Advanced Energy Perspectives

This week marked the Department of the Interior’s first offshore wind auction, which raised $3.8 million from awarding leases in the Department’s designated “offshore wind areas,” designed to move development from lease to completion on an expedited basis. Deepwater Wind LLC, based in Providence, RI, won the bid for an area off the RI and Massachusetts coast in what Interior Director of Offshore Energy Tommy Beaudreau called “a very robust and competitive sale.” Jeffrey Grybowski, Deepwater Wind’s CEO, said the site could be generating power as early as 2018.

Senators Jeanne Shaheen (D-NH) and Rob Portman (R-OH) yesterday introduced a new version of their Energy Savings and Industrial Competitiveness Act of 2013 (known as the Shaheen-Portman bill). The most significant change from the previous version is elimination of the “Commercial Building Energy Efficiency Financing Initiative,” a proposed grant program to support energy efficiency upgrades. The co-sponsors penned an op-ed over the weekend emphasizing that efficiency improvements to U.S. buildings alone could save $1 trillion over the next decade, and speaking to broad, bipartisan support for energy efficiency among businesses and in Washington. Heather Zichal, Deputy Assistant to the President for Energy and Climate Change, on July 18 praised the bill, saying the President will give it his signature should it be approved by Congress.     

Recent and ongoing regulatory proceedings on net metering highlight the role of state Public Utility Commissions (PUCs) in setting the terms of advanced energy growth in the United States. 

Net metering — which is offered in over 40 states — requires utilities to credit households and businesses that install small distributed generation systems (such as solar, wind, biogas, fuel cells, small hydro, combined heat and power, and others) for the surplus electricity that they generate. Despite variation in policy design between states, net metering is credited with accelerating the deployment of distributed generation (DG), particularly residential solar photovoltaic (PV) systems. While the incentive level and certain policy design elements (such as caps on total net-metered capacity within a state or utility service territory) are usually set by statute, other key components are determined by PUCs in regulatory proceedings, typically involving extensive stakeholder comment.

In the past couple of months, I have had the opportunity to participate in two exciting conversations about the future of electric power in this country.

In Maryland, at the Wye River Conference Center, the Aspen Institute convened a roundtable on “developing a smart energy network.” That convening included industry leaders and thinkers from the information and communication technology (ICT) and energy sectors. Our discussion focused on identifying ways our one-way system of electricity generation and distribution can be transformed into an integrated ICT network where energy, information and economic value are exchanged at every point. That is the full vision of “smart grid,” and we have a long way to go to see it realized. 

In San Antonio, TX, I took part in the second Utility and Advanced Energy Executive Forum sponsored by AEE and MIT’s Industrial Performance Center (IPC). We brought together leaders of electric utilities, regulatory agencies, and advanced energy businesses to discuss how new technologies and services can be adopted more rapidly. These Forums are hosted on the AEE side by chairman and co-founder Hemant Taneja and Senior Vice President Lisa Frantzis, and by energy innovation expert Richard Lester for MIT-IPC. It was an engaging group, with leaders of companies like PSEG, Northeast Utilities, NextEra, and NRG interacting with advanced energy innovators like CLEAResult, Gridco Systems and First Solar. A third forum is scheduled for next month in Aspen.

These forums are highlighting the need not only for utilities, regulators and advanced energy companies to know each other better, but also to reconcile conflicting incentives and business models. To reap the full benefit of advanced energy innovation, the electricity system in this country is going to have to change. It will take utilities, developers, advanced energy executives, legislators, and regulators, working together, to make that change happen.

A heat wave hit the eastern United States last week, sending temperatures skyrocketing from the Ohio Valley to the Eastern Seaboard to the Great Lakes.  Called a “heat dome,” a formation of hot, stagnant air sat over much of the country. Philadelphia, Washington, D.C., New York City, and Boston saw heat indices as high as 110 degrees. As people strained to keep cool, spot market prices of electricity hit 10 times their usual, and the electrical grid strained to keep up. As this report from Boston public radio station WBUR – featuring AEE member company EnerNOC – made clear, it was a good time for air conditioning sales, ice cream promotions, and demand response.