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November 14, 2024

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Virginia Electrification Project Cuts Emissions, Utility Bills for LMI Customers

Eight low-and moderate-income households in Virginia could cut their greenhouse gas emissions by about 25% and each save hundreds of dollars as the result of a pilot project that provided home energy efficiency upgrades and swapped out natural gas heating and cooking appliances for electric ones.

The Community Climate Collaborative (C3) and the Local Energy Alliance Program (LEAP), both based in Charlottesville, Va., partnered on the project to weatherize and electrify the LMI homes, located in the city itself and surrounding Albemarle County. The pilot ran from 2019-2020, according to a recent webinar on the project.

“We were looking for [a way] to combine a climate solution with affordable energy,” said Caetano de Campos Lopes, director of climate policy at C3.

The project worked with local HVAC service providers who switched the eight homes from natural gas, kerosene and fuel oil to all-electric heating and water heaters, even replacing an old gas-powered clothes dryer with a new electric model. The local providers or LEAP worked on the stove replacements.

The main criterion for participation, according to Susan Kruse, C3’s executive director, was a qualifying LMI income—under $74,797, which is 80% of the state median income, based on figures from the Virginia Housing Development Authority. All the homes had weatherization and other energy efficiency measures completed either at the same time or up to a year before the electrification, Kruse said.

“An anonymous private foundation funded the electrification of the homes, but we also used state energy efficiency programming funds,” she told NetZero Insider in an interview. “LEAP was in charge and managed a team of private contractors. We were the main point of contact for the families, did data collection and will do advocacy” for state and local policies that will support similar projects, she said.

While small, the project hits on some big issues.

Virginia is targeting a 10% reduction in retail electricity consumption over 2006 levels by 2022, and the Grid Transformation and Security Act, passed in 2018, requires the state’s electric utilities to invest $1 billion in energy efficiency projects over a 10-year period.

The impact of these policies for LMI households could be significant. Low-income families pay more of their disposable income on energy, in some instances as much as three times more, than higher-income households, according to information from the U.S. Department of Energy. The national average for energy expenditures is around 3% of disposable income, according to a study from the American Council for an Energy Efficient Economy, while the DOE figures show low-income Virginians spend 6 to 8%.

“Higher income homes may have a larger footprint, but also tend to be more energy efficient,” Kruse said.

Uneven Results

At the same time, buildings and the construction sector accounted for 36% of final energy use and 39% of energy and process-related carbon dioxide emissions in 2018, according to global figures from the International Energy Agency. The EPA found residential and commercial buildings accounted for 13% of U.S. greenhouse gas emissions in 2019.

C3 estimates the eight homes could cut year-round GHG emissions by 25.7%, or 40,551 pounds. Two of the homes, which had been using heating oil, saw emissions reductions of 56.3% and 68.0% in the first quarter of 2021, while emissions reductions for homes that formerly used natural gas followed a less clear trend, with some actually showing small increases.

However, de Campos Lopes estimated that overall, the homes’ total GHG emissions over the next 20 years could decrease by as much as 2 million pounds.

Similarly, as with emissions, the impact of the upgrades and electrification on household energy costs were uneven, with some seeing major savings and others seeing modest increases. C3 said that the individual patterns of energy use and other factors in each home will need to be evaluated.

However, overall, the net present value of projected savings adds up to about $32,000 over the next 20 years, averaging $4,000 per household, de Campos Lopes said.

The uneven results for the homes switched from natural gas come at a time when home electrification has become a highly divisive issue in some states. More than 40 local jurisdictions in California have banned natural gas hookups in new construction, while 19 states have passed legislation, backed by the gas industry, barring municipalities from prohibiting or limiting access to natural gas or propane. For example, Florida bars its political subdivisions from taking “any action that restricts or prohibits … the types or fuel sources of energy production which may be used, delivered, converted, or supplied” by electrical utilities or suppliers of natural gas or petroleum gas.

On the other hand, larger environmental organizations have taken up the cause of clean energy, such as the Sierra Club with its “Ready for 100” campaign, which is advocating for communities across the country to adopt 100% clean energy goals.

Virginia has yet to see any action on natural gas hookups — for or against — at the state or local level. But, the Consumer Energy Alliance, an advocacy group representing a range of business and energy organizations, released a report in August claiming a natural gas ban in the state, requiring existing homes to be retrofitted, could cost individual households thousands of dollars.

C3 has noted that under Virginia’s Clean Economy Act of 2020, 41% of the state’s power will come from clean energy by 2030, with the state targeting 100% clean energy by 2050. C3 estimates that this ongoing transition to clean power could cut carbon emissions from the eight homes by 95% by 2040.

Kruse said that one of the key lessons learned from the project is that program flexibility is essential when upgrading low-income homes to electric. “It is critical to pair electrification with air sealing, insulation and other energy efficiency measures to maximize cost savings,” she said.For individual homes, the cost impacts of electrification varied widely.  | C3/LEAP

The savings for individual homes can vary widely, she said, but local and state policy can help ensure that electrification works for everyone.

Looking ahead, Kruse said that now that the initial work on the eight homes is done, C3 intends to “keep up with these families as much as they have the appetite for, so they continue to save money, and we can help them when necessary. We will also continue to advocate for local and state policy changes.

“More projects like this need to happen,” she said, but one problem is that Virginia’s state-sponsored energy efficiency programs don’t allow fuel switching work to be done with state funds. While in this project, private foundation money covered the gap, “that thinking needs to evolve,” she said.

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MISO IC Queue Tops 150 GW; Solar Maintains Lead

A record number of generator interconnection requests has ballooned MISO’s queue to 153 GW, the largest it’s ever been.

Developers this year submitted 487 proposals, doubling applications to 980, for approximately 77 GW of capacity. Were all the requests to be built, the 153 GW could handle MISO’s current systemwide summer peaks with about 30 GW to spare.

Staff said renewable projects account for about 64 GW of the new additions, with solar generation accounting for 63% of the total queue.

“Ultimately, we’ve had the largest set of requests come in in the history of our company,” Aubrey Johnson, executive director of system planning, told the Board of Directors’ System Planning Committee on Wednesday.

Johnson said prospective generators continue to struggle to connect to the grid. Historically, MISO interconnects about a fifth of the generation projects that enter the queue.

Johnson noted that in the past five years, MISO has tied in about 35 GW worth of new generation to its grid.

“In many ways, the queue still works,” he said. “It just wasn’t meant to handle the volume of requests we’re seeing today.”

A decade ago, MISO accepted just 12 GW worth of requests. By 2019, the amount of new requests had grown to 44 GW and then to 52 GW in 2020. Over the summer, the queue had dwindled to fewer than 80 GW and comprised approximately 500 projects.

“Know that we [are] rife [with] activity in the online queue portal,” Manager of Resource Utilization Jesse Phillips told the Interconnection Process Working Group (IPWG) in July.

MISO said the monstrous queue further validates its long-range transmission planning, which is partly intended to better connect renewable-rich areas of the footprint to the system.

“The majority of the … applicants are trending in line with meeting future clean energy goals set by our members and stakeholders,” Andy Witmeier, director of resource utilization, said in a press release. “As intermittent resources become more prevalent, the need for our long-range transmission planning efforts is reinforced to address potential operational challenges in the future and leverage our large regional footprint and resource diversity.”

Global consulting firm ICF recently found that interconnection customers in MISO and SPP exclusively fund interconnection upgrades that have broader benefits for their systems. (See Report: Renewable Developers Footing Tx Upgrade Bills.)

MISO said the 2021 group of proposals marked the first time that requests for energy storage interconnections outstrip requests for wind generation interconnection. MISO processed 44 GW worth of solar requests, 12 GW of storage and a little more than 9 GW in wind requests.

“We anticipated this shift towards more renewable technologies as a replacement for retiring conventional generation across the footprint, and we expect it to accelerate in the future,” Witmeier said.

The surge in storage requests come as MISO is readying its market platform to host storage offers by mid-2022. (See MISO: No Choice but to Double Up on 841 Compliance.)

MISO said it will share more details about the record-breaking interconnection cycle during its IPWG meeting on Monday.

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Barrasso Prods FERC on Pipelines, SEEM

Sen. John Barrasso (R-Wyo.) sent a letter to FERC Chairman Richard Glick on Wednesday calling on him to speed up the processing of several matters in front of the commission, including approval of multiple gas pipeline projects and the proposed Southeast Energy Exchange Market (SEEM) (ER21-1111, et al.).

Barrasso, the ranking member of the Senate Energy and Natural Resources Committee, noted “what appear to be irregularities in the processing of important proceedings” in the commission’s electricity and natural gas dockets. The senator cited several specific cases to illustrate his concerns, with specific questions about each in an appendix.

Environmental Studies Push Back Pipelines

In the first section of the letter, Barrasso criticized FERC for notices it issued May 27 in several natural gas certificate proceedings: North Baja Pipeline (CP20-27), Iroquois Gas Transmission System (CP20-48), Tennessee Gas Pipeline (CP20-493), Columbia Gulf Transmission (CP20-527) and Adelphia Gateway (CP21-14).

These notices announced that FERC would prepare an environmental impact statement (EIS) for each project, delaying their approval; Barrasso said similar notices have since been issued in “more than a few other pipeline certificate proceedings,” while the Iroquois project was further delayed on Sept. 2.

The senator said the commission’s actions “indicate that [FERC] is now requiring an EIS in all certificate proceedings and extending schedules for environmental review,” contradicting Glick’s letters of May 21 to Barrasso and other senators in which the chairman said FERC would “not wait to act on certificate applications” for natural gas projects. Barrasso expressed concern about “the imposition of new and as-yet-undefined requirements on certificate applications already under review.”

In the appendix, Barrasso asked FERC for a chart showing the status of certificate applications currently under review, the dates they were filed, and their current stage of review, along with the relevant standard of review and how applicants have been notified of changes to the standard. He also asked whether the commission has “adopted a generally applicable requirement for an EIS regarding gas pipelines,” and if not, why the May 27 and subsequent notices were issued.

In addition, Barrasso questioned whether there are any laws requiring the commission to consider downstream or upstream greenhouse gas emissions of a particular project before issuing a certificate, and how FERC will meet the requirements of the Natural Gas Act to “encourage the development of plentiful supplies of natural gas at reasonable prices” if it does begin to enforce such consideration in the future.

‘Timely Resolution’ Urged on STL Pipeline

The letter’s second section concerns the Spire STL Pipeline, a 65-mile natural gas pipeline for which FERC approved a certificate of public convenience and necessity in August 2018 (CP17-40). Earlier this year the D.C. Circuit Court of Appeals ordered the certificate vacated, saying FERC failed to balance the benefits and adverse impacts of the project. (See DC Circuit Slaps FERC on Pipeline GHG Analysis.)

While FERC granted a temporary certificate for the project on Tuesday “to ensure continuity of service for a limited period while the commission considers appropriate next steps,” Barrasso questioned “why the commission did not act sooner or more definitively to address the issues in this proceeding.” In addition, the senator said that it’s not clear whether FERC is “on a path to a timely resolution of this matter” that will ensure adequate gas supplies in St. Louis during the upcoming winter months.

Barrasso also criticized FERC for setting a 60-day comment cycle on STL’s emergency certificate application, which was submitted July 26. The commission said on Aug. 6 that comments on the application would be due Sept. 7, with reply comments due Oct. 7. Calling this schedule “curious” in light of the “urgent concern” of citizens of the impacted area, the senator asked whether such a comment cycle is common for this kind of emergency application.

Commissioner James Danly dissented in FERC’s latest order, calling it an “unlawful commission response to the judicial vacatur of a certificate, itself a chastisement for our failure to adequately explain our decisions.”

SEEM Delay Questioned

In the final section, Barrasso pushed FERC to move faster on approving SEEM, the planned expansion of bilateral trading in 11 Southeastern states that proponents claim will reduce trading friction while promoting the integration of renewable resources such as wind and solar.

FERC has issued two deficiency letters regarding the proposal this year: the most recent one was in August, 60 days after SEEM’s supporters responded to the commission’s first such notice. (See SEEM Members Push for FERC’s Decision on Market Proposal.) This second letter asked just three questions, prompting Barrasso to ask why it took so long to submit such an apparently simple inquiry. He said “the public record” suggests that FERC is “unnecessarily delaying or impeding” utilities’ attempts to improve the functioning of the wholesale energy market.

“Without speaking to the merits of this particular proposal, I am in favor of voluntary efforts of this type,” Barrasso said. “By allowing incremental voluntary improvements, the commission can enable continuous and orderly market and facility development. Proceeding in this way is time-tested and has enabled the world’s most extensive array of electric infrastructure largely paid for by equity and debt investors to be deployed in the United States.”

FERC may be close to action on the proposal: The sunshine notice for the commission’s meeting next Thursday lists it as the first item in the electric section.

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Entergy Fends Off Calls for Tx, Solar, Microgrid Investment

Entergy is pushing back against suggestions that sturdier transmission infrastructure and more solar panels or microgrids would have helped the coastal Louisiana grid better endure hurricanes. 

Entergy Louisiana CEO Phillip May said neither transmission reinforcements, solar generation, nor microgrids would have made for a nimbler restoration in New Orleans after Hurricane Ida. The company has been pressured on those points following the total blackout of the city after the hurricane’s strike last month. (See Experts Call for Tx Reinforcements, Microgrids in Gulf System After Ida.)

“The damage to our grid is driven by a storm that was nearly a category five. It is the second strongest storm to ever strike Louisiana,” May said during a Friday press conference. “The reason we have these outages … is because Mother Nature is the undisputed world champion. We can engineer some of the most robust structures, and Mother Nature will simply take those out in storms like this.”

He said Entergy has invested in a hardy system and continues to make infrastructure improvements. 

“However, we have to balance the fact that perhaps a third of our customers are at or below the poverty level,” May said, adding Entergy cannot trade reasonably priced energy for clean and more localized energy. “Ideas like solar panels and microgrids certainly have their place, but we have to ensure they’re affordable,” he said. “In my mind, the notion that we haven’t invested in our grid is just flat wrong. The data refutes it. We are interested in microgrids and in adding solar.” 

May said Entergy will have “enhanced infrastructure” where complete rebuilds are needed, as is the case with the transmission tower that toppled along the Mississippi River.

“But even with that, we know that there will always be a storm that can take out that infrastructure, whether it’s microgrids or the robust infrastructure that we continue to build,” he said. 

In an emailed statement, Entergy said it will step up hardening and resiliency investments as climate impacts become more pronounced.

“While ensuring the resilience of our infrastructure has always been a primary focus, we recognize that we must accelerate our efforts in light of increasingly frequent and severe weather events,” the company said. “We will continue to refine our understanding of where the specific risks attributable to climate change are expected to become more severe in the years and decades ahead and focus our hardening efforts accordingly.”

Entergy pointed out that since 2016, it has completed $12.6 billion in transmission and distribution construction and has recently spent about $1 billion systemwide to upgrade plants and substations so they can better withstand hurricanes.

During a Sept. 9 media call, Entergy New Orleans CEO Deanna Rodriguez praised the new, natural gas-fired New Orleans Power Station, which she said performed “brilliantly” following Hurricane Ida. 

“This is the plant that allowed first light to New Orleans nearly 48 hours after the storm,” Rodriguez said.

Critics have cast doubt on the plant’s black start capabilities, since Entergy opted out of starting the power station without first establishing a transmission link to the Eastern Interconnection. (See Entergy Touts Restoration; NOLA Leaders Question Lack of Blackstart Service.) More than 500,000 customers remained offline amid triple-digit heat indexes in Louisiana the week after Labor Day.

MISO Vice President of System Planning Jennifer Curran said Entergy’s transmission system withstood the storm better than in past hurricanes. She said the utility’s distribution system, however, took a more punishing hit.  

Curran said as of Sept. 15, all major transmission has been restored except for a few towers that were directly in the storm’s path.

“At this point, neither transmission or generation are limiting the restoration of load,” Curran said during a Wednesday System Planning Committee teleconference of the MISO Board of Directors.

But Ida’s fallout may force Entergy to reckon with climate-change activists. They had harsh words for Entergy last week during a press conference hosted by the Gulf Coast Center for Law and Policy (GCCLP).

The group’s executive director, Colette Pichon Battle, said she is a resident of St. Tammany Parish on the north shore of Lake Ponchartrain.

“I’m calling in from Texas because my family, like so many others, is still evacuated from southern Louisiana,” she said.

Pichon Battle said Ida’s landfall on the 16th anniversary of Hurricane Katrina is an “eerie reminder” that climate change is affecting the Gulf of Mexico’s coastal regions now.

“The energy infrastructure is not built to withstand climate change,” she said of the Entergy grid.

Jessica Dandridge, executive director of the Water Collaborative of Greater New Orleans, said she rode out the storm, but was then forced to stay with friends in Mississippi and then Michigan.

Dandridge said the failures of Entergy, a Fortune 500 company with billions in earnings, were unacceptable. She urged others to push utilities on grid resilience and renewable energy, pointing to residential rooftop solar and microgrids.

“We have given everything, all our savings … our homes, our family heirlooms,” she said, saying it was time for the utility to invest in the community.

“We as a nation cannot take the same approach,” said Jennifer Crosslin, with both Southern Communities for a New Deal and GCCLP. “This moment calls for our nation do something it never has really done before.”

Crosslin said climate justice and climate equity have become “hollow promises” from southern leaders.

In 2019, Entergy New Orleans was resistant to the city council’s resilient renewable portfolio standard requiring net-zero emissions by 2040 and 100% clean energy by 2050. It threatened to sue New Orleans if it was forced to prematurely retire generation resources.

“… [A]ny standard adopted in this proceeding that would require [Entergy New Orleans] to retire council-approved resources before the end of their useful lives, or that would penalize [it] for operating those resources in a manner consistent with prior council approvals, would be unenforceable and lead to litigation,” the utility warned in late 2019.

Entergy said New Orleans’ renewable portfolio and climate resilience standard would lead to “needless rate increases” that would cause the “entire regional economy to suffer.”

New Orleans approved the RPS in May after two years of negotiations.

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WAPA Desert Southwest Region to Join Western EIM

The Western Area Power Administration’s Desert Southwest Region (DSW) signed an implementation agreement Wednesday to join CAISO’s Western Energy Imbalance Market (WEIM), making it the second WAPA region to seek entry to the market in recent years.

DSW has been working with its customers for two years to “determine the most beneficial course of action for us and for our customers,” WAPA Administrator Tracey LeBeau said in a joint statement with CAISO on Thursday.

“Joining the EIM will support DSW’s ability to economically market and dispatch energy on a timely basis and meet the needs of our customers,” LeBeau said. “We look forward to working with the ISO and our partner utilities to implement the EIM in our balancing authority and take advantage of the many resources and flexibilities the EIM offers.”

WAPA’s Sierra Nevada Region, part of the Balancing Area of Northern California, became an active WEIM participant in April. (See Expansion Takes EIM into LA, New Mexico.) Parts of WAPA’s Upper Great Plains West and Rocky Mountain regions decided to join SPP’s competing Western Energy Imbalance Service (WEIS), which launched in February. (See WAPA, Basin, Tri-State Sign up with SPP EIS.)

The implementation agreement also applies to WAPA’s Western Area Lower Colorado Balancing Authority, which includes generating resources in the Boulder Canyon and Parker-Davis projects (PDP) and the transmission systems of the PDP, Central Arizona Project and the Pacific-Northwest-Pacific Southwest Intertie Project.

DSW sells federal hydroelectric power and provides transmission service to dozens of cities, electric cooperatives, Native American tribes, government agencies and irrigation districts. One of its customers, the Arizona Electric Power Cooperative (AEPCO), includes six distribution cooperatives and five public power entities that serve more than 420,000 residential, agriculture and corporate customers.

“Joining the Western EIM will ensure AEPCO and its members have real-time access to a much larger regional energy market,” Jon Martell, AEPCO executive director of energy services, said in the joint statement.

Other participating BAs include the Central Arizona Water Conservation District, Southwest Public Power Agency and DSW customers in Arizona, Southern California and southern Nevada.

“We are very pleased to welcome the WAPA DSW region and the Arizona Electric Power Cooperative to the Western EIM,” CAISO President and CEO Elliot Mainzer said in the statement. “I appreciate the thoughtfulness that went into their decision and look forward to working together to create additional economic and environmental value for their constituents and the broader EIM community.”

The WEIM now has 15 active participants in 10 Western U.S. states and part of British Columbia. Eight more entities are set to join in 2022 and 2023, potentially encompassing 84% of electric demand in the Western Interconnection. By allowing low-cost energy to be bought and sold in real time across state lines, it has provided more than $1.4 billion in benefits to its members since launching in 2014, according to CAISO.

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Vermont Senator Says State Needs Formal Environmental Justice Policy

When the Vermont General Assembly reconvenes its 2021-2022 session in January, Sen. Kesha Ram Hinsdale will continue to push for passage of a state environmental justice policy bill she introduced in the spring.

“We cannot advance the proposals that will come out of the [state’s] Climate Action Plan without having an environmental justice policy framework that has distributive justice, procedural justice and other forms of justice built into it,” Hinsdale said Wednesday during the Energy Action Network’s annual summit.

Hinsdale first introduced an environmental justice bill in Vermont 14 years ago, but the state has not codified an official policy on the issue yet. The state’s 2020 Global Warming Solutions Act (GWSA), which stood up the Vermont Climate Council and tasked it with creating a climate plan, calls for the plan to benefit all residents equitably.

If passed, the new bill (S. 148) would direct state agencies to develop a state mapping tool to measure environmental justice impacts at the local level. The bill, Hinsdale said, is similar to her 2007 bill, but the tools available to the state and legislators have changed for the better.

“The [U.S.] EPA now has a major focus on environmental and climate justice and resilience, and that’s where resources will be funneled,” she said. “EPA told [Vermont leadership] in 2015 that we’re behind in not having an environmental justice policy framework on the books.”

The agency’s environmental justice screening tool, she added, now includes flooding data, which will be helpful for Vermont’s understanding of distressed and environmentally impacted communities. When Tropical Storm Irene hit Vermont 10 years ago, mobile home park residents made up 8% of the state population but 40% of those affected by flooding.

The bill would also create an Advisory Council on Environmental Justice within the Vermont Agency of Natural Resources (ANR), which is also tasked with implementing strategies that will be adopted in the pending Climate Action Plan.

“While I’m sad that we’re not in a different place after 14 years trying to advance environmental justice policy in the state, we have the ANR, Department of Health, Agency of Transportation and other partners at the table to really look at how we advance a meaningful environmental justice policy now,” Hinsdale said.

The legislature referred the bill to the Senate Natural Resources and Energy Committee in April.

Clean Heat

After the General Assembly’s break, Sen. Andrew Perchlik says he will be looking for support for a bill (S. 146) he introduced in April to ban new fossil fuel heating systems in Vermont’s state buildings.

The bill is a “no-brainer,” Perchlik said during the summit.

“We can’t meet our 2030 [emissions] goal, which is in nine years, by installing systems that are going to be designed to burn fossil fuels for 20 years,” he said.

The GWSA requires Vermont to reduce greenhouse gas emissions by 40% below 1990 levels by 2030.

Perchlik said the bill applies to structures under the control of the Department of Buildings and General Services as well as the Department of Forests, Parks and Recreation and the Agency of Transportation. Some state representatives, he added, don’t believe that the legislation is necessary.

“The bill is not unreasonable,” he said. “It acknowledges that there might be times where you have to accept the fossil-fuel system, so it’s not an unbending requirement.”

Upon first reading, the legislature referred the bill to the Senate Institutions Committee.

Speaking during the summit, House Energy and Technology Committee Chair Tim Briglin said his committee is watching the ongoing deliberations in the Vermont Climate Council and the policy ideas “that are bubbling to the surface.”

“One policy that I’m particularly focused on individually is the Clean Heat Standard” (CHS), he said, noting that implementing the standard would not be a “simple policy change.”

Like Vermont’s Renewable Energy Standard, he said, a CHS could be “transformative” for the thermal sector.

The council’s Cross-sector Mitigation Subcommittee recommended in July that the full council adopt a CHS as part of the state’s climate plan due Dec. 1. As proposed by the subcommittee, the CHS would be similar to a renewable standard but apply to fossil-fuel heating providers in Vermont. (See VT Climate Council Puts Clean Heat Standard on the Table.)

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Flexible Ramping Grows as Ancillary Service

A FERC technical conference on ancillary services Tuesday focused on the need for flexible ramping products to compensate for shortfalls in forecasted wind and solar output as the variable energy resources play a larger role in organized markets.

“There is broad industry consensus that RTOs and ISOs will need more operational flexibility from resources to reliably serve loads as the resource mix evolves to include more weather dependent variable energy resources, and loads change due to weather dependent distributed energy resources, electrification, and other factors,” FERC staff wrote in their whitepaper framing the panel discussions.

“Responding to these changing system needs involves several RTO/ISO market design considerations, including how to provide appropriate price signals that both reflect operational needs and incent resources to submit energy and ancillary services supply offers that increase the operational flexibility available on the system, and also encourage efficient investment and retirement decisions,” it said.

Organized markets are increasingly focused on serving “net load,” defined generally as load minus wind and solar generation, representing the demand that must be met with dispatchable resources. CAISO and SPP have run into problems meeting net load when demand is high but solar and wind ramp down, the whitepaper noted.

Until an adequate amount of storage is paired with variable resources, RTOs and ISOs will need other types of quick-start ramping products, including those that rely on gas generation, to compensate for unexpected shortfalls, it said. (See Calif. Needs far more Storage to Decarbonize, Panelists Say.)

SPP’s “Wind Burn”

SPP is a poster child for the issue. The grid operator has added 21 GW of wind capacity since its Day 2 market went live in 2014 and has almost 30 GW of capacity on hand. In May, wind energy accounted for 84% of SPP’s generation during one interval and, renewables make up 95% of its interconnection queue, SPP said in written comments.

Achieving “more certainty, and [being] able to respond quickly to the uncertainty and changes in wind output, is and will be a concern in SPP,” said Jodi Woods, manager of the RTO’s Market Monitoring Unit. “Specifically, actual wind generation can deviate significantly from what was forecasted or expected.”

A March 2018 “wind burn” event in SPP committed 54 units out-of-market to replace the unexpected decrease in wind generation and meet reliability needs. | SPP

The RTO experienced what it called a “wind burn” event in March 2018, when the day-ahead forecast for wind output was 7,000 MW above the reliability unit commitment forecast.“During this event … SPP operators committed 54 units out-of-market to replace the unexpected decrease in wind generation and meet reliability needs,” FERC said. “SPP stated that the root cause of the forecast error was the poor performance of meteorological forecasts.”

Woods said that while SPP’s wind forecast errors were off by only about 4.5% last year, that still represents up to 950 MW — the grid operator’s second largest single-resource contingency and larger than its spinning reserve requirement for the last two years.

SPP is using workarounds in some instances but “manual interventions lead to lower prices in the market and do not send the right pricing signals to responding duration,” she said.“Products that compensate for flexibility and ramping are needed,” Woods said. “When the need for flexibility and ramping are not accounted for, the market may use the ramp for energy needs and not save it to meet the flexibility needs of the system,” Woods said.

Quick Ramp Products

SPP and other organized markets with sharp increases in renewables are looking to quick-response solutions.

Ancillary service products in CAISO, MISO and SPP provide short-term ramp capability “to manage the changing system needs … and reduce out-of-market actions by operators,” FERC said. “Although the three ramp products differ, they share several similar features. The ramp products are bi-directional in that they procure and price upward and downward ramp capability as separate products. The ramp products add a constraint (i.e., a ‘ramp constraint’) to the energy and ancillary services market clearing process that simultaneously procures and prices energy, traditional ancillary services, and the ramp products on a co-optimized basis.”

“In all three markets, the ramp product prices are based on the opportunity cost resources incur from providing ramp rather than energy and the other ancillary services,” it said. “In the event the system is economically or physically short of a ramp product, the ramp price is set by an administratively determined demand curve for the ramp product, with separate demand curves for upward or downward ramp capability.”

At NYISO, the “changes to the grid and operational risk require flexible energy security needs,” Director of Market Design Mike DeSocio said. “We will also need resources that can provide energy output for hours and days to allow grid risks such as renewable output falls, system restoration needs, and storm watches. When we think about the need for flexibility, resources that can respond in a few minutes and run for several hours or days at a time, will be invaluable to the grid of the future.”

Rahul Kalaskar, CAISO’s manager of market analysis, said that over the last decade, the ISO has seen increased variability and uncertainty between its day-ahead and real-time markets, driven by a significant increase in variable resources. That has resulted in more real-time imbalances in both directions.

“The day-ahead forecast cannot predict the net load that will materialize throughout the operating day, so any difference that occurs between what is predicted and what occurs results in imbalances,” Kalaskar said. “When there is a risk that imbalances may be too large to address through the real-time market, the ISO will rely on out-of-market actions to address these.”

He said CAISO is currently adding improvements to the existing real-time flexible ramping product and developing a new day-ahead ramping product called an imbalance reserve to make sure there’s sufficient real-time dispatch capability to meet net load imbalances. (See FERC OKs Ramping Product for CAISO, EIM.)

Up Ramp, Down Ramp

MISO expects an increased “future need for flexibility to address short-term market-wide reserve requirements as the mix of different types of resources … continues to evolve, including the replacement of coal-fired power plants with variable energy resources and natural gas power plants,” the FERC whitepaper said.

Wind generation in MISO increased from 1 GW in 2005 to 19 GW in 2019, and solar generation will reach 11 GW in 2032 if MISO’s resource fleet continues to change at its current pace, it said.

In 2014, FERC approved MISO’s proposal to introduce two ramp capability products — up-ramp capability and down-ramp capability, both intended to address short-term variations in net load. MISO’s ramp capability products procure ramp capability within a 10-minute timeframe. (See MISO Quick Capacity Reserves Wait Until 2021.)

“When MISO is unable to meet the system’s ramp requirements, a demand curve with a maximum price of $5/MWh sets the price for the ramp capability products,” FERC said. “However, MISO is currently considering revising the demand curve for the up-ramp capability product to better reflect net load uncertainty and continue to track with this uncertainty as it changes with the evolving resource mix.”

In PJM, uncertainty and the need for quick ramps to address shortfalls is a “major driver,” said Adam Keech, the RTO’s vice president of market design and economics.

“We tend to look at reserves in PJM as a product with many different uses,” Keech said. “When we look at uncertainty, we’re really trying to get that net load uncertainty to inform the reserve requirement because we deploy reserves for a number of different reasons. For us, the most important things coming out of the reserve markets are the ability to commit units quickly and get megawatts onto the system and ramp them up quickly as well.”

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NY Adopts Goal for Disadvantaged Communities Under Clean Energy Fund

The New York State Energy Research and Development Authority (NYSERDA) received authorization last week to ensure that the benefits of the state’s $6 billion Clean Energy Fund are in line with the Climate Leadership and Community Protection Act (CLCPA).

The state Public Service Commission approved an order that adopts NYSERDA’s proposal to set a new goal for the fund to deliver 40% of benefits of spending to disadvantaged communities. The order, which followed a review of the fund, also adopts a goal for 35% of NY Green Bank’s post-2019 investments to benefit disadvantaged communities.

“These goals will significantly improve benefits to disadvantaged communities as compared to historic performance and are in compliance with the CLCPA,” Peggie Neville, director of efficiency and innovation at the New York Department of Public Service, said during the PSC’s regular meeting.

The fund covers NYSERDA’s ratepayer-supported initiatives under four portfolios, which include market development, innovation and research, NY Green Bank, and the NY-Sun solar incentives program.

Under the CLCPA, state agencies must ensure that disadvantaged communities receive 40% of resource benefits. The act also stood up the New York Climate Action Council, which has been developing a state scoping plan for release later this year to achieve the state’s climate and energy goals.

The order acknowledged that the commission might need to revisit the fund after the council completes its scoping plan process and called for another fund review in 2023. It also recognized the ongoing work of the Climate Justice Working Group to develop a definition of disadvantaged communities by the end of the year, but the order adopted interim criteria for those communities.

The criteria are “communities located within census block groups that meet the U.S. Housing and Urban Development (HUD) 50% adjusted median income threshold, that are also located within the [Department of Environmental Conservation] Potential Environmental Justice Areas or are located within New York State Opportunity Zones.”

According to the order, NYSERDA will now have to track and report on benefits that include:

      • level of direct investment;
      • energy savings;
      • energy bill savings;
      • measures of economic development, such as workforce training and jobs supported; and
      • air quality improvements directly resulting from clean energy investments in disadvantaged communities.

After the Climate Justice Working Group finalizes its definition of disadvantaged communities, NYSERDA will have 60 days to file a plan, based on stakeholder input, for how it will meet the 40% benefits goal.

NY Green Bank

In the order, the commission approved NYSERDA’s request for a series of financial commitments under the NY Green Bank that target technologies other than solar to help diversify the bank’s activities.

“While NY Green Bank has played an important role in spurring the development of solar PV installations, investments to date have been predominantly in the solar sector,” it said.

The commission authorized additional investments of $150 million for clean energy improvements in affordable housing properties, $100 million for clean transportation businesses in New York and $200 million in energy storage-related investments. NY Green Bank has $1.2 billion of committed investments through 2020, according to the order.

In addition, the bank must update its metrics, evaluation and reporting plan through stakeholder input to ensure its offerings “deliver true benefits to disadvantaged communities.” The bank will have six months to complete the update.

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PJM, NJ Staff Brief Stakeholders on State Agreement Approach

Staff for PJM and the New Jersey Board of Public Utilities on Tuesday gave stakeholders the nitty gritty details on the terms of the transmission projects the state is seeking to develop to facilitate offshore wind projects.

The special session of the RTO’s Planning Committee came ahead of the close Friday of the competitive solicitation window for the transmission projects under the “state agreement approach” (SAA) of FERC Order 1000. Under this process, the New Jersey BPU asked PJM to conduct the solicitation, and the RTO will recommend a proposal, though the board will ultimately select the winning project.

The approach allows states to seek transmission solutions in response to public policy goals: in this case — the first ever, New Jersey’s goal of deploying 7,500 MW of offshore wind by 2035. (See NJ Asks PJM to Seek Bids for OSW Tx.)

As projects are still being submitted, PJM staff did not go over the details of any candidate. Rather, the purpose of the meeting was to inform stakeholders how the winning proposal would link to the new offshore wind projects New Jersey is soliciting.

The BPU has already selected 1,100-MW and 2,658-MW offshore wind projects with their own transmission that won’t be subject to SAA cost allocation. The state is planning three more solicitations about every two years, beginning in the third quarter next year: two 1,200-MW projects and one 1,342-MW.PJM

Suzanne Glatz, director of strategic initiatives and interregional planning at PJM, explained that the RTO would use all transmission capability created by the winning transmission project, under the term “SAA capability,” as an input for performing its feasibility and/or system impact studies for the three new wind facilities.

The BPU would be required to assign the new capability to the new offshore wind projects. But in the event that a selected wind project withdraws from the PJM interconnection queue, the board would be able to reassign the capability to a different offshore wind project, or even a different public policy resource, within two years of the withdrawal. Any unassigned SAA capability would be treated as open access.

Glatz emphasized that though the offshore wind projects would get the first bite of the transmission, they would still need to enter the RTO’s interconnection queue, the same as any other generator.

Gregory Carmean, executive director of the Organization of PJM States Inc., asked if the RTO is assuming that all the transmission upgrades needed to interconnect the new offshore wind would be located in New Jersey.

“I don’t think we have solutions yet, but I think we’ve identified at least one violation that’s outside of New Jersey,” Glatz answered. A New Jersey BPU staff member clarified, however, that any upgrades driven by the state’s public policy needs, even those outside the state, would still be subject to the SAA’s cost allocation.

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House Panel OKs Dems’ $3.5T Spending Bill

The House Ways and Means Committee on Wednesday approved the Democrats’ $3.5 trillion spending package, which includes billions for energy efficiency, renewables and electric vehicles.

The committee cleared the Build Back Better Act on a 24-19, party-line vote, sending it on to the Budget Committee. Democrats applauded as the committee completed its four-day markup of the massive bill. “Oh yes!” exclaimed Rep. Linda Sanchez (D-Calif.), when it came her turn to vote.

Committee Chair Richard Neal (D.-Mass.) said the bill includes “substantial investments in the development and deployment of clean energy to do our part in fighting the climate crisis while also creating good, well paying jobs across the country.”

Rep. Don Beyer (D-Va.), co-chair of the Safe Climate Caucus, said the bill “will be the single most important piece of climate legislation we have ever had the chance of passing.”

Ranking member Kevin Brady (R-Texas) countered that the spending package and tax increases would kill jobs and harm small businesses. “Small business owners should dream about passing their success on to future generations,” he tweeted. “Increasing taxes on families and entrepreneurs is why small businesses are fighting against the $3.5 trillion stimulus Congress and the president are considering.”

Democrats hope to pass the package through the reconciliation process to avoid a Republican filibuster in the Senate. But they may need to scale back their ambitions considerably to win the backing of Sens. Joe Manchin (D-W.Va.) and Kyrsten Sinema (D-Ariz.), who have said they would not support such a large spending bill. CNN reported that Manchin arrived at the White House late Wednesday afternoon for a meeting with President Biden, who has been campaigning in support of the bill.

In addition to expanding social safety net programs, the package includes billions in spending on energy, including credits for renewable electricity production and renewable fuels, and incentives for electric and alternative fuel vehicles.

Paula Glover, president of the Alliance to Save Energy, praised its inclusion of several tax credits for energy efficiency, including a change she said “would allow homeowners to budget and plan multiple energy efficiency investments over several years.”

American Clean Power Association CEO Heather Zichal called the vote “another critical step forward for the domestic clean energy economy.”

“The provisions in this legislation will enable the continued rapid deployment of renewable energy projects along with energy storage and transmission upgrades to help our nation address the climate crisis,” she added.

But the Sierra Club lamented that Democrats failed to cut subsidies for the fossil fuel industry and that the bill “maintains the status quo by needlessly incentivizing technologies that will not advance us towards our truly renewable and clean goals, such as credits for municipal solid waste, biomass, carbon capture and utilization, and nuclear facilities.”