The most common way that distributed energy occurs is for solar panels to be mounted on the rooftops of residential or commercial buildings, along with new and sophisticated meters, to measure, record, and direct the resulting electrical flows in real time.
For decades, energy flowed in one direction only — from the utility company to your house, and directly out of your bank account to the utility company. This makes for a very nice flowchart if you’re a utility company!
Now, with so-called Net-Metering the power produced by your rooftop solar array is distributed and sold to the electrical utility in real time, through the two-way (net-metering) electrical meter and the wires that carry electrical power from the street. With Net-Metering, electricity can flow in either direction, as required, and completely automatically.
While at one time doing this was considered a technological impossibility, nowadays this is one of the easier parts of the equation.
What could be easier you say, than having a company install solar panels and a net metering system at your home and then sitting back to enjoy dramatically lower energy bills?
In some jurisdictions, that is exactly what is happening. Homeowners with sufficiently large rooftop space are producing more energy than they use per year and many are receiving $2000. cheques every January — for the difference between the electricity they consumed and what their rooftop produced. (California law says that utility companies must ‘square up’ by Feb 1st of each year for the previous year’s energy consumption/production). Some California homeowners are receiving more than $2000. annually for selling their excess electricity to the grid.
Well, that’s California for you! A tiny number of states (and countries around the world) allow net metering and require their utility companies to ‘pay up’ at the end of each year, for the net electricity purchase.
As you can imagine, utility companies have mixed responses to net metering. Some see net metering as a threat to their existing business model.
But in the case of California, utility companies were looking at multi-billion dollar investments to build behemoth (and politically unpopular) nuclear power plants, hydro-electric dams, or costly natural gas fired power generation at a time of increasingly stringent environmental regulations/oversight.
Since the foresighted regulations brought along by former California Governor Arnold Schwarzenegger and followed up nicely by present Governor Jerry Brown, California has eased through its energy crunch with power to spare.
Not only has it worked, it has added power generation capacity exactly where the power is required and when — which, in the Great Bear State, is when the Sun is high in the sky and air-conditioning units are blasting away (statewide) at max capacity.
More distributed energy is planned for California — and funny enough, this time, the power companies are cautiously leading the charge!
California already leads the United States in most measures of the clean energy economy, but two new initiatives by the state’s grid operator could ensure the Golden State’s electricity system can handle far more renewables, electric vehicles, and power demand.
The California Independent System Operator (Cal-ISO) announced two plans last month to help it integrate EV’s as grid balancing resources, increase demand response and energy efficiency to shave peak demand, and coordinate long-term grid reliability as more renewable power generation comes online.
Either of these initiatives by themselves would be big news for the cleantech industry, but taken together, they hint at the true potential of California to blaze a path toward a clean energy future.
Shave Consumer Power Demand To Boost Grid Reliability
Cal-ISO started in mid-December by releasing the Demand Response and Energy Efficiency Roadmap, a blueprint intended to help “flatten” peak consumer electricity demand while enabling grid operators to better incorporate distributed generation and energy storage within three years.
The plan also takes a long-term approach toward replacing the retired San Onofre Nuclear Generating Station, as well as the potential retirements of 6,000 megawatts of older coastal power plants at risk of closing starting in 2017 when regulations limiting ocean water to cool turbines take hold.
“Implementing new, more responsive resources on a system-wide scale using a market mechanism will further advance California’s clean energy goals,” said Heather Sanders, Cal-ISO’s Director of Regulator Affairs. “It could also replace or defer investments in more expensive energy infrastructure.”
Four integrated pathways are necessary to boost the state’s reliance on energy efficiency and demand response, as well as distributed generation resources like microgrids and rooftop solar without threatening reliability, according to Cal-ISO:
Load reshaping: Using incentives to modify consumer power use, flatten peak demand, and better forecast demand instead of building new peaking generation capacity.
Resource sufficiency: Ensuring enough generation resources are available to be dispatched across the system to match demand trends.
Operations: Changing ISO policies to use generation resources more efficiently as well as developing new market policy to better value and expand demand response participation.
Monitoring: Provide benchmarks and mechanisms to monitor progress and ensure the plan accomplishes its goals on time.
EV’s Help Strengthen The Grid Instead Of Crashing It
The Vehicle-Grid Integration Roadmapaims to coordinate EV charging with grid conditions by creating tools for EV networks to better respond to market signals like charging when demand is low and pushing power back onto the grid when demand is high.
“Vehicle electrification presents an unprecedented opportunity, through charging strategies and aggregation, to contribute to the reliable management of the power grid without impacting consumer driving habits,” reads the report…At a minimum, managed or smart charging strategies are needed to ensure EV’s do not increase peak load, requiring additional generation or capacity expansions.”
Turning EV’s from a potential grid reliability risk into a resource is an important issue for the state. It’s home to the most EV’s in America, and is targeting 1.5 million EV’s by 2025 as part of a multi-state compact. California’s also home to the most renewable energy output of any state, so ensuring EV’s integrate with the grid can alleviate concerns of “crashing” the grid when they’re all plugged in while expanding the market for renewable generation when it’s available.
Similar to the demand response/energy efficiency roadmap, Cal-ISO outlines three pathways to best integrate EV’s onto the grid:
Determine vehicle-grid-integration value: Determining value of grid services like energy storage and distribution to EV owners, while estimating the total market potential for VGI services.
Establish policies and regulations: Defining how EV’s can integrate with the wholesale and retail power markets as well as setting fair compensation for grid access to EVs.
Enable technology innovations: Supporting technologies to better manage EV integration like aggregation, grid-EV communication, and control over two-way power flow.
Can California Once Again Lead Us To A Clean Energy Future?
Perhaps most promising, however, is the fact that Cal-ISO isn’t just making these policy decisions in a vacuum. Both roadmaps were developed in concert with utilities, developers, and business interests to ensure they’re realistic.
California is already the epicenter of America’s clean tech market, and it’s safe to say other states and grid operators look west when seeking best practices to reliably add clean energy resources. But the state has also been the location of one of the biggest energy market failures – Enron. By carefully assessing what’s needed to make the power system of tomorrow work, Cal-ISO may just be creating a roadmap for the rest of the U.S. to follow.