If you need an antidote for divisiveness and pessimism, consider an interdisciplinary workshop, held on the eve of the national election, in conjunction with the Fall Conference of the Peak Load Management Alliance (PLMA). For several years, the PLMA has hosted half-day pre-conference workshops for each of its topic interest groups. But this year, Steve Koep, co-chair of the Behind-the-Meter Storage group, and I, co-chair of a new DER Integration interest group and project officer for CSVP, went in together. Steve's group focuses primarily on technology for behind-the-meter storage, while the DER Integration group focuses more on program design issues. The result was a striking demonstration of collaboration and of progress in our industry.
We attracted excellent presentations, as you can see from the PLMA Conference agenda. We hit on many of the topics of great interest to those of you who have followed CSVP, in its efforts to increase local solar-project value. We hit policy issues, thanks to Robin Roy, representing the National Resources Defense Council; technology issues surrounding batteries, electric vehicles, and grid-interactive water heaters, thanks to multiple vendors, as well as Mike Taylor of SEPA; and program design approaches, thanks to Rich Barone of Hawaiian Electric, Dan Bradley of Navigant, and myself.
I was struck by how quickly the market is responding to the need to combine technologies and program designs into solutions altogether different from the standard demand response program of just a few years ago. Utilities, grid operators, vendors, and aggregators are all recognizing that assets behind the meter (both chemical and thermal storage) can be used to provide grid services required by increasing renewables penetration. While there has been much talk lately about DERs, this specific discussion dates back to the launch of a new industry group, the Community Storage Initiative , which held its first Leadership Council meeting back in July.
Perhaps unsurprisingly, Hawaiian Electric has taken leading steps, valuing specific grid services and embedding the results in "grid service tariffs." These tariffs include rates and riders that tell customers how they can benefit from providing these services, either through utility-administered programs or through aggregator-delivered programs (via Grid Service Purchase Agreements with HECO). Rich discussed how this approach is currently being applied in demonstration projects, while these tariffs are being finalized and filed.
In my opinion, this is a Big Deal. There are few, if any, other examples of vertically integrated utilities working in the absence of an ISO or RTO to break out economic value of individual grid services. This approach holds promise for many other utilities. It is especially meaningful for those operating in markets without ISOs, or more broadly, in markets without an active ancillary services market open to behind-the-meter resources. We at CSVP have found that the majority of utility-led community solar programs are in those regions, so Rich's experience could map onto utilities that want to use community solar as a market-based laboratory for testing a full DER integration strategy.
Meanwhile, from a market six time zones east of Hawaii, we heard from Dan Bradley of Navigant discuss the Brooklyn Queens Demand Management Initiative. This is Consolidated Edison's major project to defer billion-dollar distribution system improvements in a congested urban area. Here, Con Ed ran an auction mechanism to create a competitive market for distributed energy resources, with four product auctions conducted in July of this year. The mechanism chosen was a "reverse auction," in which the auction was open for a set period of time, during which bidders could enter one or more bids in real time. Candidate technologies included load curtailment, energy storage, and a limited amount of self-generation (typically Diesel). Con Ed accepted offers for 22 MW of peak-hour DR from 10 providers, at prices ranging from $215/kW/year to $988/kW/year, depending on the amount of power reduction and technology used. These reductions must be delivered during specific time intervals when called in 2017 and 2018 in the specified locations.
This too is a Big Deal. The deferral of distribution expenses has been an elusive goal of DR programs and distributed-solar resource proponents for many years. A reverse-auction mechanism in a specific geography appears to hold promise in reducing the complexity of problems like estimating market potential and targeting programs. The assembled group at our workshop looks forward to hearing more regarding Brooklyn-Queens initiative results over the next two years.
I'm running out of space to report on awesome work in grid-interactive water heaters, electric vehicle programs, and lots more, so feel free to contact me, via CSVP to discuss any of these developments. But the key takeaway for followers of CSVP is that the markets for behind-the-meter storage and demand response are evolving rapidly, in ways that can add value to solar programs. Watch the Community Storage Initiative and related efforts for new opportunities to integrate multiple forms of distributed energy resources in ways that capture additional customer and grid value. If you have a hard time keeping up, watch this space; CSVP, through the work of each of our participating firms, is leading, not only in the specific field of community solar, but also in building the larger collaborations needed to support growing penetration of all kinds of solar resources on the grid.