Category Archives: Demand Response

Utility 2.0: What are Utilities Doing to Meet New York’s Vision for a 21st Century Energy System?

nyc skylineSince the New York Public Service Commission (Commission) opened its Reforming the Energy Vision (REV) proceeding in the spring to modernize the state’s electricity system, a lot has happened. Namely, New York utilities are already working to align themselves with the broad objectives outlined in the REV proceeding. Here is an overview of efforts by the state’s big players:

CON EDISON – Brooklyn/Queens Demand Management Program

Growth in electricity demand in parts of Brooklyn and Queens is taxing infrastructure and will require action from Con Edison to ensure reliability. Con Edison could pursue a costly $1 billion substation upgrade to meet this rising demand. Instead, the utility is slashing needed investment by half and plans to invest around $500 million – $305 million in traditional utility investments and $200 million clean energy resources – to address the area’s growing energy needs as part of its Brooklyn/Queens Demand Management program. Measures include:

  • Demand Response (a tool that pays customers to conserve energy when the electric grid is stressed): A new demand response system from energy services provider Alstom, which would allow 3.3 million customers to be compensated for the value they provide to the grid.
  • Energy Storage: Battery-based energy storage for electricity produced when electricity demand is low (off-peak hours) for use when demand is high (peak periods), easing the burden on the electric grid at those times.
  • Microgrids (which generate electricity nearby or on-site where it’s consumed): The development of microgrids to improve resiliency and enable the aforementioned demand response system.
  • Electric Grid Resilience and Optimization: Expanded use of smart meters, which provide detailed electricity use data throughout the day, will improve response time to power outages and give customers more control over their energy usage.

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New Development in Demand Response Ruling Signals Possible Supreme Court Review

supreme-court-545534_640Late last week, the Solicitor General signaled its intention to file cert. before the Supreme Court in the demand response Order 745 case, EPSA v. FERC. Hidden within this legalese is an important update about a significant (and already complex) case.

So what does it all mean?

First, a bit of background

Demand response pays customers to conserve energy when the electric grid is stressed. With demand response, people and technology, not power plants, help meet energy demand. This is good news for customers, who pay less for electricity, the environment, via reductions in harmful air emissions, and the electric grid, by making it more efficient.

The Federal Energy Regulatory Commission (FERC), tasked with ensuring our nation’s wholesale electricity rates are ‘just and reasonable,’ created Order 745 to ensure that those providing demand response as a service would be adequately compensated. Read More »

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Utility 2.0: New York Draws Lessons on Utility Regulation from Across the Pond

By: Gavin Purchas, Acting Director, Idea Bank, and Elizabeth B. Stein, Attorney

parliament-544751_1280When the New York Public Service Commission (Commission) opened its historic “Reforming the Energy Vision” (REV) proceeding earlier this year, it recognized that the way utility companies have been regulated is out of sync with innovations in technology, business realities, and evolving customer needs,  including the need to reduce harmful pollution. In order for utility companies to become part of the solution, the Commission has made it clear that everything is up for grabs – even the basic regulatory paradigm governing how utility companies do business in New York.

Luckily, the Commission won’t have to completely reinvent the wheel since a new regulatory paradigm from the United Kingdom could serve as a potential model. This regulatory approach is known as RIIO and is based on the following formulation: Revenues = Incentives + Innovation + Outputs. RIIO was developed by the UK regulatory body, Office of Gas and Electricity Markets, after the country recognized that its previous framework – while extremely effective at achieving cost reductions – stymied innovation. RIIO includes several elements that may be useful in the New York setting, including: Read More »

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So, how do we Make Sustainability… Sustainable?

alternative-21761_640Last week the New York Times reported that, for the first time in history, clean energy resources like solar and wind are becoming cost competitive with conventional coal in some markets. This paradigm shift, where clean energy is beginning to compete head-to-head with traditional energy sources, calls for a change in perspective.

This ‘change in perspective’ is a movement toward what I would describe as “sustainable sustainability” – in which “sustainable” means the ability to stand the test of time, and “sustainability” refers to an environmentally responsible approach to making, moving, and using energy. In other words, we must find a way to ensure clean energy resources remain competitive in the marketplace and become ‘business as usual’ resources in the overall energy mix. The International Energy Agency (IEA) does a great job of explaining the need for this shift:

In the classical approach, variable renewables are added to an existing system without considering all available options for adapting it as a whole. This approach misses the point. Integration is not simply about adding wind and solar on top of ‘business as usual’. We need to transform the system as a whole to do this cost-effectively.”

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Germany’s Energiewende is Shifting the Energy Paradigm – Now it’s Time to Optimize

solar-cells-491701_640Revolutionary paradigm shifts often require cohesive development of many moving parts, some of which advance more quickly than others in practice. Germany’s revolutionary Energiewende (or “energy transition”) is no exception. Set to achieve nearly 100 percent renewable energy by 2050, Germany’s Energiewende is one of the most aggressive clean energy declarations in the world. While growth of Germany’s installed renewables capacity has been explosive in recent years, optimization measures designed for Energiewende have manifested at a relatively slow pace.

Germany already has one of the most reliable electric grids in the world, but as implementation of Energiewende continues, optimization will be key to its future success. This will require better sources of backup generation to accommodate the intermittency of wind and solar, a dynamic energy market that ensures fair compensation for this backup, and a more flexible, resilient grid enabled by smart grid technologies to fully optimize demand side resources and a growing renewable energy portfolio. Read More »

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Schooling Demand Response in Texas Academia

By: Corina Solis, graduate of Yale University’s School of Forestry and Environmental Studies

2014-training-yale-cropThe Alamo Colleges began participating in local utility company, CPS Energy’s Demand Response Program in the summer of 2013. This Demand Response Program is one of CPS Energy’s strategies to achieve its 2020 goal of saving 771 megawatts of energy. The Alamo Colleges participated in the program in order to take advantage of a significant rebate opportunity, which was a maximum of $120,600 in 2013 and is $130,650 in 2014. Rebates are based on the level of participation, and in 2013, the Alamo Colleges earned rebates totaling $103,000. Through a self-funding strategy, all of this money went back to the Alamo Colleges to pay for faculty and staff salaries.

As an extra benefit, while saving all of this money, the Alamo Colleges trim their carbon footprint each time they participate in demand response. Last year, the Alamo Colleges prevented 2,250 lbs. of CO2 from going into the atmosphere from its demand response participation. This year, the Alamo Colleges are contracted to prevent up to five and a half tons of CO2 from escaping into the atmosphere, which would otherwise take 140 tree seedlings ten years to naturally take out of the atmosphere. Read More »

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