New DER planning mannequin reveals why native solar-for-all prices much less
The network of the not too distant future will be clean, distributed and co-optimized. This means that the generation and other resources on transmission and distribution lines are designed and built to work together for maximum efficiency and savings for individual customers and the entire system.
The Federal Energy Regulatory Commission opened the door to such a system with its latest Ordinance 2222, urging US wholesale markets to level the playing field for distributed energy resources (DERs), including solar, storage and demand response. The challenge that network operators, utilities and regulators are now grappling with is to design such a system.
At least part of the answer, according to a new report, “Why Local Solar For All Costs Less,” is a planning model that includes what most integrated resource plans and solar cost-benefit analyzes leave out – a detailed and long-term view of the distribution system.
“Many of these studies have found that the benefits (of DERs) outweigh the costs, but they are informed by a limited amount of these resources,” said Jeff Cramer, executive director of the Coalition for Community Solar Access (CCSA) of the organizations behind the report. “But what if we’re talking about 20 or 30 years and hundreds of thousands of systems? In order for our industry to better understand how we scale and what advantages our technologies and business platforms offer for the entire network and all tariff payers, we had to carry out a new type of analysis. “
How it works: The model was developed by the industry consultants Vibrant Clean Energy (VCE) and offers a local solar roadmap based on a very detailed and highly mathematical view of network planning. Electricity flows and resources in the distribution system are viewed in slices of 5 minutes and 3 square kilometers. The operational variables built into the model are equally detailed and include multiple applications for energy storage, new technologies such as hydrogen, and the increasing stress on the system due to climate change.
Results: Loading the model with a range of scenarios results in impressive top-line numbers based solely on direct system costs and benefits. When compared to business as usual (BAU), the analysis found that adopting a federal clean energy standard, with DERs providing more than 10% of national energy, would save the United States $ 473 billion by 2050 while saving over $ 2 billion Could create millions of new jobs.
In this scenario, scaling “a hell of a lot more” local solar and storage capacity will be critical, Cramer said – about 223 additional gigawatts by 2050, combined with even more utility-scale solar and wind power than in a BAU scenario.
These results confirm what the organizations behind the report – solar attorneys CCSA and Vote Solar, and residential installer Sunrun – have argued for years, said Anne Hoskins, Sunrun’s chief policy officer. DERS plays a critical role in “predictive systems planning to provide efficient, effective and reliable solutions to an aging network with changing customer needs,” she said.
Christopher Clack, founder and CEO of VCE, said the model also shows that “it’s not just the individual assets that matter. In this way, these different assets come together and then begin to interact with other preexisting assets. It’s the interactions that give you the benefit. “
Change hardware, not society
The Local Solar Roadmap comes at a crucial time in the US energy transition. A growing number of cities, states and large corporations are committed to 100% clean energy goals, and the future administration of President-elect Joe Biden is aiming for a decarbonized grid by 2035. The existential question for all stakeholders is how do we get from here to there.
Utilities and regulators, traditionally lagging behind in technology, have responded by adopting an integrated approach to resource planning that at least includes renewable energies in the utility scale, but progress across states has been mixed.
The key challenge here is that the utilities are still doing the planning. Their models often contain little data at the distribution level and are based on a “false dichotomy” between utility gains and third-party DER providers, said Karl Rabago, industry advisor and co-author of the report.
VCE’s model solves this dichotomy by selecting resources based solely on whether they deliver both net cost savings for the system and bill savings for customers, Cramer said.
“Conventional thinking is big (solar) is cheaper; small is more expensive, ”said Cramer. “But with new and better models, better data, and better inputs, we’ve found that utility-scale local solar and solar and storage systems together are the most cost-effective option.”
Additionally, a co-optimized grid with strong local solar and storage capacity on the distribution side can potentially shift demand to meet supply without requiring customers to make major changes to their consumption or behavior patterns, Clack said.
“Hardware is easier to change than society,” he said. “The model basically says that we need to be able to change demand to better meet supply, and to do that we need distribution resources like solar, storage and demand response.”
Better data, better decisions
While Cramer is advancing the model as a potential enabler for the industry, he also recognizes that the results on the local solar roadmap are only a first step. Further additions and iterations are required. For example, since the report only deals with direct system costs and benefits, an expanded VCE model is required to take into account the indirect benefits of DER for the environment and equity, as well as the stronger tax base and the new jobs generated by DER for the local economy.
Business and regulatory models are another blind spot, but again, the model shows that changing the traditional supply-demand equation requires more than new, super-intelligent hardware. In a jointly optimized network, houses and buildings will act as network resources, which also means that technologies behind the meter – solar, storage and demand response – must enable better visibility and data sharing between customers, third-party vendors and utilities.
On the plus side, partnerships between utilities and third-party providers are growing across the industry, and smart thermostats and other energy management systems make the meter a more permeable interface between customers and the grid. However, utility ownership of DERs remains a sensitive issue – and likely will remain so as long as investor-owned utility profits are based on the cost of capital – building more power, cables, and other infrastructure.
A co-optimized network could instead open the door to performance-based regulation and link utility company profits to specific performance goals such as better efficiency, reliability and resilience by coordinating transmission and distribution systems.
Cramer sees the VCE model as a catalyst for the cross-industry discussions and collaboration necessary to develop such win-win solutions that benefit all parties.
“Interconnection, grid measurement or system planning – almost every decision we make at the political level – they are all aware of these results,” he said. “We should be using new, better models, with better data, to make all of our decisions because if we don’t, there are potential costs – and savings – of hundreds of billions of dollars on the table.”
K merchant is an independent journalist.