Recent Discussions in California’s Clean Energy Revolution
In November, More Than Smart, a non-profit focused on promoting increased distributed energy resource (DER) integration, hosted its National Distributed Energy Conference in San Francisco. Among conference participants were utilities, regulators, solar developers, researchers, policymakers and others (including Kevala) who gathered to discuss the current barriers to DER integration as well as potential technology, business model and policy solutions to creating a future DER-optimized grid.
Throughout the conference, speakers and attendees referenced DSPx, a More Than Smart abbreviation for Next Generation Distribution System Platform, a project spearheaded by the federal Department of Energy and state Public Utilities Commissions in California and New York to develop a detailed plan for enabling full participation of DERs in the US electricity market.
Although still under construction, DSPx is going to revolutionize the energy industry in the same way cell phones changed the way we communicate or Uber changed the way we commute. It’s going to broaden the number of participants who provide energy to the grid and change the way we pay for using and are compensated for providing energy.
Here are four things you should know about DSPx and the conference.
1. What does that “full participation” of DERs mean?
DSPx broadens participation terms for DERs by giving these assets a larger role in grid operations and planning. Historically, the grid has been managed by operators who create a schedule for large power plants to:
- Produce enough energy to meet demand and
- Provide backup power in case of outages and services for grid safety, stability and reliability
Small, scattered solar projects, batteries and other DERs were not central to the large, scale planning process and thus have traditionally only been factored into energy supply at local level. Full DER participation in DSPx would include a role for DERs to provide backup power and ancillary services (e.g. maintain voltage). In return for providing multiple services, DER assets would receive more appropriate and broader compensation for providing clean power and grid stabilizing services.
2. What states will be impacted by DSPx?
DSPx is being led by two states, CA and NY, who have taken a leadership role in paving the path for DER support and integration. A handful of other states including HI, MI, CO, TX and NH have also recognized the importance of DER integration planning and have passed state bills and/or started similar intrastate discussions. More Than Smart is working with actors in multiple states and providing a conduit for states to collaborate and share insights.
3. What are some major hurdles to full DER participation?
There are many that span foundational operational, technical and economic features of the grid. Data transparency in the energy industry has been a hot button issue this year and has attracted support from major agencies including the White House.
Aram Shumavon (CEO and Founder of Kevala), Paul De Martini (Managing Director, Newport Consulting) and Laura Wang (Project Director, More Than Smart) published a whitepaper, Data and the Electricity Grid, that was shared at the conference that summarizes the need for data in five key areas:
- System Planning– To balance DER integration and distribution system planning
- Regulatory Compliance– To support regulatory decision making
- Grid Operations– To enable real-time and day-ahead grid planning
- Commercial Transactions– To provide economic incentives for suppliers and buyers
- Market Efficiency– To measure outcomes of new policies
Central to the solution of full DER participation is data transparency. More Than Smart has proposed a Walk-Jog-Run framework that enables participants to first stretch then activate the muscles required to build and operate DSPx. Much of this framework is built around the need to put systems and controls in place for new energy market that will use, share and generate different datasets than those in use today. Part of this overall exercise will also involve what, how and when grid data needs to be shared for commercial purposes.
4. What data is important for spurring continued investment and growth in DERs (e.g solar)?
DER adoption and investments in solar, electric vehicles and other assets is at an all-time high and commercial entities are actively seeking data-rich insights into where to invest in new projects. Some utilities are developing tools, as a result of regulatory mandates, to share grid data but there is still much work to be done to provide clear market signals to commercial entities. In the More Than Smart whitepaper, Shumavon says that the following datasets will be important guides for investors and commercial entities interested in finding high value and low cost areas for the next wave of DER projects.
- Customer information- individual and aggregated by location
- Grid Data
- Grid Conditions- Historical and real-time state of lines and substations
- Hosting capacity- By feeder and substation including interconnection queues
- DER services- Location and type of ancillary services available for DERs
- Interconnection costs- Data on cost of required upgrades at specific locations
- Locational net benefit or value- Methods and data to quantify DER value by location
Utilities, DER providers and PUCs will need to work together to finalize methods to valuing full participation of DERs in DSPx. At Kevala, we believe these datasets are a good starting place for understanding where economic, social and physical conditions meet. We’re actively participating in working groups such as More Than Smart and providing thought leadership in evolving market frameworks. We’re also building, with support from the DOE Sunshot award, a geospatial analytics platform for utilities, policy makers, developers and others to use in locating and valuing DERs as DSPx methods evolve.
To learn more about our work or to send comments on this article, visit us at www.kevalaanalytics.com.