DERs and the digital grid: No more pilots; full scaling ahead

Jeremy Rifkin does not do incremental. When it comes to building a clean, modern, renewable energy system — and combating climate change — the author and futurist says, the traditional route of rolling out new technologies and business models via pilot programs is too slow and siloed.

“In 25 to 30 years, everyone will be plugged into digitized renewable energy systems,” Rifkin said in his opening keynote to the Smart Electric Power Alliance’s (SEPA) recent Grid Evolution Summit in Washington, D.C. “How you scale depends on the existing architecture of the system.”

Drawing from his most recent book, “The Zero Marginal Cost Society,” Rifkin envisioned the Internet of Things enabling the convergence of energy, communications and transportation. Distributed renewable energy generation and sophisticated demand response systems will rapidly evolve from the margins to dominate the grid, he said. Utilities will still play a key role, but primarily as distribution system operators rather than electron producers, he said.

Scaling this new paradigm will be driven by what Rifkin calls “glocalization,” using broad and deep engagement of stakeholders on a regional basis — reaching beyond traditional industry players — to create fast-ramping roadmaps for change.

“Democratize the experience,” he said, suggesting that utilities think of this expanded set of stakeholders as “architects” and themselves as “contractors” who will execute the vision.

While the utility and clean technology leaders at the summit might differ on the specifics of Rifkin’s vision, the challenges of scaling distributed energy resources (DERs) — solar, storage, demand response and electric vehicles (EVs) — provided a point of shared, intensive focus.

Decarbonization, decentralization and digitization were common themes, with summit sessions ranging from best practices for DER interconnection, to strategies and new rate designs for EV roll-out, to the uncertainties of grid planning amid ever-evolving technology.

Speaking at a workshop on interconnection, Howard Smith, Manager of Distributed Energy Resource Policy at Southern Company, said that utilities must switch their mindsets, from selling kilowatt-hours to providing energy products and services.

Jon Pettit, Manager of Advanced Metering Systems at Oncor Electric Delivery in Texas, sees a similar transition at his transmission and distribution (T&D) utility. “We’re not (only) a T&D company, we’re a data company too,” he said, during a round table on emerging technologies. “This is the transition we all need to go through.”

At the same time, formulating regional roadmaps also requires a recognition of regional differences — and political realities, said Asim Haque, Chairman of the Public Utility Commission of Ohio. Haque is spearheading grid modernization efforts in his state, where, he said, decarbonizing the power system isn’t a realistic goal politically.

Instead, “providing value-added consumer services is our aspirational selling point,” he said.

Flying with the plane on fire

The destruction of Puerto Rico’s energy system last year by Hurricane Maria has created the opportunity for just the kind of fast scale-up and deep stakeholder involvement Rifkin proposes.

A roundtable discussion featuring officials and experts involved in rebuilding the system noted that the issue is not developing a shared vision for a sustainable, clean, modern system — that exists, said Nisha Desai, a board member for the Puerto Rico Electric Power Authority (PREPA).

“The hard part is figuring out how we get an execution strategy and plan in place to move toward this vision over time,” Desai said.

“We are building the aircraft while we’re flying it, and the aircraft is on fire and has no landing gear,” said Noel Zamot, Revitalization Coordinator for the Financial Oversight and Management Board for Puerto Rico. “What I’m seeing in the industry is that there is a lot of intellectual capital, a lot of solutions ready to be deployed. There may be solutions that are feasible technically, but not regulatorily.”

Christian Sobrino Vega, a chief advisor to Puerto Rico Governor Ricardo Rosselló, said PREPA’s pending privatization will help change the focus to the customer by bringing in new thinking and leadership. The recently passed law is actually something of a hybrid, providing for privatization of electricity generation, but allowing ongoing ownership of the grid by the commonwealth.

For 70 years, Vega said, Puerto Rico’s “energy policy all focused on PREPA, not on how do you have energy in your house or business.” A new vision “requires using tools that the PREPA-centric system did not allow,” he said.

“We’ve been seeing the customer as someone who has to be protected — but they need to be actors,” said Jose Roman Morales, former president of the Puerto Rico Energy Commission. “The first step is to empower them.”

He pointed to Puerto Rico’s recently approved regulations on microgrid development — the first of their kind in the U.S. — as an example of developing policy from the bottom up with extensive public input. Asking open-ended questions is critical, he said.

“How do you want (this technology) developed? What kind of participation from the commission? You have to work on the process and be open to having a lot of people (involved), understanding what customers want,” Roman Morales said.

But the group also cautioned that coming up with capital to invest in a truly state-of-the-art grid, as well as the high-paying jobs needed to maintain and manage it, could be challenging given Puerto Rico’s other pressing needs, including immediate infrastructure recovery and $9 billion in debt. The sudden resignation of PREPA CEO Walter Higgins is another bump in the shifting
energy landscape of the island.

Flexibility will be essential. Desai said what’s needed is a “healthy tension between what one is hearing from customers, with what are the fundamental policy attributes we need to worry about — universal service, affordability. We need both to come together.”

Colorado Collaboration

Alice Jackson, President of Xcel Energy – Colorado, offered another example of the type of collaborative discussions that Rifkin urged on the industry — and the scaling of clean technology that can happen as result. Jackson — winner of SEPA’s 2018 Power Player of the Year Award — described how Xcel got 26 intervening parties to spend the summer of 2016 negotiating a “global settlement” to several interlinked regulatory filings related to solar market growth in the state.

A bruising, 18-month debate on net metering in the state formed the background and impetus for the negotiations, Jackson recalled.

“We felt we had to have all viewpoints in the room. But people were mad,” she said. “There was so much emotion, because we hadn’t been having the right conversation. First, we had to get to know each other. Why do you care about this point? Why are you so emotional about this?”

Weeks of discussion — with long hours and at times with more than 60 individuals in the room — led to better understanding, which in turn helped create consensus for a detailed, carefully crafted road map forward.

“Every single sentence in this settlement means something,” Jackson said, quoting the remarks of a state regulator.

The settlement enabled the approval of the Colorado’s 2017 Renewable Energy Plan and related filings that give customers more control over energy choices and bring more renewable and carbon-free energy to Colorado, including expansion of DER capabilities.

Last year, the agreements bore tangible results when Xcel announced it could successfully close two coal units in the next decade while adding renewable production — without additional costs to customers.

“We will be at 55% renewables by 2026 and reduce carbon emissions by more than 59% from 2005 levels while saving customers money,” Jackson said. “But we had to forge the path. We couldn’t have done it if we hadn’t taken the steps we took in 2016. No matter which side you sit on — customer, utility, technology developer — you have to understand perspectives and take the time to have the conversation.”

Working back to technology

During his keynote, Jeremy Rifkin pointed to another aspect of scaling renewables and a digitized grid — the opportunity it presents for developing countries to leapfrog building centralized energy systems and move directly to distributed generation. Today small, local microgrids and off-grid solar are being used to bring electricity to remote communities.

While Rifkin was referring to Africa and South America, that same challenge remains in the United States, said Walter Haase, General Manager of the Navajo Tribal Utility Authority. Accepting the SEPA Power Player Award as Visionary of the Year, Haase spoke of how his utility is leveraging solar development as an economic engine for bringing electricity to the 15,000 households — over 60,000 people– still living without power in its service territory.

In the 21st century in the U.S., that situation is just not right, he said.

Haase’s words provide a sobering takeaway for the summit. No matter the frame of reference, scaling, in the end, means providing a vital and timely connection between technology, customers and the well being of the community.

“There’s a quote by Steve Jobs that says, start with the customer and work your way back to the technology,” said William Ellis, Performance Assessment Manager at Exelon Utilities. “In the utility business, we tend to start with the grid — and that causes a lot of extra steps that don’t help the customer. At the end of the day, it has to work for the customer and the grid.”

Nick Lanyi is a writer and consultant based in Washington, D.C. Email him at [email protected].