Photo Credit: Buffalo Niagara Medical Campus
At the Renewable Energy Finance Forum in New York on Thursday, Iberdrola and National Grid offered a sneak peak at the demonstration projects they will be filing in July with the New York Public Service Commission as part of the state’s energy transformation initiative, Reforming the Energy Vision.
The projects cannot be rate-based, nor can they be one-off technology experiments.
“We call these demonstrations and not pilots,” said Richard Kauffman, New York’s chairman of energy and finance. “The industry across the U.S. has had enough pilots. It’s time to move away from one-of-a-kinds and move to the first of many.”
Utilities across New York will each have to file at least one demonstration project next week, which will be reviewed by regulators in the following month. Kauffman noted that this is just the beginning, and that expectations should be tempered.
“Developing these projects is really hard work,” he said. “The projects will get better and better.”
Cheryl Martin, formerly the director of ARPA-E and now consulting on New York’s REV, said that for utilities and third parties, it is like trying to learn a new common language. "Utilities cannot just put out an RFP. They cannot say, ‘We know what we want, just give it to us,’” she said.
Iberdrola’s director of smart grid planning and programs, Laney Brown, was visibly excited as she outlined her company’s three proposed projects.
The first will be Interconnect Solutions, a platform powered by U.K. startup Smarter Grid Solutions to enable faster and cheaper interconnections for distributed resources. Brown noted that within the past year, 40 percent of Iberdrola’s proposed distributed energy projects did not move forward because of slow or expensive grid-connection issues. Bob Currie of Smarter Grid Solutions said his company has saved between $100 million and $200 million in grid connection upgrades for utilities and developers in the U.K.
The next product will be an energy marketplace developed for Rochester Gas & Electric that will be powered by Simple Energy. The marketplace will offer various tailored offerings for consumers that are designed to be more engaging than traditional energy-efficiency programs.
Iberdrola’s third proposed project is community energy coordination in the Ithaca region. It will help the community evaluate and scale its sustainable energy solutions, which could include everything from community solar to microgrids.
National Grid’s projects will also focus on energy efficiency, community engagement and microgrids. Jim Gould, VP of strategic communications, noted that the utility spends billions on infrastructure upgrades, “but we don’t spend enough on changing culture.”
REV is forcing a significant and tangible increase in that investment. National Grid recently formed a new energy innovation team to pull team members from various silos to quicken the pace of change.
In Clifton Park, National Grid’s first proposed demonstration project will be undertaken in collaboration with Sealed, a New York City-based startup that offers no- and low-cost efficiency retrofits that are paid back through a Sealed bill instead of through the utility bill -- similar to a residential solar lease. The homeowner is guaranteed a lower bill than they would have paid through their utility.
“We take 100 percent of the risk. We only make money when they save more than we guarantee,” said Andy Frank, founder and president of Sealed. Unlike many utility energy-efficiency programs that focus on just meeting regulatory requirements with items like free light bulbs, Sealed has to save about 20 percent to 30 percent to meet its goals, which means installing upgrades like better insulation coupled with smart thermostats.
The second proposal for National Grid is in Potsdam, which is near the border of Vermont, to help assess community energy solutions and resiliency, given the community’s relative isolation.
At the Buffalo Niagara Medical Campus, National Grid is seeking to increase the resiliency and efficiency of the facility's energy plan. “It’s more than a microgrid,” said Ed White, VP of customer and business strategy at National Grid. Rather than the redundancy that can occur when every building on a campus has its own backup and energy plan, National Grid will help the entire site develop plans to leverage the campus' energy assets more effectively.
Ultimately, utilities will need to have a strategy to earn fees from markets and customer acquisition, as well as by providing services to third-party providers. These demonstration projects are the first step toward that goal. Third parties will have to evolve too. “They can’t just be thinking about the customer side of the meter,” said Kauffman. “They need to think about the entire system.”
In an effort to evolve the language used by utilities and third parties under REV, the inaugural REV Summit will be held September 24 in New York City.
Listen to an Energy Gang episode featuring Richard Kauffman: