Emerging technologies and the electric grid

Monday, March 27, 2017

A task force examining the deployment of emerging technologies across the North American electric grid has identified three imperatives necessary to ensure the continued reliability and efficiency of the bulk electricity system, relating to: renewable supply and integration; greater situational awareness; and controlling an increasingly distributed energy system, with increased deployment of distributed energy resources.

The 39-page report, “Emerging Technologies: How ISOs and RTOs can create a more nimble, robust electricity system,” was published on March 16, 2017, by a group of nine Independent System Operators (ISO) and Regional Transmission Organizations (RTO) known collectively as the ISO/RTO Council (IRC).

With respect to integrating renewable resources, the IRC noted that it "[s]upports policies and positions recognizing the electricity system’s ability to accommodate large amounts of renewables and realizing their growing potential."  While remaining "agnostic to specific technologies that may faciiltate renewable integration", IRC supports policies that accommodate emerging renewable integration technologies, while "avoiding early technological lock-in."

With respect to situational awareness, the IRC notes the lack of available data on the penetration of distributed energy resources, but that a lack of data or its sharing should not limit grid operators' understanding of what's happening on the grid.  IRC suggests the development of a general operational data framework, "where increasingly comprehensive operational data from the distribution system is provided as DER penetrations reach different thresholds."

The report also notes, "Because of emerging technologies, North America’s electricity systems are moving toward a more distributed arrangement." In 2016, the Federal Energy Regulatory Commission issued a Notice of Proposed Rulemaking in which it proposed rule changes "to remove barriers to to the participation of electric storage resources and distributed energy resource aggregations" in organized wholesale electric markets.  Recognizing that such a rule change could set a framework for future DER growth, the IRC calls for continued coordination, data sharing, and flexibility.

Maine net energy billing rules, 2017 revision

Monday, March 20, 2017

On January 31, 2017, the Maine Public Utilities Commission adopted revisions to its rule chapter 313, governing net energy billing.  Net metering, or net energy billing, is the metering and billing mechanism that Maine and most other states have adopted to promote the development of solar photovoltaic and other distributed renewable energy facilities.  While the Commission first adopted a net energy billing rule in the early 1980s, its 2017 revisions to that rule reduce the benefits of net metering for future projects.  Here's a look at Maine's revised net energy billing rules.

The Commission described its actions in a written order dated March 1, and published its final rule on the same date.   Most notably, the Commission reduced the amount of future generation facility output that can be netted against its transmission and distribution utility bill -- by first introducing, then reducing, a concept called "nettable energy."  Nettable energy is now the entire amount of energy generated by the facility, including the amount consumed by a customer “behind-the-meter”.  This shift -- from netting on a net basis, to netting on a gross basis -- is a significant change in state policy that is unfavorable for behind-the-meter generation.

As before, a net energy billing customer with solar or other eligible generation may offset all of its energy supply bill with its nettable energy.  But the Commission's new rule phases out the former 100% crediting of net energy for transmission and distribution charges.  Depending on the year into which a project is placed in service, the new rule reduces the portion of the "nettable output" -- what counts for netting -- by 10% in each of the next 10 years, reaching 0% T&D crediting for customers that become net energy billing customers after calendar year 2026.  The result is a gradual reduction of the incentive to net energy bill.  (Note that once a customer becomes a net energy billing customer, its rate treatment will generally last for 15 years.  Likewise, existing net energy billing customers may continue to net bill under the previous rule's approach for a 15-year period, after which they could continue to net for supply but not for T&D.)

The Commission also added a section covering renewable energy credit (REC) aggregation.  Section 4 of Chapter 313 provides that new customers in 2018 and after may elect to have the RECs or environmental attributes of project power be aggregated by their local investor-owned utility for sale into the regional market, with the proceeds returned to participating customers.  The Commission described its decision to include a REC aggregation program as "an effort to obtain on an optional basis a value stream that is not currently being monetized."  If small renewable projects would qualify for RECs, but are either not doing so or are not selling the RECs, REC aggregation options may allow some projects to connect with the market.  On the other hand, by selling the RECs, the project owner or power consumer cannot claim to have consumed green electricity, so there are tradeoffs.

The Commission did not change some other aspects of the rule, such as maximum project size (660 kW) or its limit on the number of accounts or meters permissible under a single net energy billing arrangement (10).  It noted, "Fundamental changes to NEB in Maine and promotional programs for larger renewable and community solar projects are the purview of the Legislature as a matter of State energy policy."

Based on a list of legislative requests, the state legislature will consider at least 12 bills relating to solar energy in its 2017 session.

On March 10, the Commission published a Frequently Asked Questions document covering the Chapter 313 net metering rules.  The FAQ provides answers to 10 questions, ranging from why the Commission changed the rule, to providing specific examples of how much nettable energy a customer would be able to claim depending on the year in which its project was placed in service.

US auctions North Carolina offshore wind sites

Friday, March 17, 2017

Yesterday the U.S. Bureau of Ocean Energy Management completed a competitive lease sale for renewable wind energy development in federal waters offshore North Carolina.  Avangrid Renewables, LLC won the auction-based sale with a high bid of $9,066,650.  As a result, it has the right to lease 122,045 areas of ocean space in the designated Kitty Hawk Wind Energy Area.

The Kitty Hawk Wind Energy Area sits 24 nautical miles from shore, off the northeast coast of North Carolina by the Virginia border.  The base roughly triangular area extends 25.7 nautical miles in a general southeast direction, with a seaward apex in the northeast.  Using the National Renewable Energy Laboratory’s estimates of 3 megawatts per square kilometer, the lease area has a potential generating capacity of 1,486 megawatts.

BOEM announced the Kitty Hawk auction in January 2017.  Its conclusion yesterday represents the first federal offshore wind lease sale under the Trump administration.  According to BOEM, three other bidders particiated in the auction: Wind Future LLC, Statoil Wind US LLC, and wpd offshore Alpha LLC.

The North Carolina auction was BOEM's seventh competitive lease sale.  In all, competitive lease sales have raised about $67 million for the federal government.  While no commercial offshore wind projects are currently operating in federal waters, the Deepwater Wind Block Island project off Rhode Island began commercial operation last year.

FERC to hold session on state policies, wholesale markets

Wednesday, March 8, 2017

U.S. energy regulators have scheduled a two-day technical conference to consider how state energy policies affect wholesale electricity markets.

In a March 3 notice of technical conference, the Federal Energy Regulatory Commission gave public notice that it will hold a technical conference on May 1 and 2, 2017.  The notice describes tensions between competitive wholesale energy and capacity markets and state policies.  On the one hand, the Commission noted, "Competitive wholesale energy and capacity markets bring value to customers by efficiently pricing energy and capacity , taking into account the operational needs and the dynamics of the transmission system , and providing transparent signals for investment and retirement of resources."  Generally speaking, these wholesale competitive markets currently select resources based on principles of operational and economic efficiency without specific regard to resource type

But on the other hand, the Commission notes recent increases in "interest by state policy makers to pursue policies that prioritize certain resources or resource attributes" (such as renewable resources, or in-state resources).  That has led to what the Commission calls an "open question": "how the competitive wholesale markets, particularly in states or regions that restructured their retail electricity service, can select resources of interest to state policy makers while preserving the benefits of regional markets and economic resource selection." These topics have come up in discussions relating to several eastern regional transmission organizations and independent system operators, such as the IMAPP process in New England, and similar efforts in PJM and NYISO to consider the integration of public policy into markets.

To foster further FERC-level discussion about the development of regional solutions that "reconcile the competitive market framework with the increasing interest by states to support particular resources or resource attributes," the Commission has scheduled the May 1-2 technical conference. The notice specifically references a range in potential long-term expectations regarding the relative roles of wholesale markets and state policies in shaping the resource mix -- ranging from no state role on the one end, to state authority over resource selection that must be accounted for in wholesale market design -- and a variety of potential solutions in between.

Anyone who wishes to participate in the conference may submit a nomination form to FERC online by 5:00 p.m. on March 17, 2017.