January 15, 2015

Resilient Power Equality: Providing Reliable Electricity Solutions to Everyone

By Lewis Milford, Robert Sanders

When it comes to reliable energy technologies to protect against power outages, there is a disparity between the haves and the have-nots. Call it “resilient power inequality.”

Today, some of the most innovative energy technologies used to protect against power outages can be found in high-end private companies such as financial data centers and banks. They have the money to protect economic transactions from power outages and to invest in expensive technologies like fuel cells and fly wheels. They don’t rely only on diesel generators to protect their critical electric loads in storms or severe weather events.

In affordable housing, senior centers, and assisted-living facilities, it’s a different story. Ironically, where there is the greatest need to protect people from severe weather and power outages, the technologies used are usually second-best. You find outmoded diesel generators, or nothing at all, to protect the most vulnerable from the damaging effects of power outages.

While the inconvenience, disruptions and dangers of power outages are well known, what is not often realized is the disproportionate impact of power outages on low-income and vulnerable populations. These communities include elderly and disabled citizens who rely on electricity for survival, such as power that is needed for elevators, mobility equipment, refrigerating for medicines, heating and cooling systems, respirators and to pump water for buildings taller than two or three floors. These vulnerable populations have more difficulty responding and recovering from the destruction caused by extreme weather events and related power outages. At the same time, they are frequently left out of advances in modern power-protection technology such as renewable energy and energy storage that make clean, resilient power possible.

But this story is changing in several important ways.  Some recent developments involving solar and energy storage suggest that states and municipalities have begun to embrace resilient power as a public good that should be available to all.

We can provide reliable, resilient power to critical facilities and vulnerable populations by using clean, distributed generation, such as solar PV, together with energy storage. These “resilient power” systems can withstand storms, and they can continue to supply needed power when the larger grid goes down.  (See “Resilient Power: Evolution of a New Clean Energy Strategy to Meet Severe Weather Threats.”)

Some resilient power applications require significant storage capacity to cover critical electric loads for water treatment facilities and refrigeration for food distribution centers. But other applications require only modest energy storage capacity and can be combined with energy efficiency measures. For these facilities, only a limited amount of resilient power may be needed to power critical lighting, air conditioning and medical/communications equipment. If designed properly, solar and storage technologies can allow residents to shelter in place in times of extended power outages, thus reducing the demand on overwhelmed first responder and emergency shelter services when the power goes out.

One good sign that we are starting to see is strong interest from developers and owners of affordable housing, elderly, and assisted-living facilities to develop solar and storage projects to protect the most vulnerable among us. If this trend takes hold, we could see the benefits of reliable, resilient, clean energy technology innovation make their way to those who need it the most.

Clean Energy Group is engaging with affordable-housing and other developers in major cities across America to team up with solar storage developers to ensure that critical building loads are covered when the power grid fails. (See www.resilient-power.org for more info.) We also see interest from city officials to bring solar and energy storage systems to police and fire facilities, schools, and community emergency centers. States like Massachusetts are funding resilient power projects to ensure uninterrupted critical community services during outages (see our recent blog on this topic here).  CEG staff is working with city leaders to conduct city-wide implementation strategies to develop resilient power projects involving critical community service facilities. We also see owners and developers of supportive housing in discussions to incorporate solar storage in their portfolio of buildings.

All of these projects start by identifying which critical loads absolutely need to have power during an emergency, what the maximum power draw is for each critical device, and for how long the critical loads need to be covered. A range of financing options are identified once the project development team has prepared a detailed project budget, an operating plan and financial pro forma.

It’s important to note that many of these resilient power projects are structured with no up-front costs to the building owner. This can happen because important new FERC rules provide battery storage systems with revenue streams for grid services, and that revenue can be used to help finance more resilient buildings (see our recent webinar on this topic here).

A key question facing project developers and other stakeholders is how to get to scale: can an efficient finance mechanism be created to incorporate resilient power in affordable multifamily housing and community facilities across communities, and across the country?  Right now, all of these projects are being developed with “one-off” project financing.

CEG is working on a new finance strategy to begin to address that question through project aggregation. It would create a credit facility that would “warehouse” many resilient power transactions to be bundled (or securitized) and sold to investors. For a scalable financing strategy to work, there needs to be successful project aggregation. Multiple project pipelines need to be identified involving solar and energy storage developers, as well as affordable housing, community development and related financial intermediaries.  We would like to connect with more municipal leaders and developers across the country who want to learn more about how these systems can better protect communities.

The good news is that more communities are beginning to plan and build resilient power projects to protect their low-income and vulnerable populations from power outages, broadening access for all members of their community to equal resilient power opportunity.

For more information on this topic, see Clean Energy Group’s 1/30/15 webinar “New Initiatives in Community Resilient Power.”

Photo Credit

Dan Nguyen, via Flickr

Associated CEG Initiative(s)

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