Monthly Archives: July 2012

Envision Charlotte Meets Pecan Street

Last week, I, along with several other Envision Charlotte Board Members travelled to visit the Pecan Street smart grid project in Austin, Texas.   We hope this will be the start of a recurring “exchange program” between the two cities for sharing of information and best practices related to smart grid deployment.  There are significant differences between the two projects.  Pecan Street is focused on the residential sector; Envision Charlotte on commercial office buildings.  Envision Charlotte is deploying innovative behavior change, social networking and employee training to reduce energy use, while Pecan Street is heavily focused on technology solutions. 

But, there is also a lot in common.  Both organizations desire to reduce energy use and find alternatives to our outdated energy system.  Both believe that smart grids and energy efficiency can be cost effective and drive economic development.  Finally, both groups are rigorously measuring the impacts of their actions. 

What we saw in Austin was very cool.  We started by visiting a home in the Mueller neighborhood, a playground for testing the latest in home energy management and appliances.  In one house’s garage was a wireless energy monitor that connects to the home’s circuit breaker box and allows homeowners to view real time energy use from different appliances and lighting systems in the home.  Residents now know exactly how much it is costing them to make coffee each morning – or power up their flat screen TV. 

Also in the garage was a Chevy Volt, along with four charging stations from different manufacturers (according to Pecan Street staff, they all perform roughly the same).  Up on the roof was a series of solar panels, whose every watt is being recorded to learn important things about installation location, potential for offsetting peak generation, and storage solutions.  Although each of these technologies are impressive on their own, only when operating together do they represent the next generation of home energy management where consumers have complete knowledge and control over their energy choices.  It’s pretty empowering.

This innovative project didn’t happen accidentally.  It came about through lots of perspiration from their Executive Director and former Austin Council Member Brewster McCracken; design recommendations from hundreds of folks in the private sector, local community and NGOs (including EDF); prodigious fundraising; and hard work from staff, board members, and participating companies.  Some of my key takeaways from the trip are as follows:

Residential Technology Still a Wild West – Unlike the commercial building automation universe, where users have more experience integrating energy management and building systems to speak the same code and talk to one another, residential systems are still in their infancy and competing languages make it extremely difficult to get different pieces of hardware to talk to one another.  Pecan Street will often need to write new code or develop other workarounds to get vendor equipment to work as described.  This is one of the reasons why EDF has joined the OPEN network, to help ensure that smart grid investments in different states maximize interoperability.

The Incredible Power of Data – Pecan Street collects a data point from each home circuit every 15 seconds.  With dozens of circuits per home and hundreds of participating homes in the Mueller development, the Pecan Street project has rapidly approached billions of discrete pieces of data that can be captured, sorted and analyzed.  Although a challenge to work with data sets this large, once properly harnessed, they provide incredible insights to consumers, utilities, researchers and policymakers on energy use.  Pecan Street can see exactly what happens to the grid when someone opens their refrigerator or micro-waves dinner, and use that information to develop strategies for homeowners that will reduce energy use and improve reliability.   

Test Technology, Scale, Inform Policy – Pecan Street is unique in its approach in several ways, but one of the most significant is that it enables a technology to policy pathway.  Pecan Street’s test labs experiment with the latest in home energy management technologies, present those solutions to homeowners in the Mueller neighborhood for adoption and enable EDF to identify regulatory or policy mechanisms that can further accelerate smart grid investment.  As an example, last year EDF was able to help secure provisions in a Texas energy bill that enable demand response programs and payments for utility customers.  This technology to policy approach is something that Envision Charlotte will need to reach our ambitious 5-year, 20% energy reduction goal.

All in all, it was an incredible trip.  Over the coming years, as Envision Charlotte develops more programs and scales its impact, we hope to repay the warm hospitality of Pecan Street by hosting their team in Charlotte and sharing what we have learned.  We’ll promise good conversation, great BBQ and a continued devotion to collaboration.

Posted in Grid Modernization, North Carolina, Texas / Tagged , | Comments are closed

EDF Energy Innovation Series Feature #8: Clean Energy Options From NRG

Throughout 2012, EDF’s Energy Innovation Series will highlight more than 20 innovations across a broad range of energy categories, including smart grid and renewable energy technologies, energy efficiency financing, and progressive utilities, to name a few. This series will demonstrate that cost-effective, clean energy solutions are available now and imperative to lowering our dependence on fossil fuels.
Find more information on this featured innovation here.

Depending on whom you ask, utilities and independent power generators like NRG Energy (NRG) could be the savior or the victim of the country’s future energy system. The smart grid — an upgraded electrical system that connects generators, distribution systems, homes, offices and the millions of devices that use energy — could be real trouble for traditional utilities. If they don’t evolve, well, we know what happened to the dinosaurs.

And New Jersey-based NRG is making some impressive moves in an industry not known for rapid change.

Utilities have a lot to lose if they stand still and watch this wave of innovation pass them by.  But they also have a tremendous amount to contribute, and leveraging their expertise and capital could accelerate the innovation cycle and establish the generators and transmission and distribution companies as a critical piece of the electric grid of the future.

Source: Green Mountain Energy Company

In 2010, NRG acquired Green Mountain Energy Company (GME), a Texas-based business that has been providing clean energy to consumers and businesses since 1997, making it the longest serving retailer of its kind. It is still the only retail energy provider (REP) in Texas solely focused on cleaner energy. In many ways, GME can be considered a “founding father” for the renewable energy sector, owning many “firsts” in the REP market:

  • GME was Texas’ first REP to offer pollution-free products when electricity competition began in 2002.
  • GME developed Texas’ first pollution-free electricity product specifically for electric vehicle owners.
  • GME customer demand helped develop over 50 wind and solar renewable facilities in U.S., including the first utility-scale wind farm east of the Mississippi – a wind farm built in Pennsylvania in 1999.
  • GME created a program, the Green Mountain Energy Sun Club, that to date has built solar arrays to power 35 non-profit organizations including schools, museums, zoos and Habitat for Humanity homes. Each installation includes an educational component explaining the benefits of solar energy to the non-profits’ stakeholders.

GME also provides clean energy to some iconic American brands, further proving the viability of the renewable market while also leveraging visibility to encourage others to go green. Examples include the Super Bowl XLVI, Empire State Building (powered by 100 % wind energy) and Atlantic Cup (first carbon-neutral sailing race in the U.S.).

“With significant growth, customer commitment and a passion for clean energy, Green Mountain continues to accelerate a clean energy future,” said Helen Brauner, senior vice president of Marketing & Strategic Planning, Green Mountain. “Thanks to our customers who share in our mission to change the way power is made through customer choice, we’re celebrating 15 years of dedication to renewable energy this year.”

NRG is also the largest solar power developer in the country and is a leading owner and operator of photovoltaic (PV) systems at residential and commercial locations. Through the NRG Solar subsidiary, the Company is developing two complementary technologies — photovoltaics and solar thermal — at two of the world’s largest solar projects of each type: the 290 megawatt PV Agua Caliente Project in Arizona and the 392 megawatt Ivanpah Solar Electric Generating System in California. Upon completion in 2014, Agua Caliente will be the largest solar PV project in the world and will generate enough electricity to power more than 225,000 homes.

Additionally, the Company is building the nation’s first privately-funded, comprehensive electric vehicle (EV) charging infrastructure. The eVgoSM system integrates home EV charging docks with a network of fast-charging stations that can charge a vehicle with a 100 mile range in a half hour or less. eVgo gives EV owners range confidence as they leave home every day with a full charge and know they can charge their vehicles quickly and conveniently if they need additional range. Additionally, the eVgo set-rate charging plans reduce the upfront cost of EV ownership while giving price certainty to EV drivers for the cost of fueling their vehicles.

“Electric vehicles are beginning to make a meaningful entry into the transportation market,” said Arun Banskota, President of NRG EV Services, the operator of the eVgo network. “As the EV market grows, we need to ensure that customers have the needed charging infrastructure. Residential and workplace charging, backed up by public charging stations, are critical to encouraging greater EV adoption, and we want to provide this key piece of the new energy infrastructure to ensure car buyers can buy an EV with confidence.”

NRG’s clean energy investments cover a wide range of initiatives; it owns 450 megawatts of Texas wind power, supplying clean windpower to thousands of homes. Through its retail subsidiaries and NRG SunLease, the Company leases rooftop solar panels to commercial and residential customers to reduce their electricity costs. NRG has a partnership with the University of Delaware to develop eV2g, or electric vehicle to grid technology, that might someday pay EV drivers for plugging in their cars. NRG is also developing carbon capture technology at its Petra Nova subsidiary that could reduce carbon emissions from older coal plants in the future.

Posted in Energy Innovation, Utility Business Models / Read 2 Responses

Smart Meters Are Key To A Smart Grid

Cassandra Brunette is a research associate in EDF’s Office of Chief Scientist.

Source: PG&E

A well-designed smart grid is critical to the clean energy revolution we need – enabling significantly greater use of clean, renewable, domestic energy resources and improved air quality to protect the health of millions of Americans now harmed by dangerous air pollution.

Smart meters are a key component of the smart grid.  They unlock air quality, climate pollution and public health benefits by enabling two-way, real-time communication that gives households, small businesses, manufacturers and farmers (and the utilities that serve them) the information they need to cut energy use and electricity costs.  These devices help ensure that every day energy users reap the many benefits of the smart grid.

However, as a recent PBS NewsHour report explained, some activist groups and individuals in areas where smart meters have been deployed have expressed concerns over exposure to radio frequencies (RFs) resulting from the use  of this technology.  EDF supports further research and opt-out programs for those concerned.  But what is missing from the PBS report is a clear account of the current, available scientific evidence on smart meters and health.  EDF uses the best available science in all of its programs, and our smart grid initiative is no exception.

I am a member of EDF’s science team out of the San Francisco Bay Area and have dug deep into the peer-reviewed literature on health effects of smart meters, as well as independent assessments by agencies and industry groups and reports from government agencies.  Here is what we know:

Research shows that every day humans come into contact with RFs from a wide variety of sources, including – but not limited to – wireless or cellular phones, microwaves, wireless internet routers, hair dryers, baby monitors and wireless laptops.  Each has varying levels of exposure that depend on the technology and – importantly – on distance from the source.

One example in our daily lives is the use of a cell phone.  A study by the Electric Power Research Institute (EPRI) found that during a call, cell phones held at the ear generate exposure levels between 1000-5000 microwatts per square centimeter (µW/cm2).  In comparison, when transmitting, smart meters create exposure levels of approximately 8.8 µW/cm2.  And that’s if a person is standing right in front of the meter.  In homes and businesses, people are much farther away from their electric meter, so exposure levels are far lower.  This means that a cell phone call exposes a person to hundreds of times more RFs than a transmitting smart meter.  Moreover, smart meters only transmit signals roughly 2-5% of the day (approximately 30-70 minutes).

Source: CCST

The chart to the right (units in µW/cm2), from a report by the California Council on Science and Technology, puts smart meters in context with other RF emitting technologies.  Keep in mind that this chart compares smart meters at a hypothetical maximum exposure level with transmission occurring during 100% of the day.  Even at these hypothetical maximums, exposure from smart meters is significantly lower than other technologies already in use.

Assessments also show that impacts from RFs come in two forms, thermal (heat-related) and non-thermal.  The Federal Communications Commission (FCC) sets safety standards for thermal impacts.  Smart meter exposure levels fall well below the FCC’s limits for safety for thermal impacts.  As for non-thermal impacts, the cumulative impacts of low-dose, long-term exposure are uncertain.  To date, there is no scientific evidence of non-thermal impacts from smart meter RF emissions.  EDF supports continued research on any possible health impacts of all RF emitters, but given the current standard for thermal impacts and uncertainties of non-thermal impacts, there is no evidence that the public would benefit from additional standards.

EDF’s number one priority is environmental and public health safety.  We advocate for a “smart grid done right” to quote a message by EDF’s President Fred Krupp, and we are not alone in this effort.  Though the PBS NewsHour story references “environmentalists” broadly opposed to a smarter grid, EDF is one of many environmental organizations strongly advocating for grid modernization as the clear path to lessening our dependence on fossil fuels and moving us toward a clean, healthy, low-carbon energy system.  Our science team will continue thorough assessments of the best available science on this topic and our work with utilities, regulators and the smart grid industry to protect the environment and the health of customers.

For more information on the many benefits of the smart grid, please view EDF’s fact sheet here.

Posted in Grid Modernization / Tagged | Read 14 Responses

PUC Resource Adequacy Workshop on Friday, July 27

Source: Brattle Group. “ERCOT Investment Incentives and Resource Adequacy.” June 1, 2012

This Friday, the Public Utility Commission (PUC) will host a workshop to discuss the Brattle Group’s recommendations for Texas’ resource adequacy predicament and how to move towards sustained reliability. This workshop is timely, since the Texas energy crunch continues to be in the spotlight. Just last week, the New York Times reported that Texas ranks last in electrical reliability among all states in the U.S. Texas won’t stay open for business if that remains the case and year after year it seems our state energy policy is based on a hope and a prayer

Table 1 of the Brattle report outlines the five policy options to solve the long-term problems.

The report specifically states that “reliance on scarcity prices is unlikely to achieve current reliability objectives.” Therefore raising the price cap is, alone, not going to solve the problem. As mentioned at the Senate Business & Commerce committee earlier this month, this issue was plagued by accusations that the market was being manipulated because of violent price fluctuations on June 25 and 26. It turns out the market is not being manipulated, which is good, but that it is really just dysfunctional in design, which is not so good. Colin Meehan’s blog last week highlights this issue and makes the point that while the PUC is willing to potentially pass the costs of a price cap increase onto ratepayers, it should also consider demand-side resources suggested by Brattle which could positively affect ratepayers. For example, in the PJM market demand-side resources are allowed to participate in energy and capacity markets and over $20 million of the payments went to residential customers.

EDF submitted comments for this workshop and will be in attendance. Other public comments were made from a variety of stakeholder’s including demand response advocacy groups, cities, MOUs, and power companies.

EDF believes that “such reforms must include a substantially increased role for demand response (DR) and other demand-side resources in ERCOT’s markets; the report provides ample supporting evidence for this need. EDF requests detail on the level of DR needed to maintain reliability in each scenario [in chart above], what would be required in each scenario to attain those levels, as well as the role of other demand-side resources in meeting future resource needs.”

Posted in Demand Response, General, Texas / Comments are closed

The Texas Electric Market Isn’t Being Manipulated, It’s Just Built That Way (…And That’s Not A Good Thing)

Last week, the Independent Market Monitor for the Electric Reliability Council of Texas (ERCOT) released a report showing that the violent prices fluctuations of June 25 and 26 were not the result of market manipulation, as asserted by earlier reports.  Most have greeted this as welcome news, but the finding could spell rocky years ahead with wild swings in electric prices from day to day, which makes it difficult for investors, generators and most importantly customers to plan ahead.  To understand why, let’s back up a second and talk about what these findings mean.

Wild Mood Swings

If the market isn’t being manipulated, it is at least feeling a little bipolar: one hot summer day with high demand prices are up slightly but everything was working fine. The next day however, a 2 percent uptick in demand combined with an unexpected loss of 1.6 percent sent prices soaring.  The peak price on June 25 hit $438/ megawatt hour (MWh), but on June 26 prices maxed out at $3,000/MWh, meanwhile average prices skyrocketed to 640 percent above the average for the 25th. 

In a well functioning market these price swings wouldn’t be so dramatic and unpredictable, and those swings point to fundamental problems with the electric markets in Texas.  In extreme situations prices and profits may increase enough to support new investment but those extremes are so unpredictable that no power company can plan well for them, much less finance new investments.  As Brattle Group says in their report to ERCOT, “reliance on scarcity prices is unlikely to achieve ERCOT’s current reliability objectives.”  The solution?  Reduce our reliability standards or implement reforms that will lead to reliable electricity over the long term without the need for emergency regulatory intervention.

The reason for these swings is pretty simple, and outlined in the Brattle Report: the ERCOT supply curve does not efficiently reflect current or upcoming scarcity conditions in the market.  The supply curve is dominated by low price resources like wind, efficient natural gas power plants, along with nuclear power and some cheaper coal, all of which come in at or under about $30/MWh.  But as the chart shows, when you start getting near the 100 percent peak demand level there’s a sharp “hockey stick” curve upwards in price.  This means that when we’re in that high demand territory, a single power plant going offline or an unexpected spike in demand can send electric prices from $30/MWh to $3,000/MWh without warning, like we saw in late June.  Other regions have a more gradual supply curve of price increases during scarcity conditions, providing a kind of ‘warning’ to the market that the Brattle Report suggests as part of its suite of recommended market reforms.  That gradual curve is important because it allows demand-side resources to help stabilize prices and at the same time it provides potential investors with the kind of predictable certainty that allows them to consider investing in Texas.

Solving the Problem

As we said above scarcity pricing by itself, especially when it’s so dependent on weather extremes, is not enough to keep the lights on in Texas.  To do so, regulators and stakeholders will need to roll up their sleeves, put politics aside and find a solution that works for all Texans.  As a many have pointed out, the Public Utility Commission (PUC) made the decision to raise the offer cap without even a cursory analysis of the impact on ratepayers, an oversight that hopefully won’t happen again. 

If and when ratepayer impacts are taken into account, demand-side resources will be seen as playing a key role not only in maintaining reliability, but also in reducing the impact to ratepayers.  According to the Brattle Report we can reduce our peak demand needs 15 percent with such demand-side resources, with residential customers and small businesses making up 72 percent of the reduction during the hottest days of the year, but only if serious changes are made to the market.  In PJM (another grid operator) , where demand-side resources are allowed to participate in energy and capacity markets, participants have received over $174 million for over 10,000 MW of customer provided demand-side resources, over $20 million of the payments went to residential customers. In Texas, as we consider implementing new policies that improve reliability and provide stable predictable market signals it will be critical to include demand response, and to tap into growing residential and small business markets.

Posted in Demand Response, General, Texas / Read 2 Responses

ERCOT Protocols Debated In Business And Commerce Committee Hearing

On Tuesday, the Business and Commerce Committee in the Texas Senate held an interim charge hearing on the Electric Reliability Council of Texas (ERCOT) protocols, including a look at the impact on system reliability, a topic that EDF is following closely.  The charge as given directs the Texas Senate Business and Commerce Committee to:

Review current and pending ERCOT protocols as they apply to all generation technology, and identify those protocols that may provide operational, administrative, or competitive advantages to any specific generation by fuel type. Consider the impact any revisions to the protocols may have on grid reliability and electricity rates. Make recommendations for revisions or statutory changes to limit distortions in the Texas electrical market.”

Leaders from all parts of the Texas electric system discussed the process of creating protocols and concerns about the impact of protocols on system reliability: Public Utility Commission (PUC) Commissioner Ken Anderson gave an update on activities at PUC and ERCOT this year, many of which we’ve discussed previously.  Anderson was followed by a panel including ERCOT CEO Trip Doggett.

Mr. Doggett told lawmakers that the “electric supply will be tight this summer and warned that the agency will likely declare Energy Emergency Alerts asking consumers to cut back on use. ERCOT may also implement emergency procedures, including taking industrial users offline. But blackouts would happen only if there was an extraordinary drop in generation or the state experienced record high temperatures.”  Senator Leticia Van de Putte asked about the Brattle report’s suggestion of a capacity market that would allow demand response (DR) and whether the 13 percent reserve margin should be treated as a target or a minimum requirement. This was not fully addressed beyond saying the Brattle report will be discussed at a Commission workshop on July 27.

The Director of ERCOT’s Independent Market Monitor, Dan Jones, keeps an eye on the system to make sure the market is functioning efficiently and no one is exerting undue influence over the Texas market.  Concerns of market manipulation have been raised by outside observers and committee members were clearly concerned about those allegations, which Mr. Jones is in the process of studying.  Jones also discussed the Brattle report recommendations, including one to further increase price caps in ERCOT.  Senator Kirk Watson asked how the recent cap increase, approved by the PUC to encourage more generation, could affect volatility, another issue that will be addressed along at the upcoming PUC workshop.

John Fainter, representing the Association of Electric companies of Texas (AECT), an electric industry  group, stated that the industry “supports the flexibility in the process with the current protocols”  and that “we will continue to have emerging technologies and that demand management should be part of the solution.”

We agree that it is important for the protocol development process to remain flexible and stakeholder driven, but the problem lies in the inertia with which these new emerging technologies and demand resources are brought into the market. The current stakeholder process tends to favor the status quo and, if that process is not successful in implementing the desired solution, consider further action through other means.

According to Brattle, “competitive DR resources can reduce our peak demand needs by 15 percent, greatly improving system reliability and playing a critical role in addressing future resource adequacy concerns.”   Large commercial and industrial customers, who are already “quite engaged” in various DR programs, only represent 14 percent of the total DR potential in ERCOT.  In contrast, during the summer of 2011 residential and small commercial customers accounted for 72 percent of peak load and “currently provide little DR.”

While EDF did not testify at the hearing, we submitted written testimony. Despite the current flexibility, the mechanisms by which new demand side resources expand do not necessarily allow for all stakeholders to be evenly weighed and can stymie the flexibility needed.  Texas is currently among the lowest states in terms of load management, despite having the highest potential according to FERC and the Brattle Group.  As ERCOT works to address resource adequacy issues, and this committee considers whether some protocols provide operational or competitive advantages to any specific generation, we believe it is important to note that ERCOT protocols generally provide operational and competitive advantages to generation resources over most demand side resources.

Therefore, we advocate the following changes to ERCOT’s market structure, including protocol revisions as proposed by Brattle:

  1. Enabling DR to directly participate in energy markets so it can set prices directly;
  2. Enabling all emergency DR to set prices at their individual strike prices during reserve shortage conditions, as in PJM;
  3. The adoptions of  provisions by ERCOT that allow demand resources to submit other operational data in lieu of  telemetered data in order to substantially expand participation;  and
  4. If supply offers clear, they should be paid a market price, such as the economically efficient price as determined by ERCOT’s Demand Side Working Group.

As this committee, ERCOT, and the PUC consider resource adequacy and inequities within current protocols, EDF recommends paying special attention to expanding DR options for residential customers and small business.  The four-market structure changes recommended above are critical to those efforts, but more work is needed to ensure that as other changes begin to impact retail rates, customers have recourse through DR programs that compensate them based on a fair market price.

Posted in Demand Response, Texas / Comments are closed