By Michael Kuser
GROTON, Conn. — As Northeast states continue to expand their clean energy goals, the region faces the prospect that multiple overlapping public policies will create an oversupply of renewable resources at certain periods.
“We’re very soon, even with the contracts we have in place, going to be in a position where our supply of contracted resources is going to exceed demand in some hours,” Katie Dykes, commissioner of the Connecticut Department of Energy and Environmental Protection (DEEP), said Wednesday at the 2019 New England Energy Conference and Exposition, hosted by the Connecticut Power and Energy Society and the Northeast Energy and Commerce Association.
Dykes noted that the Connecticut House of Representatives had a day earlier approved legislation (H.B. 7156) that would authorize DEEP to procure up to 2,000 MW of offshore wind resources over the next decade, “with a real focus on looking at a solicitation to be issued as soon as possible after the ink is dry on the governor’s signature.”
“It’s really an exciting time, [and] the question society has to be focusing on in the integrated resource planning process in Connecticut is how are we meeting resource adequacy with the public policy resources,” Dykes said. “We have to think about when we’re buying zero-carbon resources that are just displacing other contracted resources in certain hours, those benefits aren’t going to materialize in terms of meeting the carbon goals … and be reflecting that in our procurements.”
Many stakeholders are not that familiar with the technical aspects of offshore wind, so it’s important to have someone who can bridge that knowledge gap, said Michelle Morin, chief of the environment branch in the U.S. Bureau of Ocean Energy Management’s Office of Renewable Energy Programs.
“For example — the [OSW transmission] cable landfall. I get a lot of concerns that [it] will industrialize an area, so showing people what that will look like goes a long way,” Morin said.
The region’s switch from fossil fuels to wind, solar and storage is being driven by customer demand for cleaner energy, falling costs of new technologies and public policy, said Marc Montalvo, president of Daymark Energy Advisors.
“And the policy interests have many dimensions, like protecting the environment, building strong neighborhoods and communities, making sure the economy is robust,” Montalvo said. “It’s really interesting that we’re talking now about harmonizing markets and public policy, when the wholesale markets that we have in the region, and the way they’re organized, are themselves a response to public policy.”
Out of Market
Markets are very product-specific, and until recently the social science of economics was treated almost like a hard science, which created pejorative assumptions about what constitutes out-of-market actions or mechanisms, said Theodore Paradise, counsel and senior vice president for transmission developer Anbaric.
“Certain orders of market constructs have been protected because people thought that’s what they should do,” Paradise said. “But I think, again, not in 2030 but now, that we’re at the end of that paradigm. At this point, buyers are being told they can’t purchase what they want.
“And this is the proof that the bigger buyers and sellers that are outside this smaller market are really a market, because what do buyers do in a market when they’re being told you can’t buy that?” he said. “They go buy it elsewhere, and that’s what has happened.”
Paradise said the region has arrived at the point where buyers are making direct contracts for resources.
“It’s being conducted in a space that’s not out-of-market; it’s just a different market,” he said.
In addition to competitive contracts for resources, there will continue to be system dispatch, but buyers and sellers are having an impact there, too, he said.
“In the not-too-distant future, we’ll see a New England that has satellite control centers around the region that will become something more like distribution system operators … dispatching based on price, with a grid operator at the transmission level … to make that all work at the higher voltages,” Paradise said.
From a utility perspective, Avangrid’s vision would be to serve as the distribution system platform provider, or the smart integrator, said Rita King, senior director of smart grids innovation for Avangrid Networks.
“The smart integrator role really supports public policy and the region’s targets for climate change and deployment of clean energy,” King said.
David Ismay, a senior attorney with the Conservation Law Foundation, envisioned “an increasingly clean energy market” in 2030 run by Connecticut, Massachusetts and Rhode Island “with a seven-year price lock sufficient to mobilize capital for a range of zero-marginal-cost generators.”
Pentti Aalto of PJA Energy Systems Design asked, “Who is the customer? Is the state or the commonwealth the customer, and I’m just the bill payer? What happens if I find a cheaper way to get power and you’ve already contracted for me?”
Public policy resource choices are made by elected officials, so people can vote them out of office if they disapprove, Paradise said.
Day Pitney attorney Alex Judd highlighted the increasing incidence of billion-dollar storms in the U.S. — in the Northeast in particular — and noted that the Boston Planning and Development Agency last year released the Imagine Boston 2030 initiative focused on climate change, the first citywide plan in 50 years. (See “Climate Change is Here,” Overheard at NECA Environmental Conference 2018.)
“However we get to carbon neutrality, efficiency is going to be very important, because whatever renewables you’re substituting for fossil [fuels], you lower the total needed,” said Rick Malmstrom, senior energy manager for the Dana-Farber Cancer Institute in Boston.
Malmstrom pointed to another influential initiative coming out of Boston: the 2013 Building Energy Reporting and Disclosure Ordinance (BERDO), which mandated that any building more than 50,000 square feet must report all its energy usage.
“They do have the ability to fine, but they do not want to do that,” he said. “They want to help all building stock get to that kind of reduction [15% energy consumption cut over five years], so now they’re exploring pathways to compliance, such as requiring energy audits be performed, etc.”
Aimee Chambers, director of planning for the city of Hartford, said the city represents “a great example of being able to integrate energy into its large-scale decision-making” through a zoning overhaul and related planning processes.
“The city was most surprised to learn that people … really care about affecting the environment,” she said. “We’ve incorporated a lot into the [building] code with relation to energy. Our code offers density bonuses if buildings use renewable energy or co-generation.”
Hartford also allows building-mounted solar and wind “everywhere, and for those who produce big energy, we allow large-scale wind along our highways, and we also would welcome solar parking canopy development,” Chambers said, adding that the city requires electric vehicle charging stations for lots with space for 35 cars or more.
Louise Yeung, energy portfolio manager for the New York City Economic Development Corp. (EDC), highlighted the value of leveraging a large real estate portfolio, which in her case is 62 million square feet.
“Part of our goal is to generate income for the city to fund other programs and functions, but we also want to make sure we are doing this with clear policy objectives in mind,” Yeung said. “Sometimes those are jobs. In my portfolio’s case, we are looking at emissions reductions and looking at how energy investments can support broader climate targets.”
Most of the EDC’s income comes from leasing, so hosting on-site renewables or generation is a way to diversify the revenue stream and realize the full potential of the assets, she said.
Nithya Sowrirajan, director of global product solutions for Google, showed how her company is using geospatial data and technology to help cities track their carbon emissions and improve their planning abilities.
“San Jose, Calif., was able to look at solar potential for their city as seen today in Google’s Environment Insights Explorer and see that their roofs had [potential] capacity of 4 GW, and thus confidently set a target to be the first 1-GW solar city,” Sowrirajan said. “We started with a small set of cities to pilot our platform, which of course is easier to do in our backyard in California. But as a proud New Yorker, I’m excited to be here alongside fellow panelists from New York City and Hartford to speak about smart cities and to see how we can drive partnerships farther on the East Coast.”