Massachusetts is close to implementing a clean peak standard that could bring wider opportunities for microgrid developers. It would also make Massachusetts the first state in the nation to implement the standard.
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Based on the premise that renewable energy is good for the environment, but even better if used at the right time, the clean peak standard (CPS) attempts to incentivize clean energy technologies that serve the peak.
It does so by sending a market signal to deliver clean energy when electricity use is highest on the grid, such as extremely hot or cold days.
The program also provides incentives for reducing demand when electricity use peaks on the grid. So for microgrids that provide demand response, the clean peak standard creates a new source of revenue.
Backers of the standard see it as necessary because if clean resources don’t serve the grid during these high demand periods, it’s likely that fossil fuel generation will, which can increase emissions and costs.
Massachusetts issued a straw proposal for the clean energy standard in April, and early in August released its draft rules. Under the current timeframe, the state Department of Energy Resources (DOER) expects to finalize the regulations in first-quarter 2020.
History of the clean peak standard
The clean peak standard concept first gained public attention in 2016 when the Arizona Corporation Commission released a paper, “Evolving the RPS: A Clean Peak Standard for a Smarter Renewable Future,” written by Edward Burgess and Lon Huber at Strategen Consulting.
The basic idea was that renewable portfolio standards (RPS) — requirements by states that a certain amount of energy come from renewables — bolsters clean energy development, but it’s not necessarily designed for use when the grid needs it most. This leads to challenges such as California’s “duck curve” that occurs when solar generation quickly drops off and has to be augmented with peaking plants, often run on fossil fuels.
Strategen proposed building on the traditional RPS framework by adding components, namely that a certain percent of energy delivered to customers during peak load hours must come from clean energy sources. For instance, a 30% standard would mean that 30% of megawatt-hours delivered to customers during a predetermined peak period must come from clean energy.Massachusetts Close to Finalizing a Clean Peak Standard; Good News for Microgrids
Massachusetts enacted its clean peak standard in August 2018 with An Act to Advance Clean Energy. Other states also are pursuing the concept. Arizona regulators are in the early stages of creating rules.
California has put into place a law, but it “has no teeth,” said Huber, who is now a director at Navigant. Illinois and New Jersey are considering clean peak standards, and New York’s energy storage roadmap includes provisions for clean peak actions that provides compensation for carbon dioxide reduction that varies with time.
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How it works in Massachusetts
Without the standard, Massachusetts would remain “dependent on gas and oil generation to meet our peak demand, resulting in high costs and emissions, despite our substantial investment in clean energy resources,” says the DOER in a presentation describing the program.
Under the law, the DOER sets a baseline minimum of retail electricity sales that are supplied by clean generation or load reduction during seasonal peak periods. The law defines clean peak resources as demand response resources and qualified renewable and energy storage resources that are in service by Jan. 1, 2019.
Microgrids or others would create the clean peak energy certificates by reducing demand on the grid or supplying clean energy at specified times. Utilities and other retail electric suppliers would purchase the certificates to fulfill the mandate set by the state law.
Microgrids can help reduce peak demand on the grid, which usually occurs on hot summer days. Image by Marian Weyo/Shutterstock.com
Only certain technologies qualify to generate the certificates: new renewable resources, existing renewables paired with new energy storage, new energy storage that charges primarily from renewables, and demand response resources.
For the purposes of the clean peak standard program, the DOER defines four seasonal peak periods: spring (March 1 – May 14), summer (May 15 – Sept. 14), fall (Sept. 15 – Nov. 30), and winter (Dec. 1 – Feb. 28). By law, the seasonal peak periods must be at least one hour and no more than four hours each weekday, excluding holidays, and they are set for each of the clean peak seasons.
The DOER also proposes the use of multipliers to align the generation of clean peak energy certificates with the times when the qualified resources would have the most impact.
Multipliers adjust the number of certificates a resource would receive for each MWh generated during times of peak demand. They include a seasonal multiplier – 3X for summer and winter and 1X for spring and fall – a 15X multiplier for the highest actual monthly peak, a resilience multiplier of 1.5X for resources that increase energy resilience to outages, and application of the existing state contracted resource multiplier of 0.1X.
What do the draft regulations mean for microgrid developer?
“If a microgrid uses CPS eligible technology, they can participate in the program,” Huber said. For example, in DOER’s draft rules microgrids would fit under the heading of demand response. “If the microgrid responds to peak and scarcity events, then they will get large CPS multipliers,” Huber said.
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Regulators ask Hawaiian Electric to Explain Lack of Non-Wires Alternatives in Plan
The Public Utilities Commission of Hawaii is pushing back against Hawaiian Electric Companies (HECO) proposed integrated grid plan (IGP) because it has not given sufficient consideration to non-wires alternatives.
By Igor Klyakhin/Shutterstock.com
HECO may be prematurely excluding non-wires alternatives and “significantly” delaying the proposed soft launch of its IGP, the commissioners told the utility in an Aug. 5 letter (Docket No. 2018-0165).
The commission takes issue with the utility’s plan to build a new substation to solve reliability problems at the Ho’opili housing development. HECO appears to be delaying consideration of non-wires alternatives for the site until 2025. That approach “may be inconsistent with prior commission guidance,” the commissioners wrote in the letter.
The commissioners referenced, in particular, controversy surrounding an earlier substation project, the $8.8 million Ka’aahi substation. HECO “may intend to again implement a traditional wires solution without a complete consideration of potential alternatives,” the commissioners wrote.
Evolution of grid plan
The utility has been working for two years on the IGP, a plan that came out of the commission’s displeasure with the utility’s previous power supply improvement plans. In the wake of the criticism, HECO adopted a new approach, one that takes distributed resources into greater consideration, as well as competitive solicitations to determine market prices and evaluate different classes of resources against each other. The plan also envisions a speedier process, 18 months for the IGP versus 30 months for the more traditional planning process.
Now the commission is concerned that HECO is reversing course.
The soft launch of the utility’s IGP was envisioned as “an opportunity to identify and test alternative sourcing methods for use during the IGP process,” the commissioners wrote. But, they said, HECO seems to have “concluded that a traditional solution is necessary without the opportunity for market providers to offer an alternative solution.”
In the letter, the commissioners told the utility they would like “to better understand the rationale for these decisions to determine if a course correction is necessary.”
The commissioners requested that the utility engage in further review and discussions on the timing and proposed scope of the soft launch RFP for the IGP.
Seeks solar power
In one of its planned RFPs, HECO is seeking technologies equivalent to 594 MW of solar power for Oahu; 135 MW for Maui, and 32 MW to 203 MW for Hawaii Island. All would begin service in 2022.
Those resources would replace the planned closure or a coal plant on Oahu and the retirement of Maui’s oldest oil-fired plant in the next five years.
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New Jersey Prepares for Second Round of Microgrid Funding
New Jersey expects to begin accepting applications in November for its second round of microgrid funding, part of a program that already has 13 towns studying the feasibility of microgrids.
As a precursor, the New Jersey Board of Public Utilities plans to seek comments next month on a draft proposal for the second round of the New Jersey Township Microgrid Program. The “straw proposal” is designed to generate discussion and lead to the development of a “more informed” proposal, said Peter Peretzman, public information officer for the New Jersey Board of Public Utilities.
The board isn’t expected to make a funding decision before the end of 2019, he said.
Investigating microgrid funding from the DOE
Right now, the state clean energy budget includes $4 million for the microgrid program. “Separately, board staff is working under a grant from the US Department of Energy to develop a funding mechanism for the development and construction of microgrids,” he said.
The funding mechanism is still under development and the federal grant is separate from the $4 million in the clean energy budget
There is no way of knowing how many projects will receive the microgrid funding, he said.
Feasability studies for 13 New Jersey town microgrids propose a range of distributed energy resources, hailing microgrids as the solution to the outages, flooding, sewage overflows, river pollution and other challenges that the towns experienced during Superstorm Sandy.
“The perfect energy resilient infrastructure option that should be considered in Atlantic City is the development of a microgrid,” said Atlantic City’s study.
Miicrogrid challenges in New Jersey
In addition to focusing on the benefits of installing microgrids, some of the feasibility studies identified challenges to implementing the projects.
For example, the city of Hoboken said that New Jersey’s franchise right restrictions limit the ability of non-utility entities to produce and distribute energy to non-contiguous properties. The city hired the Environmental Defense Fund to study these limits, and found uncertainties about a town’s authority to operate microgrids.
“It was recommended that microgrid development be pursued with the collaboration of both Public Service Electric and Gas, as well as the Board of Public Utilities,” said the study.
Hoboken proposed two microgrids for separate locations. The first is a $30.5 million facility that would generate 7.4 MW of distributed energy resources , including natural gas and diesel reciprocating engines, combined heat and power (CHP), and solar-plus-batteries. The second microgrid would cost $11.5 million and generate 1 MW of distributed energy resources, including natural gas reciprocating engines.
Like Hoboken, Atlantic City identified public policy challenges. Its report looked at two public policy options that would overcome obstacles to distributing power from the city’s proposed microgrid.
Create private wire network?
One option is a retail “bypass” that would create a private wire network in Atlantic City. This would require changes to existing New Jersey laws as well as enabling legislation. Or as an alternative the microgrid developer could partner with Atlantic City Electric. The microgrid would rely on the utility’s distribution network, modified to create islanding during weather and other emergency circumstances, the study said.
Atlantic City proposed retrofitting the Midtown Thermal Control Center (MTCC), which provides heating, cooling and emergency power to casinos and other facilities in the city. The study examined aggregating MTCC’s customers’ electric and thermal loads to establish a platform for implementing a microgrid. It proposed a 14-MW CHP plant, plus natural gas engines, which together would create a 19.3-MW microgrid.
“The perfect energy resilient infrastructure option that should be considered in Atlantic City is the development of a microgrid,” said Atlantic City’s study. Photo of Atlantic City by Creative Family/Shutterstock.com
The city of Hoboken, which is one square mile, with 55,000 residents, described the effects of Superstorm Sandy.
“During heavy rain events the city’s combined sewer overflow system becomes overwhelmed resulting in shallow urban ponding and wet weather discharges of sewerage to the Hudson River,” said the study. “On October 29, 2012 Superstorm Sandy exposed many….vulnerabilities. The storm produced less than an inch of rain in the city; however, the 13- foot storm surge from the Hudson River resulted in 8 feet of flooding. Damages were estimated in the billions.”
The city of Camden proposed a “sustainability loop” that would transmit green energy from Covanta to the Camden County Municipal Utilities Authority (CCMUA) wastewater treatment plant.
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“The Sustainability Loop is designed to have the CCMUA send Covanta its treated effluent to use as cooling water for Covanta’s waste‐to‐steam plant… With the completion of this project, the CCMUA would be 100% off the grid and 100% resilient in the face of power outages. The goal is to power the CCMUA with sludge, waste and the sun,” the study said.
Hudson County proposed an array of seven 200-kW microturbine generators producing electricity and steam. The turbine generators would produce enough power to meet the needs of the facilities connected to it, with waste heat generating steam for distribution through the campus network. The county said it selected the turbines because “the technology is robust, reliable, efficient and achieves one of the highest availability targets compared to other available technologies.”
In addition to the microturbine generators, the study recommended solar PV.
Information about the 13 microgrid projects is available here.
In its plan, Atlantic City summarized the benefits of a microgrid.
“The proposed Atlantic City Microgrid delivers comprehensive societal benefits associated with energy efficiency gains, reduced environmental impacts as well as establishing the provision of resilient emergency medical and public shelter facilities.”
If utilities, customers and government agencies are willing to work together on the project, the study said, “There is no better circumstance that presents the close geographic nexus of medical and public sheltering facilities, available generation assets, and customers excited about a microgrid initiative, anywhere else in the state of New Jersey.”