Page 964 – RTO Insider

March 12, 2021

EIM Governing Body OKs Summer Readiness Measures

The Western Energy Imbalance Market’s Governing Body approved two CAISO measures and endorsed a third measure Wednesday to improve reliability and lessen the chances that the West will be hit with capacity shortfalls again this summer.

The Governing Body has primary approval authority over two of the measures, which affect the EIM. One would enhance testing to make sure balancing authority areas in the EIM have sufficient resources. Another would improve coordination among the BAAs.

The third measure deals with scarcity pricing under strained system conditions; the EIM’s role was advisory. (See related story, CAISO MSC Weighs Summer Market Changes.)

The CAISO Board of Governors must still approve all three measures at its meetings on March 24 and 25. They are part of the summer readiness initiatives that CAISO fast-tracked in response to the rolling blackouts in mid-August and issues identified in a root-cause analysis of the events.

resource sufficiency — EIM Governing Body members Valerie Fong, John Prescott and Carl Linvill participate in a pre-pandemic meeting in December 2019. | © *RTO Insider*

A separate resource adequacy initiative is also moving forward, which CAISO hopes will be approved later this month. (CAISO Readies RA Enhancements for Summer.)

With only three months to weigh the measures, not everything stakeholders – or even CAISO – wanted is included, but the process will continue in future phases, Anna McKenna, the ISO’s interim vice president for market policy and performance, told EIM Governing Body members.

“We found it was necessary to move forward at this time with the changes we knew we could implement for this summer,” McKenna said. “The changes we present to you today we know are feasible both for ourselves and, we believe, for market participants.”

In her memo to the Governing Body, McKenna said the resource sufficiency enhancement will help ensure that each BAA participating in the EIM can meet its own load and will prevent participants from “leaning” on the EIM, an interstate real-time energy market.

The current resource sufficiency evaluation includes two tests: a capacity test and a flexible ramping sufficiency test. The tests need upgrades to deal with the situation that gave rise to the August blackouts, when solar ramped down in the evening, she said. The tests showed CAISO had sufficient resources prior to the blackouts even though it was running short.

In response, “management proposes to enhance the EIM’s resource sufficiency evaluation’s capacity test so that it accounts for net load uncertainty in addition to each balancing authority area’s net load forecast,” the memo said. Net load is demand minus renewable resources, primarily solar. The August blackouts occurred at roughly 6:30 p.m., as solar generation steeply declined.

“Actual net load can be significantly different than forecast, particularly with significant amounts of renewable resources,” it said. “For example, an unexpected sudden decrease in solar output increases the net load that must be met by dispatchable resources.”

CAISO management wants to improve the capacity test “to require each balancing authority area to submit sufficient energy schedules and bids to account for net load forecast uncertainty, in addition to sufficient schedules and bids to cover its forecast load,” McKenna wrote. “This will better ensure each balancing authority provides sufficient schedules and bids and the associated resource capacity to meet its actual net load, including net load that may be different than forecast.”

The flexible ramping test accounts for some net load uncertainty, “but it only looks at ramp rate capability between market intervals and consequently does not ensure each balancing authority area has sufficient overall capacity based on its resource schedules and energy bids to meet its forecast net load and account for net load uncertainty,” the staff memo noted.

“The net load uncertainty amount used in the resource sufficiency evaluation is determined by similar principles that the ISO market systems use for the real-time market’s flexible ramping product procurement,” it said. “The requirement accounts for the net load forecast error between the fiftee15-minute and 5-minute real-time market dispatch. This amount is adjusted [in the proposed changes] to reflect the diversity benefit of meeting net load uncertainty across the EIM with one set of resources.”

‘Step in the Right Direction’

CAISO management also proposed “an enhancement related to how the real-time market models energy interchanges into the ISO balancing authority areas at intertie scheduling points that are sourced from adjacent balancing authority areas in the EIM.” The measure came from CAISO’s review of operations during last summer’s heat waves in which the ISO’s market systems and EIM BAA used incorrect information, it said.

“Management proposes to make it mandatory for EIM balancing authority areas to use an automated market feature that updates the EIM balancing authority area’s ‘mirror resource’ when the ISO market awards an import at an ISO intertie scheduling point that was sourced from the EIM balancing area,” McKenna’s memo said. “These are separate from EIM transfers resulting from the EIM’s resource-specific dispatch.”

Mirror resources model the energy interchange from EIM balancing authority area, the ISO said. “An oversight in updating a mirror resource’s schedule during tight conditions last summer resulted in system anomalies and operational issues,” it said.

The Governing Body unanimously approved the resource sufficiency and BAA coordination measures and recommended that the ISO Board of Governors adopt the scarcity pricing component.

During Wednesday’s discussion, CAISO CEO Elliot Mainzer said the summer readiness enhancements are key to the future success of CAISO and the EIM.

“The sufficiency elements of the EIM are just absolutely foundational, and there should be no question whatsoever that we are unequivocally committed to addressing the issues that we found last year,” Mainzer said. “These initial sets of changes are a step in the right direction, but we recognize it’s not the end of the conversation, both for 2021 and beyond.”

March 12, 2021

Global Energy Transition Needs Speed, Worker Safeguards

The global energy transition must move more swiftly and provide generous employment opportunities so that workers in vulnerable communities aren’t left reeling from the accompanying economic disruption, a panel of experts said Tuesday.

The Center for Strategic and International Studies and Climate Investment Funds gathered panelists for a webinar entitled “Road to COP26: Just Transitions and the Climate Agenda,” in preparation for the 2021 United Nations Climate Change Conference in November.

Panelists agreed that a just transition to climate-friendly energy policies should sustain or improve vulnerable communities — and fast.

global energy transition — Climate Investment Funds CEO Mafalda Duarte | *CSIS*

Climate Investment Funds CEO Mafalda Duarte said the transformation of the planet’s energy systems must combine the rapid with the respectful.

“If we are to meet our climate goals, we will go through some very significant social and economic transformations,” she said. “In fact, potentially, and most likely, at a scale and speed that we have not experienced in human history.”

Duarte said such disruptive and rapid changes will hit especially hard for communities and workers who are dependent on fossil fuels for their livelihoods. She said climate action will fall short of goals without a transition that embraces all sections of the population.

“We already live in a world that has quite deep-rooted inequalities,” Duarte said. “We all know this very well.”

She said it’s important to avoid exacerbating social inequalities while making necessary changes for the climate; “In fact, we should take advantage of this opportunity to really try to address some of those social inequalities and make sure we are not leaving anyone behind.”

4 Times Faster

Kate Hughes, director of international climate and energy for the U.K. Department for Business, Energy and Industrial Strategy, said the global energy transition must move four times faster than the current pace to meet the goals in the Paris Climate Accord.

Countries around the world, especially those in the G20, need to re-evaluate their 2030 goals.

“Coal must be rapidly phased out,” she said.

Organization for Economic Cooperation and Development nations should plan to end coal use by 2030, she said, while other major emitting countries should strive for a 2040 target. The rest of the world should quit coal by 2050, she said.

“We’ve got to speed up and really sort of deepen that shift of global investment patterns away from brown and towards green,” Hughes said.

Jobs in the green sector are growing faster than in the traditional economy, she added. She pointed out that the International Labor Organization estimates that 24 million new jobs could be created in the green sector by 2030.

But Hughes said the changeover won’t be simple because green jobs don’t typically take root in the same areas where fossil fuel jobs become extinct. Climate actions need to consider the impacts on workers and communities, she said.

“We must bring society together in an inclusive manner.”

The U.S.

Andrew Light, head of the U.S. Department of Energy’s Office of International Affairs, described the Biden administration’s four “pillars” of current focus: pandemic recovery, the economic downturn, the climate crisis and racial justice issues.

Light said the administration and the DOE firmly believe that “attending to climate change is a job creator.”

“It always has been,” Light said. “It is just now that we’re beginning to see this much more clearly than we did back in 2009. … It is, I believe, the greatest job creation opportunity that … we have in our lifetimes, that we’ll ever have in our lifetimes, to shepherd through what will be a just transition to a global clean energy economy.”

Light pointed to Biden’s Jan. 27 executive order creating an interagency working group to examine economic revitalization for coal and power plant communities. The working group will focus on U.S. communities that have already experienced employment losses from the energy transition.

“The United States has been largely sitting on the sidelines [on climate issues] … in the past four years, and now we are back,” Light said.

Developing Nations

The energy transition is a “particularly difficult task” for developing nations, said Ajay Mathur, director general-designate of the International Solar Alliance.

Developing nations already suffer from energy adequacy problems or have populations that cannot pay for energy services, he said.

“Solar electricity is the cheapest electricity available in India, but only when the sun is shining,” Mathur said of his native country, adding that coal becomes the cheapest energy form at dusk. He noted that any country with a “decent standard of living” consumes energy at four times the level of India on a per capita basis.

Mathur said it’s vital that in the next few years energy storage becomes inexpensive enough to pair with renewable generation. Renewable resources must also be offered cheaply to developing nations, especially considering that developed nations built entire empires on the backs of fossil fuels, he said. Coal use will vanish once it becomes economically infeasible, he added.

Light said it’s up to the economic powerhouses to offer favorable lending rates to other countries trying to fund energy transitions and coal phaseouts.

Mathur said while it’s clear that renewable energy creates more jobs than coal mining, the jobs require separate skill sets. He said areas that most stand to benefit from renewable expansion are not those where the coal industry thrives.

A just transition would ensure that “the day the last coal power plant closes is the day the last coal mine closes is the day the last coal miner retires,” he said.

“Only that would help us move in a just transition towards a renewable future,” he said

Mathur noted that when people lose jobs, they lose not only their financial lifeline but also a big piece of their social lives. He said communities entrenched in the coal industry contain families and friends across generations. Replacing those jobs in the same region is important and could lead to creative new options, he said, pointing out that coal mining has been supplanted with more lucrative beekeeping jobs in some communities.

‘Good’ Jobs

Samantha Smith, director of the Just Transition Centre at the International Trade Union Confederation, said she’s “a mixture of beaten down by a year of bad news” and optimistic about political climate developments in several countries, particularly the U.S. and the European Union.

But she also warned of a “jobs apocalypse.”

“We’re going to be talking about the need to create good climate jobs,” Smith predicted. She said good green jobs must come equipped with workers’ rights, pensions, social protections and health care.

“If we can’t have a recovery that is rich in good jobs, and that respects peoples’ rights — also rights to form trade unions — then it’s pretty hard to see how you’re going to have the kind of political stability we need to roll out climate policy,” she said. “And if climate policy isn’t really a jobs program, it’s hard to see how people are going to support it more broadly.”

March 12, 2021

DOE Urges Stakeholders to Rethink Value of Storage

The U.S. Department of Energy is encouraging long-duration energy storage (LDES) owners, those who purchase their services and state governments to rethink how those assets are valued.

LDES, defined as any resource that continuously operates for more than six hours, is all about mitigating risk, Max Tuttman, technology-to-market adviser at the department’s Advanced Research Projects Agency-Energy, said during a virtual “workshop” on energy storage hosted by DOE and several National Laboratories. “It’s the ultimate risk mitigation asset.”

Tuttman believes that LDES developers have to learn to adjust their thinking away from how their technologies provide value to the grid, to understanding how they can provide value to customers. LDES, for example, can bring value through “portfolio balancing” by acting like insurance, Tuttman said.

“Insurance is a product that you pay for that you hope to not use very much, and that you actually don’t expect to have a positive long-term return on,” he said. “Similarly, long-duration storage — if you have a portfolio of other assets, be those generators or load — can play an important role in managing the risk profile of that portfolio.”

DOE energy storage — Policy and regulations can create barriers to market entry for long-duration energy storage, like pumped hydropower facilities. | *Shutterstock*

Delivering that level of risk management creates value for different customer types, such as data center owners, renewable energy developers or load-serving entities.

“It’s important for technology developers to understand what the source of revenue is for those customers and then understand how long-duration storage can provide value to those customers in the context of their existing business models,” Tuttman said.

LDES also can provide value through asset substitution, he said.

The owner of a utility-scale solar project in California, for example, is using storage to flatten load and lessen transmission congestion, rather than pay for costly network upgrades. In this case, Tuttman said, the developer is replacing a transmission asset with a storage asset.

“You’re using [LDES] to offset the cost of a different asset,” he said. “So instead of keeping a power plant around for reliability, you now have energy storage for reliability.”

Policy Concerns

The way that policymakers and regulators currently value LDES creates barriers to market entry for the technology, Erin Childs, senior manager at Strategen Consulting, said during the workshop. In California, for example, rules for resource adequacy do not provide capacity credits for storage beyond four hours.

“Storage resources that are able to provide longer durations of dispatch really receive no benefits or no compensation for that,” she said. “There is a need to harmonize our capacity and our planning requirements with what we see the grid needing in the longer term.”

LDES companies that Strategen has worked with say they are cost-competitive at six- to eight-hour durations, Childs said. “The market just isn’t buying six to eight hours.”

There is a lot of opportunity for resource adequacy reform, according to Childs, but the process is long and complicated.

“If it takes us five years to do resource adequacy reform, are we willing to wait that long to do any long-duration storage? And if not, then what do we do as we’re getting our market incentives lined up?” she asked.

Childs said that policymakers also need to consider how electric systems will value and compensate much longer storage durations for reserves and reliability.

There is a misperception, she said, that 100-hour storage is just for those days of the year when the sun isn’t shining, the wind isn’t blowing or there are peak demands. Modeling of those longer durations, she argued, show that 100-hour resources charge throughout the year and dispatch 10 months out of the year.

“These are not resources that are put on the shelf … until something really terrible happens,” she said. “They are on the grid; they are dispatching; and there are revenue streams that they can be accessing.”

March 12, 2021

FERC Affirms Findings on PJM E&AS Offsets

FERC on Tuesday explained why it declined to act on requests by power generators and public interest groups to rehear a January compliance order on the treatment of energy market revenue calculations in PJM’s capacity auctions (EL19-58-005).

The rehearing requests — one filed jointly by Exelon and Public Service Enterprise Group — were automatically denied in January when FERC failed to act on them within the requisite 30 days.

At issue is the implementation of PJM’s net energy and ancillary services (E&AS) offset calculation used to help estimate the net cost of new entry (CONE) for resources in the RTO’s Base Residual Auction. The offset “is designed to model net revenue that a ‘representative resource’ would earn during its first year of commercial operation,” according to PJM.

FERC last November approved the details of PJM’s offset calculation, which draws on energy market results from the three calendar years before the BRA to inform modeled offers for resources. (See FERC Approves PJM Key Capacity Market Variable.) As noted by Chair Richard Glick in a concurring statement to Tuesday’s order, approval of the offset allows PJM to conduct “its long-delayed, much-needed capacity auction,” the subject of enduring disputes over the treatment state-sponsored resources.

But the commission had also directed PJM to allow combustion turbine resources to reflect in their E&AS offsets a 10% adder to account for “the additional costs and risks that may be incurred by operating the CT reference resource in a manner that fully recognizes flexibility, which is not limited only to peak hours or times of system stress.” No other resources would be eligible to include the adder.

PJM was also ordered to use historical prices to forecast operating reserve and regulation dispatch and revenues for capacity resources, variables also used in the calculation of the E&AS offset for all resources.

PJM Energy and Ancillary Services — FERC headquarters | © *RTO Insider*

Exelon, PSEG and a group of public interest and customer organizations (PICOs) in PJM, however, petitioned FERC to reconsider those directives. (FERC staff on Jan. 4 accepted PJM’s compliance filing implementing them in a delegated order.)

The PICOs argued that the 10% adder would unjustifiably increase net CONE for CT resources and drive up costs for ratepayers. They also contended that the use of historical operating reserve prices would underestimate the future revenues capacity resources would earn based on recent market changes.

FERC responded by noting “that PICOs’ rehearing arguments opposing the adder are repetitive of arguments that the commission previously considered and found unpersuasive” in a quadrennial review of PJM’s variable resource requirement curve. “We continue to find adequate evidence in the record to demonstrate that including the 10% adder results in a just and reasonable approximation of the costs for a CT unit.”

In rejecting the PICOs’ opposition to the use of historical prices, the commission said it “selected PJM’s proposed approach as a just and reasonable replacement rate given the lack of a futures markets for reserves and uncertainty regarding the actual reserve price impacts of PJM’s reserve market reforms.”

Exelon and PSEG attacked the plan from the other direction, objecting to the fact that the 10% adder wouldn’t be available to other resources. The companies also contested the use of historical prices, arguing that past performance in the small regulation market was not a good indicator of future revenues.

FERC gave these arguments similar treatment: “As the commission explained in the compliance order, PJM reasonably excluded the 10% adder from the modeled offers of combined cycle units and other resources, such as coal units, because, unlike CTs, those resources ‘do not significantly alter their operating schedules based on evolving conditions between the day-ahead and real-time markets.’”

The commission also rejected the generators’ concerns about the use of historical prices. “Contrary to the rehearing arguments of Exelon/PSEG, the use of scaled historical prices to estimate future regulation prices is consistent with the directive in the May 2020 order to use a forward-looking E&AS offset,” FERC said.

Clements Dissents

Despite the commission’s approval, a majority of the commissioners seemed to agree that the petitioners’ arguments had merit.

But Chairman Glick and Commissioner Mark Christie essentially overruled a dissent by Commissioner Allison Clements, arguing that it was imperative that PJM run the BRA for the 2022/23 delivery year.

Clements wrote that there is a “paucity of record evidence” to support the 10% adder. She disagreed with the commission’s assumption that PJM’s application of the adder and use of historical reserve prices “will yield just and reasonable capacity rates;” rather, they could have “material real-world consequences” because they feed into the net CONE value.

Clements pointed to the PICOs’ assertion that PJM’s 10% adder translates to a daily increase in net CONE of roughly $30/MW, which is nearly 12% of the recently posted RTO-wide per-day figure of $260.50/MW for the 2022/2023 BRA. These estimates “translate to significant additional capacity costs to customers,” she said.

Glick acknowledged that Clements “makes a number of good points” but said that “the real problem lies with PJM’s misguided choice of the reference resource to calculate net CONE, rather than in how it implemented the forward-looking E&AS offset in this proceeding.”

FERC has “meddled with one aspect of PJM’s capacity market after another,” said Glick, who has “dissented at nearly every turn” in the capacity market proceedings, arguing that “truly bad public policy” produces rates that are “patently unjust and unreasonable.”

“With that in mind, now is not the time to once again pull the rug out from underneath the auction,” Glick said. He added that there is no “superior alternative to PJM’s proposal to use historical reserve prices as the basis for projecting future reserve revenues.”

“Were such an alternative available, I agree that it would merit a hard look,” Glick said. “But as it is not, we must provide PJM with the certainty it needs to finally run the upcoming auction and then, with that behind us, turn to remedying the more fundamental problems that the commission has created over the course of the last three years.”

Christie said he shared Clements’ concerns about the adder but is “convinced any such changes at this stage would threaten — or indeed obstruct — the ability of PJM to conduct the Base Residual Auction as scheduled this May, which is essential for reliability purposes.”

He added that “the PJM capacity market is not a true market, but is, instead, an administrative construct whose very complexity is inconsistent with transparency.” He said he has been “vocal” about considering the issue in a “general proceeding” such as a technical conference.

March 12, 2021

Senators Grill Robb, Asthana over Texas Outages

The February winter storm and resulting dayslong outages in Texas loomed large over Thursday’s meeting of the Senate Energy and Natural Resources Committee, with members pressing representatives of the electricity sector for an explanation of the events and assurances that they are working to prevent future mass failures.

Senate Texas outages — Sen. Joe Manchin (D-W.Va.) | *U.S. Senate*

However, the committee emphasized that they were not interested in scapegoating a single state. Senators described last month’s disaster — when at one point nearly 49% of total installed generating capacity within ERCOT was unavailable and the operator came “seconds and minutes away” from complete breakdown — as a wake-up call about the vulnerability of the entire national grid. (See ERCOT was ‘Seconds and Minutes’ from Total Collapse.)

“[Let] me be clear: Today’s hearing is not a referendum on Texas,” Chair Joe Manchin (D-W.Va.) said in his opening remarks. “We’ve seen the impact of extreme weather events to our electric grid across the country … [and] we need to incorporate all of the lessons learned from those events into our future planning, particularly as we can expect both our energy mix and weather patterns to be different in the next decade than they were in the last decade.”

NERC CEO Jim Robb expanded on this theme in his written testimony, citing several weather-related incidents in recent years — including the August 2020 heat wave that led to rolling blackouts in California and grid emergencies in other Western states — to argue that no region is immune to disruption. (See WECC Findings Show Complexity of Heat Wave Event.) As severe weather events become more frequent, grid planners will have to be proactive about preparing their systems for stronger impacts.

No Universal Solution

What form that preparation might take was a major topic of questioning, with senators bringing up a variety of measures to ask what impact they might have had on the resilience of the grid during the weather events that Robb mentioned. Hypothetical improvements raised by senators included building out natural gas and other traditional assets to offset the purported unreliability of wind and solar facilities; implementing capacity markets to incentivize generators to make more resources available for potential surges; and expanding or improving transmission facilities to remove bottlenecks between supply and demand.

Attendees generally agreed on the need for more transmission, but they were more reluctant to endorse other recommendations in light of different regional needs. PJM CEO Manu Asthana acknowledged that his RTO’s capacity market was designed to prevent the kind of instability that gripped Texas in February, but he warned that the solution was not likely to be so simple.

“It’s easy to think, ‘Oh, if only Texas had a capacity market, this wouldn’t have happened,’” Asthana said. “I think Texas would have had a higher reserve margin [in that event], but it’s important to note that … Texas had reported a reserve margin for this winter of 43%” in NERC’s Winter Reliability Assessment. “And so it was not a shortage of capacity; it was this incredibly cold weather for which the capacity was not prepared.” (See NERC Warns of Fuel Bottlenecks in Coming Cold Months.)

Texas Faces Heat on Winter Prep

Several members seized on that lack of preparedness, using Robb’s observation that FERC and NERC had issued a cold weather preparedness guideline following the 2011 cold weather event in Texas and Arizona to suggest, in the words of Sen. Mazie Hirono (D-Hawaii), that “they probably didn’t follow your recommendations very well.”

Robb was guarded in his response to Hirono. While he acknowledged that the cold weather preparedness standard currently under development at NERC “no doubt … would have helped” in last month’s crisis, he reminded members that the situation was extremely complex. For this reason NERC and FERC are conducting a joint inquiry to establish the exact causes of the outages.

“I think one of the things that … we will uncover through this inquiry is … if the power plants were weatherized adequately for the conditions that were in place, whether the … natural gas system in Texas would have been able to deliver fuel to those plants,” Robb said.

Several committee members used the February outages as a way to argue that the transition to renewable generation resources must not be pursued too hastily. Ranking member John Barrasso (R-Wyo.) said in his opening statement that utilities “must work with the grids we have today, not with the grids we wish [for] in 15 or 25 years,” and that traditional generation must be a part of the national energy strategy for the foreseeable future.

“Increasingly the national discussion on electricity has centered around a single metric: how much greenhouse gas does the source of electricity provide,” Barrasso said. “The discussion has failed to pay sufficient attention to the questions of reliability, resiliency and affordability. … We must ensure that our grids can provide electricity at all times, and at prices that American families and businesses can afford. The American public deserves to know what policies and measures are necessary to ensure that that happens.”

March 12, 2021

Natural Gas Use Expected to Rise in NY

New York will see an increase in new natural gas plants and the hours of operation of existing gas plants after the state’s Indian Point Nuclear Energy Center closes in April, New York State Energy Research and Development Authority Board Member John B. Rhodes said Wednesday.

However, the long-term role of natural gas in the state’s energy grid is still unknown, he said during a webinar in Our Energy Policy’s Energy Leaders series.

As states in the Northeast grapple with balancing decarbonization with energy reliability and affordability, there is a possibility that thermal power generation, or energy produced by burning liquified natural gas to convert it into electric energy, “needs to be a part of that mix,” Rhodes said. But other solutions, such as battery storage and dynamic load, or adjusting the load demand on the electrical power grid to balance overall grid load with generation, are promising alternatives.

“Our pathway to backing down gas from the power grid is much clearer than it is for heat,” Rhodes said.

New York Natural Gas — As large renewable energy projects ramp up in New York, the state will see a near-term increase in natural gas power plants, such as the one seen here in New York City. | *Shutterstock*

Rhodes is confident the state will reach its goal of 70% renewables by 2030 set by the Climate Leadership and Community Protection Act in 2019, but “it’s always the case that the last megawatt-hours are the hardest to get.”

The phase out of natural gas from the heating industry, however, has a solution gap, Rhodes said. “Buildings in general are a tough sector for energy transition.”

According to Rhodes, the building sector is not centered on how buildings use energy; it is centered around serving the people that are in them.

Investing in Mitigation

Another challenge to weaning the heating sector off oil and natural gas is buy-in from consumers, Kyle Kimball, vice president of government, regional and community affairs at Consolidated Edison, said during the webinar.

“One of the biggest challenges is uptake — or getting the building decision maker or homeowner to say yes to upgrades” that would improve heat insulation, Rhodes added.

Property owners can be hesitant to go through the disruption that structure upgrades can entail. But consumer attitudes are changing.

A new poll by the MassINC Polling Group, sponsored by the Barr Foundation and conducted with input from the Massachusetts Executive Office of Energy and Environmental Affairs, found that residents are highly supportive of policies that would help them upgrade their homes, especially incentives for utility companies to help make customers’ homes more efficient.

Although most residents are satisfied with the heating setup they already have, the poll found evidence that those who have made the switch to renewables are glad they did. And a third of those who currently heat their homes with electricity from the grid say their top choice would be electricity that comes from solar.

Rhodes said that in his experience the “awareness and appetite to invest to avoid climate change is a lot higher in 2021 than it was in 2013.”

There remains, however, room for innovation in improving a building envelope practically and affordably to move away from energy sources like natural gas, Rhodes said.

March 12, 2021November 2, 2023

NJ Regulators Give Microgrid Projects a Thumbs Up

Proposed microgrids in Atlantic City and seven other locations took another step toward reality after the New Jersey Board of Public Utilities (BPU) last week approved $4 million in subsidies for the projects.

The Atlantic City project being developed by independent power producer DCO Energy would provide emergency backup power to Caesars Atlantic City Hotel and Casino, Bally’s Hotel and Casino, The Claridge hotel, Boardwalk Hall — best known as the traditional home of the Miss America pageant — local shops and the city’s main hospital.

The project will involve a retrofit to increase the capacity of the Midtown Thermal Control Center, which currently provides heating, cooling and emergency power to casinos and other facilities, to 19.3 MW.

The BPU’s awards were the result of a two-part competition that began in 2017 under the Town Center Distributed Energy Resources Microgrid Design Incentive Program. Besides Atlantic City, subsidies went to Montclair Township, the Borough of Highland Park, Hudson County, the City of Hoboken, Neptune Township, Woodbridge Township and the New Jersey Department of the Treasury on behalf of the City of Trenton. Atlantic City’s $1.1 million grant was the largest award.

The Atlantic City microgrid will involve a retrofit to increase the capacity of the Midtown Thermal Control Center, which currently provides heating, cooling and emergency power to casinos and other facilities, to 19.3 MW. | DCO Energy

The BPU said the eight projects would provide resilience to 24 Federal Emergency Management Agency Category IV facilities (including hospitals, fire and police stations) and 32 FEMA Category III facilities (including educational facilities and other buildings where more than 300 people congregate).

“In addition, they would deploy 10.5 MW of new or existing solar PV generation and 2.9 MW of new or existing battery storage, resulting in over 24,000 tons of avoided CO2 emissions annually,” the BPU said.

New Jersey’s interest in microgrids dates back to 2012 when Superstorm Sandy battered the state. After making landfall with hurricane-force winds near Atlantic City, the storm devastated the Jersey Shore, causing major flooding and power outages that left millions in the dark for days. Public Service Electric & Gas, the state’s largest utility, estimated Sandy did about $300 million in damage to its transmission and distribution system. According to IHS Global Insight, the storm, which also hit New York City, caused as much as $30 billion in property damage, making it one of the costliest natural disasters in U.S. history.

“As the recent events in Texas have reminded us, infrastructure resilience is critical to maintaining reliable energy and utility services in the event of an emergency. We learned this ourselves during and after Superstorm Sandy,” said BPU President Joseph Fiordaliso at the board’s March 3 meeting. “But we are moving in a direction that hopefully will never allow what happened in Texas to happen here in New Jersey.”

Power disruptions in Texas and California have brought new attention to microgrids. ERCOT, the nonprofit manager of Texas’ grid, fired CEO Bill Magness last week after the system nearly collapsed during a winter storm that left millions without power. (See ERCOT Board Cuts Ties With Bill Magness.) In January, the California Public Utilities Commission ordered the state’s investor-owned utilities to offer a $200 million microgrid incentive program to communities at risk of public safety power shutoffs because of wildfires. (See Calif. PUC Orders $200M Microgrid Incentive Program.)

Microgrids haven’t been an easy sell to utilities, which see them as a threat to their traditional monopoly business, according to Guidehouse Insights Research Director Peter Asmus, who tracks the microgrid industry.

“Most microgrids are not deployed by utilities,” Asmus wrote in an email. “As such, they are often not located in ideal locations to bolster the resiliency of the larger grid, though that is changing as microgrids can serve as excellent demand response resources. And given recent outages linked to extreme weather — such as in Texas — the need for greater resiliency is clear. But utilities worry that these microgrids are not directly under their control, could perhaps impact the larger grid if they don’t operate properly, and could result in a loss of revenue. ”

The microgrid would provide emergency back-up power to Caesars Atlantic City Hotel and Casino; Bally’s Hotel and Casino; The Claridge hotel; Boardwalk Hall, local shops, and the city’s main hospital. | Google

According to Adam Benshoff, vice president for regulatory affairs at the Edison Electric Institute, utilities often have problems persuading regulators to allow them to recoup the costs of microgrids in rates.

“They’ve had trouble even getting approval for sort of public purpose microgrids — one that will just keep critical online infrastructure like hospitals, police stations fire stations, things like that,” Benshoff said in an interview. “Sometimes it’s difficult to sell unless you can show real value to the broader customer base.”

DCO acquired the Midtown Thermal Control Center in 2016 from Pepco, the parent company of local utility Atlantic City Electric. According to DCO Chairman Frank DiCola, the biggest challenge facing the company in getting the microgrids established is getting Atlantic Electric to agree to it.

“We need them to work with us in establishing the microgrid,” DiCola said in an interview, adding that he had no reason to expect any problems with the utility company. “But you never can tell,” he added. “We have been talking to them on-and-off for the past couple of years. We want to work in a very cooperative manner with them. They are part of the solution.”

Pepco told NetZero Insider that it was committed to microgrids and other technologies that will bolster the company’s grid reliability,

“As with all projects on our system, we will continue to engage with the project developer and refine this microgrid project to ensure it is in the best interest of our customers and will not affect our ability to provide clean, safe, affordable and reliable energy service for our customers,” it said.

March 12, 2021November 1, 2023

Vote on Mass. Climate Bill Delayed in Senate

Massachusetts Senate Minority Leader Bruce Tarr (R) on Thursday delayed the vote on an exhaustive climate bill after lawmakers reworked the text to incorporate amendments from Republican Gov. Charlie Baker.

Tarr called for more time for legislators and the public to review the new version of the bill after the changes were released late Wednesday.

Senate Democrats expressed their disappointment that the vote was delayed. The bill has been more than a year and a half in the making in the legislature and would serve as one of the leading mandates for reducing carbon emissions in the U.S.

“Human beings are already too late in responding to human-made problems caused and represented by climate change,” Sen. Michael Barrett (D), lead on the climate bill, said on the Senate floor.

The version of the bill up for a vote maintains several of Baker’s provisions in the amendments he sent back to the legislature in early February, including a specialized energy code that will enforce net-zero building construction for towns that want it. The bill also sets mandatory emissions limits in the transportation, manufacturing and natural gas sectors. (See Baker Returns Climate Bill to Mass. Legislature.)

The latest delay of a comprehensive climate bill for Massachusetts took place Thursday in the Senate, seen here, where Republican lawmakers held up a planned vote. | Montanabw, CC BY-SA 4.0, via Wikimedia Commons

Baker attempted to loosen legal requirements for specific business sectors to meet emissions reduction goals, suggesting the requirements serve as “planning tools” or guidelines for industries, a move supported by the influential employer group Associated Industries of Massachusetts.

The governor also faced pushback from the real estate industry, which called on him to oppose provisions that would allow towns to adopt rules requiring that new buildings meet net-zero emissions. Developers expressed their concerns to Baker about the increase in upfront costs for construction.

“There is always an interest group working through their elected representatives to keep things moving at a painfully slow crawl,” Barrett said on the Senate floor.

Sen. Michael Rodrigues noted that in his 25 years in government, the state legislature has never held a hearing on amendments proposed by the governor’s office for other pieces of legislation.

“We are on the cusp of a sustainability revolution in this nation and in the world,” Sen. Marc Pacheco (D) said. “We can either lead as this bill allows us to do, or we will be behind China and other countries.”

Massachusetts lawmakers held firm on their target of reducing 50% of emissions below 1990 levels by 2030 after Baker proposed reducing emissions by 45% below 1990 levels. Baker claimed the higher target would cost the state $6 billion dollars more than a 45% target.

Environmental advocates in Massachusetts, such as Craig Altemose of the Better Future Project, told NetZero Insider that even 50% by 2030 is not enough to limit the Earth’s warming below 1.5 degrees Celsius.

New language in the bill also incorporates Baker’s amendment to strengthen protections for environmental justice populations by enforcing a cumulative, holistic impact analysis when building new infrastructure.

The climate bill will be brought to a vote in the next Senate legislative session. If the legislature sends the bill to Baker for his signature and he vetoes it, the legislature is likely to have enough votes to override the veto.

“The majority of the Massachusetts Senate remains prepared to take swift action on this bill,” Sen. President Karen Spilka (D) said in a statement.

March 12, 2021

Cut Peakers, Boost Storage, NY Climate Council Hears

Residents speaking to New York’s Climate Action Council Wednesday urged haste in stopping construction of new gas-fired power plants, closing old peaker plants and increasing the use of energy storage and other new technologies to reduce emissions and move the state toward a net-zero grid.

Laura Burkhart, an engineer from Rockland County, spoke of the importance of shutting down peaker plants in the state and replacing them with solar plus storage where feasible.

“As you know, peaker plants have several shortcomings,” Burkhart told the CAC’s Power Generation Advisory Panel. Many of them are old and contribute significantly to local air pollution, and they’re usually located in disadvantaged communities, and they greatly increase the cost of electricity to ratepayers due to the capacity payments they receive just for existing.”

New regulations under the state’s Climate Leadership and Community Protection Act (CLCPA) require a 40% decrease of methane and other greenhouse gases by 2030 and an 85% cut by midcentury.

NY Climate Council — New York GHG Emissions: New York’s industrial GHG emissions to date versus CLCPA targets for 2030/2050 | *NYDPS*

Anne Rhodes, energy educator with Cornell Cooperative Extension in Tompkins County, said, “If we are going to switch to wind and solar, we need way, way more storage. … I’d like to emphasize that we should not wait on storage solutions and that we move forward quickly.”

Rhodes added that community support is needed and “one thing that will mute resistance is if we take care of workers.”

Stop Using Gas

Environmentalist Gale Pisha from Rockland County urged the state to stop permitting new gas power plants, including those being proposed for “so called” repowering.

“Either these new plants will operate for another 30 years or more, which will keep New York state from reaching the goals of CLCPA, or they’ll become useless,” Pisha said. “And why should resources be put into building new gas plants when those same resources need to be used to build renewable generation, upgrade our transmission and develop distributed generation to increase the grid’s reliability and resiliency?”

Sixty-eight percent of the state’s electricity is currently generated by fossil fuels, so adding more is going in the opposite direction from what we need, Pisha said.

“I would far prefer that we have rolling blackouts than build an additional gas-fired power plant,” said Tara Vamos of NY Renews, speaking for herself as a citizen. “Enough is enough.”

New York’s climate goals are a good starting point, but with ocean currents slowing down and the earth’s climate becoming increasingly unpredictable and causing thousands of deaths and billions of dollars’ worth of damage per year, “we should be shooting for shorter timeframes,” Vamos said.

It would be unconscionable to allow new gas plants just because they say they’ll switch to green hydrogen in the future, she said.

Environmental scientist Suzanne Hunt said she wanted “to reframe how we’re talking about the green hydrogen issue, which is just a tool, it’s not good or bad, and depends on how it’s used. The most helpful thing you can do is craft recommendations dictating how to use the tool correctly for the climate.”

Fuel cells do not combust hydrogen, but work more like a battery, and are a useful tool in the climate toolkit, she said.

Kathleen McCarthy, a restoration ecologist in New York City, said she has been alarmed by climate change since first seeing “a climate model with all of the positive feedbacks. Now that those models and projections have not only been verified by present conditions but show us veering towards the worst-case scenario, I’m closer to being terrified.”

The animals and plants that sustain humanity cannot survive the changes projected without a drastic reduction in greenhouse gases, McCarthy said. “Now that we’re at the ninth hour, it’s important that our solutions be real solutions, not fake ones, so that we have a net reduction of greenhouse gases.”

Simon Strauss of the Ulster County Environmental Management Council and the Mid-Hudson Sustainability Coalition addressed the panel’s draft recommendation for “proactive and timely investment in local transmission and distribution infrastructure, and associated cost-sharing with utilities.”

“I’d like to ask how the panel, on behalf of the Climate Action Council, is going to, first, ensure that the utilities do make those proactive and timely investments, and second, how are those investments to be paid for? By the state, by the utility or by the ratepayers?” Strauss said.

He noted that in the pending Central Hudson Gas and Electric rate case, he has asked how the utility plans to address its CLCPA goals for renewable energy by 2030 and 2040.

“The impression I have is that other than local and transmission upgrades to permit large-scale renewables to be brought in on a wholesale basis, there is no plan to beef up the local distribution grid to accommodate local community-distributed generation,” Strauss said.

“And on these calls with this rate case we hear no dissent from the DPS staff, so I’d like to ask that you on the power generation panel give strong guidance to the Climate Action Council, and thus to the Department of Public Service, that you are looking for very significant distributed generation [DG] in the renewable energy generation mix, and an upgraded distribution system capable of accommodating that DG,” Strauss said.

Chairing the meeting, Sarah Osgood, director of policy implementation at the state’s Department of Public Service, confirmed one more public comment session on March 24 before the panel makes its final scoping plan recommendations to the CAC.

March 11, 2021November 1, 2023

Mass. Competition Fast-tracks Net-zero Building Innovation

A recent Massachusetts Clean Energy Center (MassCEC) competition to improve the energy efficiency of the state’s iconic triple-decker homes has sparked a new project to help make net-zero retrofits easier.

Gunnison, the recipient of the people’s choice prize in the Triple Decker Energy Efficiency Challenge, is developing a website that will identify options for renovating homes or buildings, along with upfront costs, long-term savings and energy performance.

“The problem with these renovations is that humans aren’t good at looking at hundreds of thousands of pieces of data and finding the best way to do this right,” founder Grant Gunnison said. “And so, the light bulb went off, and we said what we really need to do is make a catalog of all the different strategies and products so that you can search through a space to find the best and most cost-effective way to renovate a house.”

The contest asked participants to submit retrofit plans that would eliminate the use of on-site fossil fuels and reduce energy consumption. Designers and developers could plan a renovation for a typical triple-decker structure or add a unit as part of the design to offset costs for homeowners, who could rent the unit out.

MassCEC received 14 entries and awarded four winning prizes of $25,000, three runner-up prizes for $15,000, a people’s choice award of $15,000 and two honorable mentions.

“This challenge is a fun learning opportunity,” Gunnison said, and it gave him a basic knowledge of heat pumps and wall assemblies in unique buildings for the automated home renovation website.

As a researcher at MIT’s Space Telecommunications, Astronomy and Radiation Laboratory, Gunnison took a data-driven approach to the design that achieved net-zero emissions, but there is an “extremely high barrier to this kind of information,” he said.

To retrofit a house, most people have to hire an architect or a modeler from the engineering industry to understand what needs to be done and how, Gunnison said, and “they’re not cheap.”

The goal of Gunnison’s automated system for home renovations is to reduce the variance in the number of ways someone can retrofit a home to the most affordable options.

“What we were able to do is identify the most affordable way to actually hit net zero, and we want to democratize that,” he said.

There are 113 million buildings in the U.S., 70 million of which burn natural gas or other fossil fuels for heating and cooking. To keep the Earth’s warming below 1.5 degrees Celsius, building emissions need to be reduced by 45 to 50% by 2030 on the way to 100% by 2050, according to a report from the Intergovernmental Panel on Climate Change. That translates to about five million buildings per year in the U.S.

“We just don’t have enough engineers, architects and energy modelers to figure out how to retrofit every building,” Gunnison said. “That necessitates using computers to figure out how to get this done.”

His company is organizing a pilot with building owners and portfolio owners of affordable housing in Boston to gather more information for the automated system and scale it out to other building types — essentially recreating the MassCEC challenge with each building to reach net-zero emissions.

“We have to start to get pretty clever about how to figure that stuff out without going to the building because as soon as you step foot in the building, you’re spending too much time,” Gunnison said.

Improving Insulation

Triple-deckers, or three-story multifamily houses, were designed as housing for the immigrants who flooded into Massachusetts in the early 1900s. Revered for their classic look with numerous windows and balconies on each level, triple-deckers also have oil heating systems and little insulation.

The contest submission by OPAL Architecture and TIMBER HP, which won honorable mention for lowest embodied carbon, achieved a net-zero energy performance with a negative carbon footprint by focusing on insulation.

Buildings that meet the Passive House standard require three times the amount of insulation, but materials like foam are nonrecyclable and absorb moisture, creating mold and other toxic problems for homeowners.

Matt O’Malia (left) and Joshua Henry, co-founders of Timber HP, inside the old paper mill they are renovating in Madison, Maine, to manufacture wood fiber insulation for energy efficient homes. | Matt O’Malia

Insulation made from leftover wood residuals is a nontoxic material that does not hold moisture and would otherwise go to waste in landfills, Matt O’Malia, co-founder and partner of TIMBER HP and OPAL, said.

And because wood fiber sequesters carbon, “we are coming to the job site carbon-negative,” O’Malia said.

It also offers cost savings.

For structures like academic buildings, retrofitting or building walls and windows for better insulation with wood fiber costs the same as standard construction, he said. But it saves the institution 80% in operational costs.

TIMBER HP acquired an old paper mill in Madison, Maine, near massive forest reserves, to manufacture the product. By establishing its manufacturing site where paper mills went out of business, TIMBER HP is creating jobs where they were lost in a rural community, O’Malia said. The lost paper mills contributed $1.6 million annually to the state economy.

The new facility is set to start production in 2022. O’Malia predicted it will address 8% of the insulation market in New England at full capacity, meaning there is potential for additional plants across the country.

His team also developed a way to retrofit insulation from the outside of the home, so owners or renters do not need to leave while the renovation is happening.

“There are so many houses that have to be renovated. … You can’t ask all of these people to move out during this,” O’Malia said.

Later this year, MassCEC expects to help fund demonstration projects using the concepts from the triple-decker design competition.