Advanced Energy Perspectives

As momentum builds for clean energy, the Western states are leading by example. From California to Colorado, Washington to New Mexico, states have set ambitious goals, and are now starting to figure out how to meet them. Suddenly, the notion of a regional power grid, instead of the electric power system managed state by state, has growing appeal in the independent-minded West. Could regionalizing the grid help these states reach their goals? And if so, what would a regional power market look like? AEE has put forward some principles to contribute to the conversation. 

After a landmark first year in office that included passing legislation on pension reform and recreational cannabis as well as putting a new state income tax proposal on the ballot this November, Illinois Gov. JB Pritzker seemingly tackled every major item from his 2018 campaign agenda, with the exception of passing comprehensive energy legislation. But maybe not for long. In his State of the State address on Wed., Gov. Pritzker said, “Our spring agenda must address the pressing issue of adopting new clean energy legislation that reduces carbon pollution, promotes renewable energy, and accelerates electrification of our transportation sector.” In adding that he would not “sign an energy bill written by the utility companies,” he was also giving a sign of the potential for broad stakeholder input – and AEE is already ahead of the game.

If you’re looking for big trends to watch in electricity markets, there’s no shortage these days. Some are broad policy issues, like the growing number of states targeting 100% clean grids (definitions vary but they are all directionally similar). Others are being driven by technology innovation, such as the continuing price declines for renewable energy and batteries. Some have a strong consumer focus, like smart thermostats and electric vehicles. Others are downright wonky, like the ongoing challenges related to the participation of distributed energy resources (DERs) in organized wholesale markets, or how states are trying to modernize the utility business model for the 21st century. One that we’ll look at today is how state policies to achieve 100% clean grids affect resource adequacy – that is, ensuring there is sufficient generating capacity to meet demand at all times.

Last August, thunderstorms in the United Kingdom triggered a loss of power generation that left 1.1 million consumers fumbling for a flashlight. As trains halted and traffic slowed, 475 MW of energy storage began discharging. A combination of batteries and other generators worked together to take 1 GW of demand off the system. In less than four minutes, grid frequency was returned to normal and power returned to customers. Blackouts are not particular to the UK. According to the U.S. Energy Information Administration, Americans lose approximately $150 billion to power outages each year. What’s less common is the use of advanced energy technologies like energy storage and distributed energy resources to increase reliability and keep the lights on. But that could change, if these technologies were allowed to compete in wholesale electricity markets on the basis of price and performance. Two new market briefs from AEE demonstrate why they should.

This is a guest post by Adam Scheer (Recurve), Jake Millette and Olivia Patterson (Opinion Dynamics), and Julie Michals (E4TheFuture)

Driven by advancing technologies and by policies that are evolving to both mitigate and adapt to climate change, the energy industry is changing at a breakneck pace. On the demand side, our fundamental challenge is moving beyond siloed programs into scaled demand flexibility to achieve states’ priorities such as grid resilience, resource adequacy, and decarbonization, amidst increasing electrification. Critically, scaling distributed energy resources (DERs) to meet a host of policy goals will require that we leverage limited ratepayer dollars to cultivate as much energy efficiency (EE) and other DER investment as possible. The question is: are cost-effectiveness (CE) testing practices developed decades ago adequate to guide our industry investments today? In our experience, legacy CE practices are inhibiting both innovative program designs and commonsense best practices for putting ratepayer dollars to optimal use.