The modernisation of the US power grid has seen significant progress in 2019. Smart Energy International’s Philip Gordon explores this in more depth.
It’s becoming familiar ground, working in a sector where technology is continually evolving at a rate federal and state regulators seemingly can’t keep pace with, leaving utilities stuck in a semi-state of partial readiness, but unable to make big moves as oil, gas and coal are fought for at the highest levels.
The Obama-era Clean Energy Plan, considered by many to be the US’s opportunity to lead the energy transition and address climate change, as set at the Paris Agreement, was controversially and hastily replaced by Donald Trump’s Affordable Clean Energy plan.
Some researchers say it will be too expensive to implement and warn that thousands are expected to die as a result of environmental pollution.
In spite of these challenges though, the US power grid has made significant progress in 2019.
In November 2018, the US Department of Energy (DoE) submitted its Smart Grid System report to Congress and noted the following:
“Although the adoption of smart grid technology is not occurring at the same rate across the country, as is appropriate based on local needs for advanced capabilities, one can envision a trend to a more integrated and distributed electric grid where large-scale DER integration will occur. Additionally, digital technologies will eventually lead to the formation of information networks that will promote the convergence of the electric grid with other infrastructures, such as buildings, transportation and telecommunications.”
Smart Energy International takes a deeper dive into the noteworthy events on the US smart grid that have helped push the US energy transition forward, and are setting the trend for the rest of the country.
Utilities across the United States took strides forward in energy storage as several states considered legislation permitting renewable energy facilities, particularly solar paired with energy storage, to be eligible for solar energy incentives, whilst also considering the revision of interconnection requirements, and evaluating energy storage options in integrated resource planning.
The Minnesota Legislature enacted a wide-reaching Energy Storage Bill in May 2019. The new bill directs the Commissioner of Commerce to contract an independent energy consultant to conduct a cost-benefit analysis and requires utilities in the State to assess energy storage in the integrated resource planning. Utility trialling of storage was also officially permitted for the first time.
Ohio’s Supreme Court knocked down the first attempt by a state utility to add an additional fee to fund its grid modernisation efforts. First Energy had introduced the additional cost in January 2017. None of the nearly $600 million already collected will be refunded however.
The US capital’s Modernising the Distribution Energy Delivery System (MEDSIS) programme filed their final recommendations with the Public Service Commission in late May, providing recommendations on data access, rate design, customer impact, microgrids, non-wires alternatives and pilot programmes.
Puerto Rico Electric Power Authority (PREPA) released an integrated resource plan, calling for 1.38GW of solar, and 920MW of storage by 2022. Also noteworthy was the plan’s suggestion to divide the island state’s grid into eight, islanded mini-grids, each also able to host smaller microgrids to support remote locations.
Storage has been a strong area of focus throughout 2019, with the proposals shown in Figure 1 filed in the first quarter.
May was also a great month for utilities looking to modernise rate offerings in Nevada as legislators ordered the Public Utilities Commission to adopt procedures to allow energy companies to apply for at least one alternative rate structure for offerings such as performance-based rates, subscription pricing, decoupling mechanisms, and earnings sharing-mechanisms.
Overall, the most active states in Q2 include New York, California and Massachusetts, with 44 states participating in grid modernisation efforts.
In August 2019, Maryland’s Public Service Commission issued an order for the establishment of a working group which will develop an implementation report on multiyear rate plans. Thereafter, it will investigate performance-based regulation issues.
Quarter 3 also brought submissions for two revised grid modernisation plans by Duke Energy Carolinas for North Carolina, and Dominion Energy in Virginia after initial submissions were rejected.
Duke Energy Indiana filed a proposal for new rates for critical-peak pricing, whilst Illinois regulators approved Con Edison’s three-part time-of-use pilot including super peak, peak, and off-peak periods. Additionally, July 2019 saw North Carolina regulators approve Duke Energy’s dynamic pricing pilots as well as the utility’s Smart Meter App pilot, allowing residential consumers to monitor home energy usage.
The Massachusetts Department of Public Utilities (DPU) made a controversial decision in September 2019, rejecting National Grid’s general rate application which proposed four performance incentive mechanisms based on peak reduction, electric vehicle (EV) adoption, EV supply equipment cost containment, and customer ease. In spite of this, the utility’s proposed scorecard metrics were approved, laying the groundwork for a fresh application.
The California Public Utilities Commission opened a new rule making to remove obstacles to reducing barriers to microgrid development, following legislative progress in 2018. The state commission is to develop guidelines, protocols, rates and tariffs to support microgrid development, with the rules expected to be established by December 2019.
In late September, North Carolina’s Department of Environmental Quality released its final Clean Energy Plan, which focusses on six strategic areas – utility incentives and planning; clean energy deployment and economic development; carbon reduction; a just energy transition with equitable access; and grid modernisation and resilience; with policy suggestions to support these developments.
Despite modernisation slowing over the quarter, efforts in Q3 2019 outpaced 2018’s results for the same period, with utilities proposing pilots of new rate designs, including time-varying rates, peak time rebates, critical peak incentives, and rebates.
Hawaii’s HECO filed an Advanced Rate Design Strategy following a directive from the Utilities Commission, which includes critical peak incentivisation, EV rates, and time varying rates.
July also saw New Hampshire lawmakers form a state-wide online energy data platform, to be administered by the Public Utilities Commission. In Hawaii, HECO customers with smart meters will have access to a data portal, allowing secure, multi-device access to consumption data.
2020 and beyond – tracking to sustainability
In case you were wondering, installed renewable energy in the US is expected to double current capacity to as much as 443GW within the next decade, according to a recent study by research company Global Data, thanks in large part to progressing, (and increasingly progressive) renewable energy regulations and policies.
Furthermore, coal-based capacity is forecast to decline by almost half – dropping from 27.2% to just 13.5% by 2030, as renewable energy, storage capacity, and stable, gas-based generation move from pilots to full-scale rollouts. As a final motivation forecast emissions taxes are set to make modernisation a wiser option still, and given the falling prices of renewables like wind and solar, the way looks clearer than ever before to a sustainable energy future.
Anticipated emission taxes are also expected to push up the price of fossil-fuel generation, thus making it a less attractive option when compared to the falling prices of renewable energy.
Global Data’s latest report, US Power Market Outlook to 2030, Update 2019 – Market Trends, Regulations and Competitive Landscape found that US energy utilities are keen on switching to renewables so as to comply with state-level renewable energy targets.
Global Data power industry analyst Arkapal Sil said: “During 2019-2030, offshore wind capacity is set to see the largest growth rate among renewables, reaching 11.7GW from 60MW at a 62% CAGR, while solar photovoltaic capacity is expected to reach 220GW from 75.3GW, growing at a 10% CAGR.”
At DISTRIBUTECH you have eleven hand-selected, timely and relevant tracks designed to keep your experience organised and productive. We understand you don’t want to leave a single stone unturned. Smart grids, DER and storage are all covered.
Don’t miss the When Utilities and Telcos Get Together? mega session on Wednesday 29 January 2020