Navigant Research Blog

Hawaii Axes Net Metering as PV Surges

— November 11, 2015

While most utilities are just beginning to adapt to the challenges presented by large-scale solar integration, the state of Hawaii has been at the forefront of this issue for some time. Hawaii is in the midst of a residential solar revolution, and with PV now sitting atop 12% of rooftops in the state, it has the highest PV penetration rate in the nation. While this presents an array of benefits, utilities are also being confronted with increased costs and decreased revenue streams. As these challenges and opportunities continue to grow, Hawaii may present itself as a case study in adaptive solar policy.

Earlier this month, the Hawaii Public Utilities Commission (HPUC) issued a ruling that closed Hawaii Electric Companies’ (HECO) net metering program to new applicants. Current customers and those awaiting approval are still eligible for the program, while new customers will be offered alternatives in the form of a grid-supply or self-supply system. A grid-supply system operates essentially as a discounted net metering rate, while the self-supply system is intended for residences that will consume all of their solar electricity and thus will receive an expedited interconnection review. The HPUC also ruled that HECO companies must pursue a time-of-use (TOU) tariff that would allow for variable electricity pricing. TOU pricing offers advantages to both utilities and consumers alike as it provides a financial incentive for customers to shift their energy consumption patterns, and in turn alleviates pressure on the grid.

Hawaii as a Template

This ruling has received mixed reviews across the industry. While some solar proponents have criticized the decision—including the Hawaii Solar Energy Association—others, such as the Solar Energy Industry Association, have highlighted the uniquely high penetration rate in Hawaii as warranting rate changes. As more homes install PV, utilities are left with a dwindling customer base to support their operations costs. According to HECO, $53 million in operations and maintenance costs were shifted to non-solar consumers in 2014. More of these policy changes should be expected as solar and other renewables move from small-scale toward large-scale integration. Policy incentives that were aimed at kick-starting these industries will likely receive pushback as renewables become more competitive in the marketplace. In the future, Hawaii may become the template for other states as they adapt to a more renewable energy based infrastructure.


The Future Workspace: Intelligent Building Platforms and Employee Engagement

— November 11, 2015

Boatbuilder_webThe proliferation of smart phones and the pervasive use of smart phone apps in the workplace have created new opportunities for occupant engagement. Beyond comfort, smart phones also generate economic and business benefits toward building operations.

Advanced sensors, wireless gateways and communications, and building energy management systems (BEMS) have already made the smart office a reality. These technologies give building owners and operators unprecedented insight into equipment performance, space utilization, and occupant feedback. Because of this, intelligent buildings can leverage ever growing data sets to become dynamic workspaces. Buildings are now more energy efficient and productive than traditional office buildings ever have been—and they are also more comfortable.

Smart Offices

Information technology platforms in intelligent buildings can fine-tune everything from heating, ventilation, and air conditioning (HVAC) to lighting to conference room scheduling. Technology innovations such as the Internet of Things (IoT) that enable these advances in operational performance leverage open systems that integrate automation hardware, software, and services. The IoT is an infrastructure for aggregating, transmitting, and analyzing data streams while ensuring cyber security and delivering domain-specific insights. The IoT is a potentially disruptive market force because the framework unifies data that has been historically isolated to generate comprehensive information about related systems.

In the intelligent buildings context, the IoT provides a structure to generate and share actionable insights for system improvement, which may take the form of fine-tuned lighting or HVAC settings. IoT platforms are scalable and secure to support software analytics that identify potential improvements for energy savings, operational efficiencies, and increased occupant satisfaction. Using these IoT platforms, intelligent building decision-makers can access more unified and comprehensive information about the performance of their individual facilities or portfolios.

This platform approach has changed the paradigm for building operations and maintenance in intelligent buildings. Cost-effective sensing devices gather granular building data ranging from equipment settings and performance to temperature and humidity. Wireless networks and open protocols can then transfer this data into a cloud-based BEMS that runs the analytics to prioritize system improvements. In some cases, a BEMS can push automated adjustments to building systems.

Accessing data and providing actionable insight in real time enables advanced management strategies that include predictive maintenance, proactive capital planning, and rapid response to occupant feedback. These processes provide greater efficiency and reduction in peak demand charges, so building system performance can be optimized and yield economic benefits in the form of reduced energy bills.

Intelligent Building Innovations

The process of transforming a facility into an intelligent building is scalable and cost-effective—and a different business engagement from the traditional equipment overhaul or deep renovation. Developing an intelligent building means gaining insight into its existing systems, improving their performance, and leveraging IT-based, cost-effective solutions to supplement the existing infrastructure.

One pioneering concept in the intelligent building space is using people as sensors. An example is Comfy, designed by Building Robotics. Comfy connects existing HVAC systems in office buildings to the cloud through Intel-based intelligent gateways. The system utilizes feedback from individual occupants through a simple smart phone app that analyzes the comfort levels in an office and then refines HVAC settings to optimize the workplace environment. This new approach to occupant comfort is changing the intelligent building workplace.

For a deeper exploration of this topic, tune in on November 17 at 2:00 p.m. EST for Navigant Research’s webinar Smart Offices: How Intelligent Building Solutions Are Changing the Occupant Experience. Joining me will be Shuo Zhang, Business Development Manager at Intel, and Andrew Krioukov, CEO of Building Robotics, who will give insight into how intelligent gateways and smart phone apps are transforming the smart office.


Do Cities Need Large Hydro to Go 100% Renewable?

— November 11, 2015

Cities are becoming increasingly proactive in setting targets for their utilities to shift from fossil fuel power generation to renewable energy resources. There are currently three cities in the United States that run on 100% renewable energy, and there are 96 cities globally that have pledged to accomplish the same feat. Although only small cities in North America have made the transition thus far (including Aspen, Colorado; Burlington, Vermont; and Greensburg, Kansas), large cities such as Vancouver, Canada and San Francisco, California have also set targets to transition to 100% renewable energy. While these cities are using significant amounts of solar and wind energy resources, having access to large hydropower generation is a luxury common to cities with 100% renewable generation goals. Vancouver, for example, has been using hydropower to supply about 90% of its electricity throughout 2015.

Hydro: Helpful but Unnecessary

Nevertheless, regions without access to hydropower are able to both economically and technically transition to renewables, according to researchers and engineers from Stanford University and University of California, Berkeley. The universities developed a state-by-state plan under The Solutions Project that shows how each state could convert to 100% renewable energy by 2050. Using Colorado as a non-hydroelectricity-intensive system example, the state would need to get the vast majority of its electricity from wind and solar, specifically 55% of its electricity from wind power and 40.8% from a variety of solar applications (including 15% from concentrating solar power [CSP] plants, 17.6% from solar PV plants, 4.2% from residential rooftop PV, and 4% from commercial/government rooftop PV). Geothermal (3%) and a very small amount of hydroelectric (1.2%) would constitute the remainder under the plan.

According to the study, transitioning Colorado’s energy resources in this way would create over 70,000 construction and operation jobs, save $7.4 billion in avoided health costs per year, and would provide annual energy cost savings of $312 per person in 2050. The Solutions Projects seems to demonstrate that even in states with little or no hydroelectric electricity supply, it is still technically and economically feasible to transition to 100% renewable energy.

Economic Opportunity, Not Sacrifice

Of the 96 cities that have pledged to decarbonize their electricity supply, 86% believe taking action on climate change presents an economic opportunity. According to the 2015 Smart Energy for Smart Cities report from Navigant Research, that economic opportunity will be substantial; the global smart energy for smart cities technology market is expected to grow from $7.3 billion in revenue in 2015 to $20.9 billion in 2024.


A New Era of Demand Response

— November 9, 2015

Tightrope_webWhat does the future of demand response (DR) look like? Hawaii is now a test bed, guinea pig, and innovator, as you can hear during a free 30-minute discussion this Thursday.

The amount of DR capability in North America has grown considerably in the past 5 years, both at utilities and within competitive markets such as PJM. However, DR technologies and policies have generally relegated DR to a minor role as a last-called resource. DR has typically been slower to respond than combustion turbines, and the load relief it provides has been difficult to assess precisely (if at all) in the real-time operating environment in which control center staff operate. Furthermore, regulatory policies in support of DR have generally focused on the magnitude of megawatts achieved at the expense of the quality and usefulness of those megawatts. However, slowly but surely, this trend is changing.

The use of DR in grid planning and operations has solidified as utilities increasingly rely on DR to meet installed capacity requirements and sometimes even operating reserve requirements. Furthermore, independent system operators led by PJM have incorporated DR into procurement mechanisms for capacity, energy, and ancillary services. Industry acceptance of DR as an integral part of the future grid continues to grow, with states like California and New York rolling out major regulatory initiatives and utility Hawaiian Electric issuing a request for proposals to DR aggregators for the provision of grid services, including ancillary services, from demand-side resources. So which technologies and policies will drive DR into the future as a more integrated and valued resource?

The Peak Load Management Alliance (PLMA) is hosting a free webinar on November 12 at 12:30 EST to highlight the significant regulatory and utility strategy initiatives taking place in Hawaii, where massive customer investment in behind-the-meter PV is encouraging Hawaiian Electric to develop innovative uses for DR to help manage the grid in real time. This could be the future for many utilities that are only now seeing the first effects of customer investment in renewables, storage, and other distributed energy resources.

This is a follow-on discussion from a Power Engineering article by Navigant regarding how a new era of DR is blurring the lines between generation and demand-side resources in Hawaii and elsewhere. The article covered some of the emerging DR technologies that are allowing DR to be viewed more on par with generators and reviewed new applications that are raising DR’s prominence as a valued resource alternative for utilities and system operators. Looking ahead, emerging state policies and utility initiatives are driving DR to a heightened prominence that would have been difficult to envision just 5 years ago.


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