Advanced Energy Perspectives

A funny thing happened on April 14. In a simple memo directing the Department of Energy to conduct a short-term study, the Trump Administration signaled that it was seeing advanced energy as a problem that needs to be solved. Whereas AEE has argued that homegrown advanced energy technologies like wind and solar, energy efficiency, demand response, energy storage, and advanced grid systems deserve a central role in the administration’s “America First” energy plan, the outline of DOE’s study portrays renewable energy, in particular, as a threat to electric system reliability, even “national security,” and it takes aim at federal, and even state, policies that have facilitated its growth. For the advanced energy industry, the memo was not just a study order, it was a shot across the bow.

This post is one in a series of feature stories on trends shaping advanced energy markets in the U.S. and around the world, drawn from Advanced Energy Now 2017 Market Report, which was prepared for AEE by Navigant Research.

Nearly $3 trillion has been invested globally in grid modernization since 2000. According to the International Energy Agency, another $8 trillion will be required over the next 25 years to accommodate emerging areas like distributed intelligence and data analytics. These investments will help boost reliability and resilience while reducing operating costs. Amid the digitalization of energy, offering up the IoT, connected devices, smart grid, and even autonomous vehicles to consumers, new challenges, such as cybersecurity, arise.

This week, we have stories from the windy plains of Iowa, where a Berkshire Hathaway-owned utility, MidAmerican Energy, is closing in on 100% of its power from wind and solar; booming electric vehicle sales projections and brand new sunroof technology that could transform the market; and some AEE member news and REV updates out of New York. It’s been a busy week all around!

If you’re a regular reader of Advanced Energy Perspectives then you know that we’ve written several times on New York’s groundbreaking Reforming the Energy Vision (REV) proceeding. We’ve also written about rate design and efforts around the country to address net energy metering (NEM). Some NEM reform efforts are better than others. In some cases, utilities have been seeking to raise fixed charges on NEM customers or to impose per-kW monthly demand fees, arguing that NEM customers are not paying their fair share of the costs of the grid. These charges reduce the attractiveness of onsite distributed generation (DG) by shifting utility revenue collection from volumetric charges (per kWh) to monthly charges that cannot be reduced with onsite generation. In our view, such approaches are overly focused on maintaining certainty of revenue for utilities, and as a result fail to adequately consider the value of DG to the grid, such as deferring or avoiding future investments in generation, transmission, and distribution assets.

New York, under its Reforming the Energy Vision (REV) process, is taking a different approach. In its recent order on the Value of Distributed Energy Resources (DER), New York’s Public Service Commission (PSC) put forth an innovative structure for valuing the benefits of electricity from DG that is exported to the grid (and which, under traditional NEM, would be credited at the retail rate). But the order also revealed some problematic features of New York’s treatment of onsite renewable energy generation and the value of its environmental attributes – features worth revisiting as the Value of DER proceeding continues.

In the final days of Maryland’s legislative session, a bill to extend the state’s successful energy efficiency program – known as EmPOWER Maryland – through 2023 became law. With AEE and other efficiency advocates persuading Gov. Hogan not to veto the bill, which had passed the legislature with veto-proof majorities in both houses, the law took effect without his signature, but also with no need for an override vote. The result: an estimated $1.6 billion market opportunity for energy efficiency companies across Maryland unleashed over the next six years.