practices and other rules… click here for more

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New Study: Clean Energy Transition Now Hard-Wired Into the U.S. Economy; Eleventh annual edition of the Sustainable Energy in America Factbook highlights national data on the U.S. energy transition in 2022

March 1, 2024 (Bloomberg NEF)

“…[T]he U.S. economy is now firmly on the clean energy transition path to drive down emissions and create economic opportunities…even as supply chain disruptions, an international energy crisis, and rising interest rates elevated prices for key energy commodities, according to the 2023 Sustainable Energy in America Factbook…The Factbook reveals that 2022 represented a record-breaking year for energy transition investment, with global financing for technologies to decarbonize the world’s economy exceeding $1 trillion. In the United States, energy transition investment rose 11% year-on-year to $141 billion…

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…[R]enewable generation rose at the fastest pace among major sectors with a 13% year-on-year rise to its highest level ever…Renewables and natural gas have grown from a combined 43% of total U.S. power generation to 62% in just a decade. Zero-carbon power (renewables and nuclear power) comprised 41% of generation. The clean energy economy was also driven by investment in innovative decarbonization technologies...

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Post-Inflation Reduction Act commitments to the North American battery supply chain reached almost $17 billion by the end of 2022…even as the industry grappled with higher prices, rising interest rates, and supply chain issues…For the second year in a row, U.S. natural gas prices increased due to rising demand for natural gas at home and abroad, in part due to the conflict in Ukraine. The growth of the clean energy sector amid these difficulties suggests that the clean energy transition has become cemented within the U.S. economy…As a result, clean energy played a leading role in the U.S. economy in 2022 and set the stage for even more growth in 2023….” click here for more

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Monday Study – Grid Modernization Was Everywhere In 2022

The 50 States of Grid Modernization: 2022 Review and Q4 2022

February 2023 (North Carolina Clean Energy Technology Center)

Executive Summary

2022 GRID MODERNIZATION ACTION

In 2022, 49 states plus DC took a total of 778 policy and deployment actions related to grid modernization, utility business model and rate reform, energy storage, microgrids, and demand response. Table 1 provides a summary of state and utility actions on these topics. Of the 778 actions identified, the most common were related to deployment (181), followed by policies (139), and financial incentives (132)

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TOP TEN MOST ACTIVE STATES OF 2022

Ten states taking the greatest number of particularly impactful actions are noted below.

California

The California Public Utilities Commission opened a new rulemaking to advance demand flexibility through rates and released a white paper on demand flexibility strategies and customer distributed energy resource compensation, while continuing work to develop its microgrid program. The Commission considered a variety of utility proposals to deploy energy storage and smart grid technologies, and additional funding was allocated to energy storage incentives for low-income customers.

Connecticut

The Connecticut Public Utilities Regulatory Authority (PURA) approved a non-wires alternative program design, a reliability and resilience framework, and an innovative energy solutions program during 2022. PURA also continued proceedings related to performance-based regulation and advanced metering infrastructure, while United Illuminating filed a rate case including new performance metrics, resiliency pilots, and projects to support distributed system planning.

Massachusetts

In Massachusetts, regulators approved significant grid modernization plans for the state’s three major utilities – Eversource, National Grid, and Unitil – as well as Everousrce’s latest performance-based ratemaking plan with new scorecard metrics. State lawmakers enacted legislation requiring utilities to develop electric sector modernization plans and directing the Department of Energy Resources to study mid- and long-duration energy storage.

Hawaii

The Hawaii Public Utilities Commission approved additional performance incentive mechanisms for the HECO utilities in 2022, as well as an advanced rate design framework. The Commission approved a new smart dispatch program and the design for new distributed energy resource tariffs that focus on grid services. Regulators also continued efforts to implement a microgrid services tariff and opened a new proceeding on innovative pilots.

Maine

In Maine, state legislators enacted a bill requiring utilities to file grid plans including near-term grid investments that are needed. The Public Utilities Commission approved energy storage rates for Central Maine Power and Versant Power and considered Central Maine Power’s proposed Grid Model Enhancement Project and energy storage projects. The Governor’s Energy Office also created a quarterly energy storage forum.

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Illinois

The Illinois Commerce Commission approved new performance metrics for Ameren Illinois and Commonwealth Edison and took steps to develop guidelines for the integrated grid planning process. The Commission also completed its energy storage program report, adopted revised interconnection rules, and approved solar-plus-storage rebates for Ameren and Commonwealth Edison.

New Mexico

The New Mexico Energy, Minerals, and Natural Resources Department released its grid modernization roadmap in 2022, while the Public Regulation Commission approved revised rules for integrated resource planning and interconnection. El Paso Electric requested approval to deploy an advanced metering system, PNM filed its Grid Modernization Implementation Plan, and Xcel Energy proposed several grid modernization investments.

Colorado

In Colorado, regulators released proposed rules for organized wholesale markets, which require transmission utilities in the state to join a market by 2030. State legislators enacted bills establishing tax incentives for residential energy storage and a grant program to support microgrids for community resilience. Xcel Energy filed its first distribution system plan and a proposal to implement a resiliency service program (which was later withdrawn).

Michigan

Michigan regulators formed a new workgroup on grid integration and considered participation of energy storage resources in wholesale markets. Regulators approved revised interconnection rules and a new time-of-use rate for DTE Electric, while evaluating utilities’ distribution system plans outlining planned grid investments. A workgroup on customer data access and privacy also filed their final report and recommendations during the year.

Minnesota

The Minnesota Public Utilities Commission accepted utilities’ integrated distribution plans and approved new load flexibility pilot programs focused on demand response and thermal energy storage for Xcel Energy. The Commission considered Xcel Energy’s proposal for a resiliency as a service program, while also addressing interconnection and data access rules during the year.

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TOP GRID MODERNIZATION TRENDS OF 2022

Focusing on Resilience in Grid Modernization Activities

There was a central theme of resilience present in many of the grid modernization activities taking place in 2022. Several states enacted legislation making resilience improvements eligible for property assessed clean energy financing, and utilities proposed grid investments focused on improving resilience. Some states also considered new incentive programs for resilience investments like storage and microgrids, while others undertook studies or dedicated planning efforts related to grid resilience.

Undertaking Actions to Enhance Grid Management and Flexibility

An area of focus during 2022 was grid management and flexibility, with utilities planning investments in distributed energy resource management systems and battery storage and proposing new customer demand response programs and rate structures to shape load. A workgroup in Michigan is exploring grid integration of distributed energy resources, while a number of states have opened proceedings to consider demand response and flexibility practices, pursuant to a directive in the federal Infrastructure Investment and Jobs Act.

Utilities Proposing New Performance Incentive Mechanisms

Regulators in several states considered the adoption of new performance incentive mechanisms (PIMs) during 2022. The Illinois Commerce Commission approved a variety of new PIMs for Ameren and Commonwealth Edison, while Duke Energy Progress filed its plans for new PIMs with North Carolina regulators. In Hawaii, regulators approved additional PIMs for the HECO companies related to reliability, interconnection, and cost control.

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States Considering Wholesale Market Participation

Wholesale markets continued to be a major area of attention for many states during 2022, with states generally moving toward wholesale markets. The Colorado Public Utilities Commission issued a decision requiring transmission utilities in the state to join organized wholesale markets, while regulators in Arizona and South Carolina have been considering joining a market. Florida utilities also received approval to join the Southeast Energy Exchange Market.

Establishing Formal Distribution System Planning Processes

Across the country, more states are establishing formal processes for distribution system planning. In 2022, state lawmakers in Maine and Massachusetts enacted legislation requiring utilities to undertake such grid planning processes. Illinois regulators also took steps to implement a new grid planning process. Other states with formal distribution system planning requirements include Colorado, Michigan, Minnesota, and Oregon.

Utilities Pursuing Resiliency as a Service Programs

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A growing number of utilities are filing proposals to offer “resiliency as a service” programs, where utilities deploy battery storage systems at customer locations in order to provide resiliency benefits, especially to critical facilities. Regulators approved Georgia Power’s resilience asset service tariff, while regulators in California and Colorado considered utility plans for customer resiliency programs. Utilities in Connecticut, Minnesota, and Vermont also proposed investments focused on customer resilience.

Utilities Designing New Battery Storage Demand Response Programs

A number of utilities filed plans to offer new battery storage demand response programs during the year, which typically offer a performance-based incentive or bill credit for energy discharged during certain times. Idaho regulators approved a new battery demand response program for PacifiCorp, while Entergy New Orleans and Green Mountain Power were among the utilities filing plans for new programs. Michigan regulators denied DTE’s proposed program, instead expressing interest in exploring the design further.

States Allowing Cost Sharing for Grid Upgrades Needed for Interconnection

Regulators around the country considered interconnection rule revisions that would allow for the sharing of costs among generation owners for grid upgrades necessary for interconnection. The Connecticut Public Utilities Regulatory Authority opened a proceeding to investigate cost sharing proposals for distributed energy resource interconnection upgrades, while regulators in Minnesota, New Mexico, Vermont, and other states also considered cost sharing for grid upgrades

Incorporating Critical Peak Pricing into Rate Structures

As more utilities continue to offer time-of-use (TOU) rate options, an increasing number of these rates are incorporating critical peak pricing periods. The North Carolina Utilities Commission approved new dynamic rate designs for Duke Energy that include critical peak pricing elements, while Tennessee regulators approved a new TOU rate for Kingsport Power that includes a critical peak charge.

Examining Battery Storage Decommissioning and Recycling

Several states initiated efforts to address the decommissioning and recycling of battery storage facilities. South Carolina legislators enacted a bill to develop regulations managing the decommissioning of larger solar and storage facilities, and Virginia lawmakers created a task force to analyze the life cycle of energy facilities including energy storage. In Tennessee, legislators initiated a study that will examine end-of-life management for battery storage systems.

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LOOKING BACK: 2017 to 2022

Total grid modernization action decreased somewhat in 2022 compared to last year, while remaining at a very high level of activity. States and utilities took approximately 778 actions in 2022, compared to 823 actions in 2021, compared to 658 actions in 2020, 612 actions in 2019, 460 actions in 2018, and 288 actions in 2017. In 2022, activity increased slightly in the areas of studies and investigations, rate and utility business model reform, and financial incentives. The number of states taking actions held relatively steady in most categories from 2021 to 2022.

Q4 2022 GRID MODERNIZATION ACTION

In the fourth quarter of 2022, 47 states plus DC took a total of 422 policy and deployment actions related to grid modernization, utility business model and rate reform, energy storage, microgrids, and demand response. Table 2 provides a summary of state and utility actions on these topics. Of the 422 actions identified, the most common were related to deployment (91), followed by policies (88), and utility business model and rate reform (72)…

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President Biden Talks New Energy On The Daily Show

This president knows New Energy deeply. From The Daily Show via YouTube

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Aussie Politics And Climate Policy

Nobody has a better vocabulary than the Aussies for describing backward politics and climate policy. From the juicemedia via YouTube

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New Energy And Land Rights

This is a classic heartlands debate about the right to build New Energy. From greenmanbucket via YouTube

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Global New Energy Needs Boost New Equity

New report finds glaring disparities between investments in developed and developing countries, calls for substantial increase in financial flows from Global North to South.

22 February 2023 (International Renewable Energy Agency)

“…[G]lobal investment in energy transition technologies last year—including energy efficiency—reached USD 1.3 trillion. It set a new record-high, up 19% from 2021 investment levels, and 50% from before the pandemic in 2019…[but] still represents less than 40% of the average investment needed each year between 2021 and 2030…

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…[And despite] reaching record-high annual investments exceeding USD 0.5 billion in 2021, investment in off-grid renewable solutions falls far short of the USD 2.3 billion needed annually in the sector between 2021 and 2030…[I]nvestments have become concentrated in specific technologies and uses. In 2020, solar photovoltaic alone attracted 43% of the total investment in renewables, followed by onshore and offshore wind at 35% and 12% shares…[M]ore funds need to flow to less mature technologies…

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About 70% of the world’s population, mostly residing in developing and emerging countries, received only 15% of global investments in 2020…In 2021, investment per capita in Europe was 127 times that in Sub-Saharan Africa, and 179 times more in North America…Achieving an energy transition in line with the 1.5°C Scenario also requires the redirection of USD 0.7 trillion per year from fossil fuels to energy-transition-related technologies…” click here for more

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Latin America’s Big Moves On New Energy

Latin America Set to Become Global Energy Giant Through Renewables

Sarah Jennings, March 17, 2023 (Environment + Energy Leader)

“Latin America is embarking on a new era of renewable energy, led by commitments to wind and solar utility-scale projects by Brazil, Chile, and Columbia…[A new Global Energy Monitor report forecasts] the current solar and wind power capacity could increase by 460% by 2030…[and be] 70% of the total electrical capacity growth in the region…With a high potential for solar exposure and offshore wind development, Latin America is a goldmine for renewable energy…

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[Regional governments have] encouraged economic commitments with solid policy responses to climate change. The three leaders in growth – Brazil, Chile, and Columbia – all have employed energy auctions, opened up private investment, and found tactics to decrease the cost of solar and wind installations…[Brazil surpassed its a ten-year plan] to implement 20 GW of wind power and 3.5 GW of utility-scale solar capacity by 2023… 21.5 GW of operational onshore wind power and 5.4 GW of operational utility-scale solar power…

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Colombia also appears set to exceed its goal of adding 4 GW of renewable energy to its grid by 2030…[Despite] Mexico’s COP27 pledge to bring 40GW of solar and wind power online by 2030, the current pipeline of new projects is nowhere near that…[Chile’s] current policies seem to sway towards a 100% renewable energy system by 2030…[with policies] that will increase solar in the Atacama region and offshore wind development in Patagonia…” click here for more

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Increase In Power System Attacks Linked To Hate Groups

Attacks were up 71% in 2022, The FBI has found neo-nazi and other hater ideologies plotting.From CBS News via YouTube

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Critical Supply Chain Components Are Coming

Yes, there can be points of failure in the Economy-Wide Electrification supply chains, but yes, they are being addressed.From CNBC Television via YouTube

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Australia’s Tomorrow Power System

Supply and demand dynamics are changing in complex and interactive ways and the elements used to respond to those dynamics must change to address that or the system may fail. From Strategen via YouTube

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U.S. and Ukraine To Build The Power System Of The Future

US Energy Secretary Discusses Plan to ‘Warproof’ Ukraine’s Electrical Grid

Iuliia Iarmolenko, February 24, 2023 (Voice of America}

Ukraine’s power grid has been a target of Russian attacks since mid-October. The United States now is in the process of sending a third round of assistance to help restore damaged infrastructure…But the ultimate goal is to help Ukraine build a new ‘warproof’ distributed power grid, said Jennifer Granholm, the U.S. secretary of Energy…[It would be a] grid that is distributed, that has clean energy, but also that isn't so centralized so that it becomes a target…[U.S.] national labs that are already preparing strategies…[It would consist of] high-voltage equipment that would be compatible with Ukraine's [Soviet-era] electric grid…[and U.S. transformers are not] compatible…

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…[In] the long term, it needs to be a more] distributed electric grid so that if one section is damaged, it doesn't bring down a whole region…[Granholm said Ukrainians] ‘have spines of steel…[and the U.S. wants to] support such courage and determination’… [Ukrainian Energy Minister Herman Haluschenko wants to work with the National Renewable Energy Lab to build back in a way that allows 100% clean energy, resilience, and] energy security…” click here for more

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Do U.S. EV Supports Threaten EU Energy Transition?

Biden and the EU's von der Leyen meet to ease tensions over trade, subsidy concerns

Rob Schmitz, March 10, 2023 (NPR)

“President Joe Biden will meet European Commission President Ursula von der Leyen in Washington Friday in an effort to reduce tensions over trade, maintain a unified focus on achieving a green economy, while hoping to jointly take on China's hold on clean energy technologies and supply chains…[The Biden administration's Inflation Reduction Act, or IRA] promises tax breaks to companies making technology for clean energy, like electrics vehicles and batteries, but only if their operations are located on U.S. soil…

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European leaders are concerned EU companies will flee Europe to cash-in…The Biden administration appears open to addressing some of these concerns…[Some in the EU see the potential for blackmail, with multinationals like chemical giant BASF and car manufacturer BMW] trying to squeeze billions of dollars out of an already cash-strapped EU…[leaving the EU with] less money to help incentivize carbon-saving climate goals…[The result would be that] the environment loses and big multinationals win…

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The Biden administration appears open to addressing some EU's concerns. The White House would prefer to have a partnership so that the U.S. and EU can work together to instead reduce their dependence on China, which controls many of the rare earth minerals, their processing and manufacturing, needed for this clean energy transition…” click here for more

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ORIGINAL REPORTING: Investments In Utility System Upgrades Stuck In Cost Cutting Paradox

High electricity rates impede crucial but costly technology investments to manage rising DER levels: Utilities; New system investments, made before levels become overwhelming, will realize distributed resources’ system

Editor’s note: Inflation and the accelerating need for system upgrades to integrate New Energy have only made this paradox a greater dilemma.

The clean energy transition makes the question of how distributed energy resources, or DERs, fit in the future energy mix particularly urgent, utilities and DER advocates agree.

The technical potential of DER like rooftop solar, batteries, electric vehicles, and flexible industrial and building loads like smart water heaters and heat pumps could “play a significant role” in a 100% clean energy mix, an August Department of Energy study found.

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With adequate “distribution system visibility and control” of DERs, they can “help protect system reliability and resiliency,” agreed Xcel Energy Colorado President Robert Kenney. But “the cost of new technologies to manage those resources threatens rate affordability and slows deployment because regulators and utilities face the responsibility to balance stakeholder concerns,” he added.

Integrating high DER penetrations into power system operations will ultimately require significant investments in technologies like Advanced Distribution Management Systems, or ADMS, and Distributed Energy Resource Management Systems, or DERMS, utility representatives and DER advocates acknowledged. The question is how and when those investments are made.

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Transportation and building electrification, constraints on bulk system resource delivery, and consumer demand “require addressing DER growth,” Generac VP, Markets and Programs, Josh Keeling, a former Portland General Electric executive, said. But a staged deployment of technologies to manage them “can reduce their costs and burdens and benefit customers and power systems over the long term,” he said.

A “national initiative” and stakeholder dialogue can build a framework for that staged DER integration to protect affordability and reliability for customers, according to recent papers from a group of DER analysts. But advocates underestimate the urgency of investments in distribution system situational awareness for managing DER and limitations of the nation’s divided regulatory jurisdictions to approve them, utilities said… click here for more

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Biden New Energy Supports Grow A “Battery Belt” Across Red States

Republicans in the US ‘battery belt’ embrace Biden’s climate spending; Southern states led by Republicans did not vote for climate spending, but now embrace clean energy dollars like never before

Oliver Milman, 22 February 2023 (UK Guardian)

“…[Billions of dollars of new clean energy investment in the the Inflation Reduction Act (IRA) for solar, electric vehicle and battery manufacturing has transformed a swathe of southern states into] a so-called “battery belt” in the economic transition away from fossil fuels…[Despite no Republican voting for the IRA,] Republican-headed states have claimed the lion’s share of new renewable energy and electric vehicle activity since the legislation, with Republican-held congressional districts hosting more than 80% of all utility-scale wind or solar farms and battery projects currently in advanced development, according to an analysis by American Clean Power…

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…States blessed with plentiful wind and sunshine, along with significant rural and industrial communities, such as those across the Great Plains and the south, appear best positioned to capitalize on the climate bill. Texas, already a bastion of wind power, could see $131bn in IRA-linked investment this decade, Florida may see $62bn and Georgia $16bn, according to an RMI analysis…Democrats have touted the bill for not only helping tackle the climate crisis but also as a way to wrest the initiative from China, which has dominated the manufacturing of parts for clean energy systems and electric cars until now…

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…[L]ast year’s IRA, with its sweeping tax incentives for emissions-reducing technologies, has made the environment [to China to build production capacity in the U.S., especially in Republic states,] even more enticing…[And] the trajectory of the transition is becoming more undeniable. As the cost of renewables continues to plummet and more Americans turn to electric cars, thanks in part to the ‘unprecedented scale’ of the IRA, partisan divides on the issue may soften…” click here for more

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