Navigant Research Blog

New Energy Solutions Shaped by Local Challenges

— January 3, 2017

HydrogenThe transition to a renewables-based energy system is taking different forms in regions around the world. This stands in contrast to the traditional approach to energy infrastructure and development, which has been very much one-size-fits all, utilizing large centralized generation and standardized transmission and distribution systems. Moving forward, the optimal grid architecture and mix of energy generation and storage technologies will vary based on the particular needs and resources of a given area. A prime example of this dynamic are Scotland’s remote Orkney Islands, which are ahead of most of the world in the transition to renewables-based energy. While much of the world is looking to batteries to solve challenges associated with the intermittency of renewable energy, local conditions in Orkney are driving the islands to take a different approach.

Innovation on the Islands

The islands are home to the European Marine Energy Centre (EMEC), where innovative wave and tidal energy systems are being tested. The EMEC recently launched its Surf ‘n’ Turf project to capitalize on the excess energy produced at the facility using a 500 kW electrolyzer from ITM Power for hydrogen storage. Elsewhere on the islands, another hydrogen storage project is helping maximize the use of renewable generation while improving grid stability and reducing the need to import fuels for transportation. The BIG HIT project launched early in 2016 aims to limit the amount of curtailed wind energy, which has reached nearly 30% annually over the past 3 years. This project will use excess wind energy to power a 1 MW electrolyzer to generate hydrogen that can be used for power generation in fuel cells, as fuel for a new fleet of 10 fuel cell powered vehicles, or to supply two recently installed hydrogen powered boilers for district heating.

A hydrogen-based energy storage system is an ideal solution for the Orkney Islands for a number of reasons. With only two 33 kilovolt cable connections to the Scottish mainland, the islands do not have the luxury of exporting excess renewable generation to neighboring systems and are forced to curtail energy during peak production. While batteries are able to store a few hours’ worth of excess generation, the islands often require an entire night’s worth of generation to be stored for relatively long periods of time. Storing excess electricity in the form of hydrogen is much more well-suited to this need and provides numerous other benefits, as well.

Like most islands, residents in Orkney pay high prices for transportation fuel given the lack of local resources and the need to transport everything via ships. The Orkney Islands Council is hoping to improve this situation through the use of battery and fuel cell electric vehicles powered by energy generated locally on the islands. The Council also believes hydrogen will play an important role in the islands’ future as fuel cell technology becomes increasingly common for powering ships. By establishing and refining hydrogen storage and fuel cell technology for the maritime industry, the islands hope to emerge as a hub of innovation and develop technologies to export worldwide.

Local Resources, Local Solutions

Given the specific local conditions and challenges, a hydrogen-based energy system is well-suited for the islands. However, this will not be the case in all locations. As the industry continues to evolve in the coming decades, energy systems will be based more on local conditions and resources than ever before. This will result in a much more diverse and complex industry as the resources available in each region are tapped into. Orkney is providing an early example of how local conditions will shape the development of the next generation of energy systems.

 

MESA Standards Aim to Organize a Diverse Market

— December 15, 2016

IT InfrastructureLast month, the MESA Standards Alliance officially released the first draft of a protocol for communications standards between utility control centers and energy storage systems (ESSs). This marks an important development for the ESS industry given the relative lack of existing standards and the increasingly diverse range of products in the market. Founded in 2014, the MESA Alliance is an organization of industry groups including both product vendors and utilities working to accelerate the growth of the ESS industry. MESA is developing open, non-proprietary specifications and standards for multiple types of ESSs.

Compared with the broader energy industry, standards for ESS components and software have barely begun to develop. Yet there is a clear need for standardization. Many vendors and other stakeholders in the industry cite the diverse operational characteristics of ESS components and the differing utility interconnection protocols as barriers to growth and cost reductions. There are basic standards currently in place covering ESS design and the integration of systems into the grid, and efforts are underway to update these protocols or supplement them with more in-depth standards. To date, the main standards for ESS come from the International Electrotechnical Commission (IEC), most notably the group’s TC 120 standards. However, these standards are more high-level and cover aspects such as defining unit parameters, testing methods, environmental issues, and system safety.

MESA Standards

MESA’s protocols are among the most comprehensive standards in the industry, aiming to accelerate the market through greater system interoperability, scalability, safety, quality, and affordability. A key focus for the grid is on standardizing communications between components within an ESS and between a system and the grid. This type of standardization can give customers more choice in the market and reduce project-specific engineering costs. These standards will also hopefully reduce training costs and improve safety for field staff through uniform procedures for safety and efficiency. The two primary segments of MESA standards are:

  • MESA-Device: Addresses system design for the components of an ESS, including the storage medium (batteries), inverters/power electronics, and meters
  • MESA-ESS: Specifies how an ESS communicates with the utility’s grid control and power scheduling systems (and is built on the DNP3 protocol)

The recently published draft protocol is for MESA-ESS and primarily addresses ESS configuration management, ESS operational states, and the applicable ESS functions. MESA hopes that these standards will enable electric utilities and grid operates to more effectively deploy and manage ESSs—including fleets of multi-vendor systems—to meet various needs with minimal custom design or engineering.

As the ESS industry has matured, software and controls platforms that communicate with grid systems are emerging as key to the technology’s value. However, there are a growing number of software platforms available, each with differing characteristics. Navigant Research’s new Energy Storage Software: Aggregation, Asset Management, and Grid Services report explores these platforms in detail. More open and official standards in the industry could result in greater interoperability between the various platforms, thus enabling greater customer choice. These developments can allow technology suppliers to focus on their core competencies and will hopefully lead to more rapid cost reductions and innovations.

 

The FERC Looks to Bring Down Barriers to Storage and DER

— December 7, 2016

AnalyticsLauren Callaway coauthored this post.

This November, the US Federal Energy Regulatory Commission (FERC) released a notice of proposed rulemaking (NOPR) that could elicit a fundamental step forward for storage and distributed energy resources (DER). The NOPR includes two proposals—one establishing a participation model and market rules for storage resources in wholesale markets, and the other defining DER aggregators as participants in wholesale markets.

Developing a Pathway for Storage

For the first proposal, regional transmission operators (RTOs) would be required to develop participation models for grid-tied storage, which take into account storage’s unique physical and operational qualities. The NOPR requires that participation models include the following five criteria:

  • Storage resources are eligible to provide all capacity, energy, and ancillary services that they are technically able to perform
  • Bidding parameters that account for the above services are established
  • Storage resources are allowed to act as both buyers and sellers, included in establishing the clearing price for electricity
  • RTOs must establish a minimum size requirement for storage that cannot exceed 100 kW
  • Services sold from storage resources to the wholesale market be sold at the wholesale locational marginal price

These criteria are driven by a need to properly recognize the unique operational characteristics of storage systems, enabling storage to act as either load or generation depending on system needs. Essentially, the NOPR proposes to develop a more level playing field within the wholesale markets that will better reflect the cost-effectiveness of storage. Additionally, grid operators will be able to capitalize on storage’s unique abilities to provide black-start service, spinning reserves, renewable ramp control, and output smoothing.

The FERC has previously made efforts to allow for the integration of storage by recognizing its unique value, but those have had limited impact so far. Under FERC Order 755 (2011), RTOs are required to create a fast-regulation service in wholesale power markets, compensating resources for speed and accuracy using a mileage payment—storage is uniquely capable of providing these services. Yet to date, only the PJM region has a well-developed market with fast-regulation prices high enough to make a solid business case for storage. Despite the fact that over 250 MW of storage has been deployed and PJM has decreased the total need for regulation due to the greater accuracy and responsiveness of storage systems, other RTOs have remained slow to adopt the rule. The current NOPR takes into account lessons learned by PJM’s enablement of storage participation.

DER Aggregator Participation

The FERC also proposed to require each RTO/independent system operator (ISO) to revise its tariffs to allow DER aggregators to participate directly in markets by permitting such aggregators to register under the participation model in the RTO/ISO tariff that best accommodates the physical and operational characteristics of their resources. While the specific details and timeline for implementing these proposals are still unclear, this could have a major impact on the national DER market.

To date, only California has allowed aggregated DER (aside from traditional demand response and load control) to bid into an organized statewide capacity market. Furthermore, outside of pilot programs, there have been no aggregated DER allowed to provide ancillary services such as frequency regulation. DER can be a much more effective source of frequency and voltage regulation compared to centralized assets, as the systems are dispersed throughout distribution networks where issues may originate, particularly areas with high penetrations of solar PV generation.

DER providers have been pushing RTOs and the FERC to implement these rules, which can provide new sources of revenue for aggregated storage systems, thereby greatly reducing costs to customers and increasing the value of these systems to grid operators. Additionally, allowing DER to provide these types of services can be part of a post-net metering solution that fairly compensates DER owners based on specific grid needs in a given location at any time. The upholding of FERC Order 745 earlier this year has also set a powerful precedent in terms of allowing participation of behind-the-meter resources into wholesale markets.

 

New York’s Grid Restructuring Begins to Take Shape

— November 28, 2016

GeneratorAfter numerous rounds of conferences, discussions, and announcements, concrete results from New York’s Reforming the Energy Vision (REV) initiative have begun to emerge. Despite the initiative’s ambitious goals, limited on-the-ground changes have been made. The recent announcement that Green Charge Networks will deploy a network of 13 MWh of distributed energy storage marks one of the most significant developments to date and adds Green Charge to the growing list of companies driving the initiative.

The REV initiative aims for major reforms to both utility business models and market regulations to enable a transformation to a grid built around distributed energy resources (DER). Near-term targets include allowing for greater use of renewable generation and other DER to reduce emissions, improve the resiliency of the grid, and limit costs for upgrades passed onto customers. New York City and other urban areas face extremely high costs for replacing or upgrading underground electrical infrastructure, hence the initiative’s focus on using local DER.

Ambitious Goals

Perhaps the most notable project through REV thus far is the Brooklyn Queens Demand Management Program. This program seeks to defer a proposed $1.2 billion substation upgrade through a combination of 52 MW of demand reductions and 17 MW of DER investments. Most of the projects supporting this effort involve conventional demand response (DR), energy efficiency, and other demand-side management solutions. Utility Consolidated Edison is also looking at more reliable options, including distributed energy storage and microgrids. It first announced requests for information and proposals in March 2016. Following this request, the first major announcement of new DR capacity was released in August 2016, accounting for 22 MW of peak demand reduction capacity, with payments to providers ranging from $215/kW to $988/kW each year. This announcement is noteworthy for including distributed energy storage from leading providers Stem and Demand Energy.

The program has also established incentives for thermal energy storage, with system vendor Axiom Energy offering subsidized solutions to grocery stores throughout New York city. Through the program, customers can save on their monthly bills by using stored ice to provide cooling for refrigeration at times of peak grid demand rather than compressors; the utility is then able to reduce peak demand in constrained areas. These incentives are expected to result in 6 MWh to 8 MWh of utility-controlled demand reduction capacity.

Building on Success

The announcement for a further 13 MWh of distributed storage capacity from Green Charge Networks further builds on the progress made through the REV initiative. This progress positions New York as a leading state in shaping the structure of the emerging distributed energy ecosystem. A successful transition to a DER-centric grid requires a two-pronged approach. It’s necessary to both facilitate the integration of new technologies and also to reform utility business models so that all stakeholders—including utilities—benefit from the efficiency and resiliency that DER can provide. These recent developments have made New York’s efforts much more tangible, and it will be exciting to see what else the state has in store.

 

Blog Articles

Most Recent

By Date

Tags

Clean Transportation, Electric Vehicles, Energy Technologies, Finance & Investing, Policy & Regulation, Renewable Energy, Smart Energy Practice, Smart Energy Program, Transportation Efficiencies, Utility Innovations

By Author


{"userID":"","pageName":"Alex Eller","path":"\/author\/aeller","date":"1\/18\/2017"}