Pairing Energy Storage Solutions with Offshore Wind Development

Author: Valerie Stori, Clean Energy Group | Project: Offshore Wind Accelerator Project

osw blog photo march 2016Energy storage incorporated into renewable energy projects can have multiple benefits for transmission systems and the projects themselves. Such solutions have been proposed alongside grid-scale land-based wind and solar projects, whose intermittent generation and off-peak power production don’t necessarily align with load demands. Energy storage solutions can buffer intermittency and eliminate renewable energy curtailment, while providing dispatchable power.

Offshore wind (OSW), whose peaking generation closely coincides with peak load demands on the U.S. East Coast, is often proposed as renewable energy technology that can complement solar’s intermittency. While the East Coast OSW resource is coincident with peak-time electricity demand (though capacity is reduced during summer months), OSW is still unpredictable and intermittent. Incorporating energy storage solutions with OSW projects can have multiple benefits. In late 2015, Deepwater Wind, the offshore wind developer building the nation’s first OSW farm off Block Island, proposed adding energy storage to its projected Deepwater ONE project off the coast of Long Island. Last week, Statoil, a Norwegian oil and gas company building the world’s largest floating OSW farm, announced that it is piloting battery storage at this pilot floating OSW farm.

Deepwater Wind has proposed battery storage from Current, a GE startup that combines GE’s energy storage, solar, and LED businesses. Deepwater ONE would use two lithium-ion battery storage facilities on Long Island to store 15 MW of energy. Deepwater expects the storage solution to eliminate the need for larger, costly transmission cables, thereby improving the value of wind energy for both the company and Long Island.

Statoil’s Batwind pilot project will incorporate a lithium-ion battery with its 30MW floating OSW farm. The pilot is being developed in cooperation with the Scottish Government, the Offshore Renewable Energy Catapult, and Scottish Enterprise. The company hopes to optimize the energy from OSW to the grid, improving reliability and cutting costs.

Both Deepwater Wind and Statoil proposed energy storage systems as cost-effective solutions for their OSW projects. The addition of storage eliminates the need to build large, costly transmission cables engineered to transmit peak power levels; instead, the cables can be built to accommodate average loads. In addition, incorporating energy storage solutions into OSW developments would have the same benefits as it does for other renewable energy systems:

  • Load stabilization—energy storage technologies store off-peak power and provide power during periods of high demand (and high costs). This on-demand power balances the grid and reduces reliance on older, inefficient fossil-fueled plants during peak demand times.
  • Increased Value—Energy storage can discharge electricity when prices are at their highest.
  • Dispatchability—Any excess electricity produced by an offshore wind project can be stored and used when other generation is low or demand is high.

Although pairing energy storage with intermittent renewable energy resources has many grid and climate mitigation benefits, the economic value of pairing energy storage with offshore wind depends on many factors such as load conditions and power generation availability. On the east coast, proximity to load centers and peak-power coincidence need to be considered, as well as the availability of other peaking resources, market forces, and project economics. A detailed cost study of energy storage solutions for east coast OSW would help address the costs and benefits of pairing storage with OSW. The great promise of offshore wind, and its potential additional benefits when paired with energy storage, make this an idea worth pursuing.

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This blog post was also published in Renewable Energy World.

Can Storage Rescue Solar?

Author: Todd Olinsky-Paul, Clean Energy Group | Projects: Energy Storage and Climate, Resilient Power Project

blogphotomarch2016Recently, solar advocates and industry celebrated the renewal of the federal ITC, which will continue to provide significant economic support for solar. On a state and local level, however, the outlook seems less rosy. A number of states have made recent changes to their net metering rules (a GTM article reports that more than half of US states are studying or changing their NEM policies) and in many cases, these changes will not benefit solar customers. In addition, numerous utilities in areas with high solar penetration have reached or are about to reach their net metering caps, and many have proposed additional fees or demand charges on solar customers to help meet fixed costs. An example of state regulatory changes recently in the news:

  • Hawaii has shut down its net metering program, replacing it with a system of billing minimums and less lucrative grid-supply contracts
  • Nevada changed its net metering rates retroactively, reducing revenues not only for new solar customers but also those who invested in solar systems under the previous rules and have now had the economic legs cut out from under them – an exodus of solar suppliers out of the state is now underway
  • Arizona has approved fees on solar customers and appears to be on the cusp of a retroactive reduction in NEM rates similar to Nevada’s
  • California extended net metering, but added fees for solar customers and is requiring a change to time of use rates
  • Massachusetts has allowed its SREC program to expire, though it is expected to be renewed; utilities in MA have either reached, or are nearing their net metering caps

As shown by the above examples, the solar outlook is suddenly appearing cloudy in a number of states where the technology has achieved its highest rates of penetration. The combined impact of reduced net metering revenues, plus added utility fees and demand charges, is undermining the value of both new and existing solar systems; at the same time, recognizing that solar has “arrived” as a mainstream product, states across the nation have been reducing or eliminating solar incentives.

The interesting thing is that behind the meter energy storage can help to stave off the devaluation of solar by addressing many of the issues listed above. For example, storage can help solar customers to capitalize on TOU rates, rather than losing NEM revenues because of them; can expand self-consumption where net metering is limited; and can help customers avoid costly demand charges by reducing power purchases at times of peak demand. None of these benefits are possible with solar alone – they require the addition of battery storage to make the solar resource dispatchable.

From the utility perspective, behind the meter storage should be viewed as an opportunity as well. After all, the more storage is paired with solar, the more control we will have over solar’s variable output, which is the main issue utilities cite for limiting the amount of solar on their networks (a potential $2 billion in lost revenue to conventional generators from rooftop solar is rarely mentioned). The more forward-looking utilities are even investing in small behind-the-meter storage systems at customer sites, which they can use to provide grid services and cut costs, while providing resilient power and other services to the host.

Unfortunately, the majority of utilities seem to be either neutral or negative on the question of distributed energy resources in general, and solar in particular. As Rocky Mountain Institute predicted more than a year ago, the more utilities try to decrease incentives and add fees for solar customers, the more incentive these customers will have to invest in storage, as a way to protect the value of their solar investment and further reduce their reliance on grid-purchased electricity.

The economics of solar and storage will play out differently in different markets and under different utility tariffs. For a discussion of the opportunities this could create in the multifamily affordable housing market, see “Efficiency, Solar and Storage Offer a Unique Opportunity to Bring Clean Energy to Affordable Housing” by Wayne Waite and CEG President Lewis Milford.

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This blog post was also published on Renewable Energy World.

From Efficiency to Energy Storage: A Third-Generation Strategy for Affordable Housing

Authors: Lewis Milford, Clean Energy Group, and Wayne Waite, California Housing Partnership | Project: Resilient Power Project

Photo Credit: Bright PowerRhone Resch, the president of the solar industry’s national lobbying group SEIA, said recently that “storage is the missing piece of the puzzle” for the future of solar PV. As net-metering policies evolve, as they have in California, Nevada, and Hawaii, battery storage offers an important pathway for maintaining and enhancing the value proposition of energy investments like solar PV.

This is so for all utility customers, but especially those in multifamily affordable housing where there has been a recent push for increased solar installation.

The reason is simple. Energy storage empowers solar PV owners to take control of the energy they produce, while also adding valuable flexibility to the electric power system. But that is important for a simple reason –it saves low-income tenants and developers more money, potentially lots of it.

After over 40 years of promoting energy efficiency and a decade of promoting solar PV in affordable housing, clean energy advocates working in this sector are considering what the next steps should be for further reductions in energy costs for low-income tenants. The next steps will require more integrated strategies that enable property owners to better manage energy demands, improve the financial outcomes of energy investments, and create more resilient and sustainable affordable housing. Many advocates believe that energy storage must be a significant component of this future.

Just as adding solar PV delivered a more expansive strategy than energy efficiency alone, energy storage technologies could emerge as the third-generation strategy to achieve cost reductions and extend energy benefits to low-income communities.

At a time when the declining costs of solar PV make clean energy technologies more accessible to low-income households, utilities and regulators are taking steps to reduce the value of solar generation by lowering net-metering rates, altering electricity rate structures, or placing additional charges on solar customers. Left unaddressed, the “clean energy divide” will continue to challenge low-income households’ access to clean and affordable energy.

When installed with PV systems at multifamily affordable housing, energy storage can capture solar savings and shelter system owners and/or tenants from changes in utility rate structures and cost fluctuations. Preserving the value of solar that is installed in low-income communities is especially important for the economically disadvantaged and those on fixed incomes.

Battery storage can even make solar energy more valuable and provide new sources of revenue to affordable housing developers, which they can then pass on to their tenants. In addition, combined solar and storage technologies, when properly configured, have the ability provide clean, reliable power during utility outages.

To this end, California enacted Assembly Bill 693 in 2015, which established the Multifamily Affordable Housing Solar Roofs Program. This program requires that individual tenants receive direct economic benefits from the solar systems installed, which is possible though California’s Virtual Net Metering program. This represents the first time in the U.S. that state funding could provide incentives for owners to install solar PV, energy storage, and energy efficiency all in one package to directly benefit tenants in multifamily affordable housing by lowering their electric bills. But this will happen only if California policymakers get the right structures in place to support the delivery of this comprehensive and integrated clean energy strategy.

In the next few months, Clean Energy Group, along with its California partners, will build upon the strong economic case for solar+storage in California affordable housing. Early economic analysis suggests both tenants and developers can substantially reduce their electric bills by adding energy storage to solar PV systems. Additionally, in the coming months we will look at how developers can finance these systems. And then we will show how energy storage makes even more sense in locations where solar subsidies might decline and where storage is needed to enhance the value of solar systems over the next decade.

In the end, the addition of energy storage to solar PV systems is a good policy choice; and one that should be included in the implementation of AB 693. Getting this policy right by integrating solar with battery storage and energy efficiency could create a national model to help close the clean energy divide and enable solar+storage technologies to benefit all Americans.

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This blog is based on “Efficiency, Solar and Storage Offer a Unique Opportunity to Bring Clean Energy to Affordable Housing,” written by Wayne Waite and Lewis Milford and published in Greentech Media on March 23, 2016.

Photo Credit: Bright Power

An Unexpected Renewable Energy Trend

Author: Warren Leon, Clean Energy Group | Project: Clean Energy States Alliance

blogphoto-green-city-innovationOver the past three years, numerous news stories have highlighted efforts to roll back state renewable portfolio standards (RPSs), which require electricity suppliers to get an increasing share of their electricity from clean sources. Anti-RPS legislation has been introduced in many states and some state legislatures have held high-profile debates over the merits of retaining their RPS. A few states have weakened or ended an RPS. It would be easy to assume that RPSs, which have fostered renewable energy development in 29 states and the District of Columbia, are in decline.

However, in contrast to this narrative, most of the significant RPS actions that states have taken have been in the opposite direction. New and strengthened RPS laws and regulations will lead to many times more renewable energy generation than will be eliminated by RPS-weakening legislation.

The state of Kansas took the last major anti-RPS action in May 2015, when it switched from an RPS mandate to a non-binding goal. But that same month, Hawaii and Vermont committed to dramatically expand renewable generation through an RPS. The Hawaii legislature overwhelmingly passed a bill increasing the state’s mandate to 30 percent in 2020, 70 percent in 2040, and 100 percent in 2045.

This made Hawaii the first state with a 100 percent RPS and turned it into a primary testbed for figuring out how to safely and reliably integrate very high proportions of intermittent generation and distributed energy resources, especially solar, into a utility grid.

Vermont had been the only state in New England without an RPS. Its new Renewable Energy Standard requires utilities to get 75 percent of their electricity from renewables by 2032. Much of it will come from Canadian hydro, which is already a major energy source for the state. The standard will also lead to the development of more than 400 megawatts of distributed renewables, a large amount for a small state.

In October 2015, California Governor Jerry Brown signed a law requiring that state to get half of its electricity from zero-carbon renewable sources by 2030, a goal he had set out earlier in his annual State-of-the-State speech. The legislation also included interim targets of 40 percent by 2024 and 45 percent by 2027. The legislature felt comfortable adopting these ambitious goals, because the state’s utilities had easily met a 2013 target and were on track for meeting existing targets of 25 percent in 2016 and 33 percent in 2020.

Then, in December, New York Governor Andrew Cuomo directed the Department of Public Service to develop a Clean Energy Standard mandating that 50 percent of the electricity consumed in the state come from renewable energy in 2030. This goal had appeared in a 2015 State Energy Plan that was released in the summer, but the Governor’s directive began to move it into regulations.

According to the Public Service Commission staff, the standard will require the addition of 33,700 gigawatt-hours of new renewable generation by 2030. The staff issued a white paper with proposals for how to achieve the Clean Energy Standard and is advancing towards implementation.

Finally, on March 11, 2016, Oregon Governor Kate Brown signed legislation that will effectively eliminate coal from the electricity supply of the state’s major utilities by 2030. The law also increases the Oregon RPS from a pre-existing 25 percent by 2025 to 50 percent by 2040, with interim goals along the way, starting in 2025 with 27 percent. This legislation emerged out of discussions between the state’s environmental advocacy organizations and two largest utilities, which sought to avoid a proposed ballot measure that would have required even more dramatic action.

Of course, California, Hawaii, New York, Oregon, and Vermont have different demographics, economies, and politics than much of the rest of the country. But it is still impressive and noteworthy that states representing 20 percent of the nation’s population have made such significant new commitments to expand their use of renewable energy. They have shown confidence that an electricity system can rely primarily on renewables.

It is too soon to know how widespread the RPS strengthening trend will be, but there are already some positive signs. Last week, for example, the Maryland General Assembly approved legislation requiring a 40 percent reduction in economy-wide greenhouse gas emissions below 2006 levels by 2030. If Governor Larry Hogan signs it, it could very well lead to increasing the state’s RPS.

On the other hand, there is a possibility that some RPSs will sunset. Five states—Iowa, Michigan, Montana, Texas, and Wisconsin—have already reached their maximum RPS target. Eleven more states will reach theirs by 2021. Those RPSs will need additional targets and deadlines if they are to continue to motivate additional renewable energy development after that.

Although opponents of renewables have failed to roll back RPSs in most places where they have tried because the policies are popular with voters, they may have an easier time blocking RPS increases.

Although the future is necessarily uncertain, the actions of five states since last May have already given renewable portfolio standards more momentum and staying power than earlier news stories about rollbacks had implied. They show that the desire for more renewable energy generation remains strong.

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This article was originally published in Morning Consult. Read the original article here.