2015.09.29 Julia Hamm BFW
Helping Utilities Make Smart Solar Decisions
The Nexus Between Utilities, Solar and Distributed Energy Resources
Expanded Mission
We enable the transition to a clean energy economy by facilitating utility integration and deployment of solar, distributed energy resources, and supporting technologies onto the grid.
Business Confidential
Helping Utilities Make Smart Solar Decisions 2
Guiding Principles • Utilities must be a critical part of the equation for solar and DER to live up to full potential in serving the public good. • The "long term" economic health of utilities, technology companies, developers and customers will be strengthened through partnership. • The regulatory compact must evolve to support utility business models that encourage both central station solar and distributed energy deployment. • Upgrades and advancements are needed to grid infrastructure, enabling technologies, and grid operations in order for solar and DER to reach maximum potential. Business Confidential
Helping Utilities Make Smart Solar Decisions 3
Key Themes & Subject Matter Key Themes
Key Subject Matter
Transforming the grid The transmission and distribution systems will undergo significant change in the future to accommodate the growth of DERs and the rapid advancements in available control technologies
Adapting the utility business model Utilities will need to make changes to their core operations and offerings to adapt to a future that is more distributed and bi-directional in nature
Proactively engaging consumers Customer engagement is critical to the success of tomorrow’s grid, and understanding customer desires up front rather than after-the-fact can drive innovation and success
Diversifying energy portfolios Utility-scale solar, large- and small-scale storage, and DERs will be
– Market trends – Program design – community solar, integrated offerings – Grid integration – implications on business planning – Asset management – The customer transaction / the changing customer value proposition – Energy analytics – customers, grid – Distributed Resource Planning (DRP)/IRP integration and DRP evaluation – Clean Power Plan
leveraged to create a least-risk and ultimately least-cost energy future
Business Confidential
Helping Utilities Make Smart Solar Decisions 4
The Challenge: BFW
Business Confidential
Big Frickin’ Wall
Where you are now
Where you can get with incremental improvements
Where you need to be
Helping Utilities Make Smart Solar Decisions 5
Incremental Improvements SEPA’s focus every day through: • Education • Research • Advisory services
Business Confidential
Helping Utilities Make Smart Solar Decisions 6
Big Frickin’ Wall What’s on the other side? How do you get over it?
Business Confidential
Helping Utilities Make Smart Solar Decisions 7
Step 1: Identify the Starting Point
• • • •
How can the “current state” be described? What characterizes this market? What type of utility serves it? What policies are in place today?
Business Confidential
Helping Utilities Make Smart Solar Decisions 8
Step 2: Determining Change
Business Confidential
Helping Utilities Make Smart Solar Decisions 9
Retail Market Design
How will retail markets be structured? Is there full retail competition or just for certain customer classes? Do customer classes need to be redefined based on technologies instead of residential/commercial/etc.? How do low- and limited-income customers get treated? How do customers interact with the grid, and is it different for different customer classes? What products and services are consumers buying, who sells them, and how are they valued?
Business Confidential
What options exist for customers who want their electricity transaction to remain largely unchanged from today? Do customers opt in to all of the technological integration choices or opt out? Who invests in technologies behind the meter, and who is responsible for operating, monitoring, and controlling them? Who is responsible for planning, operations, and maintenance? Who can own DERs? Who owns the data generated by DERs on customer premises?
Helping Utilities Make Smart Solar Decisions 10
Wholesale Market Design Is the wholesale market Who can own based on an RTO/ISO or transmission? some other model? Who is responsible for Who can own generation? transmission planning and Who is responsible for operations? generation dispatch How are wholesale decisions? generation and How are DERs accounted transmission costs for in the capacity planning recovered? process? Business Confidential
Helping Utilities Make Smart Solar Decisions 11
Utility Business Model What role does the utility What is the revenue model play? for utilities? What level of participation What investments can can the utility have in utilities make, and how do wholesale and retail those get recovered? markets? How can they recover Will utilities remain stranded asset costs (if responsible for societal any)? services such as low income support, or will those be assumed by other parties? Business Confidential
Helping Utilities Make Smart Solar Decisions 12
Asset Deployment
What wholesale generation resources are required, what triggers those investments, and who plans and owns them? What transmission system technologies are required, what triggers those investments, and who plans and owns them? What distribution system technologies are required, what triggers those investments, and who plans and owns them? What on-premise technologies (including service drop through the meter) are required?
Business Confidential
Who determines the investment requirements? How are new technologies, standards, etc., adopted and incorporated? Who is responsible for asset operations and maintenance? What are the timing requirements and triggers associated with these new technologies getting deployed? What are the physics of grid operation, and who ensures a diversity of generation resources are deployed to minimize risk? Helping Utilities Make Smart Solar Decisions 13
IT
What functionalities and capabilities are required for tracking and analyzing the data requirements? What functionalities and capabilities are required in the utility’s back office systems (CIS, MDMS, etc.)? To what extent is real-time information and communications exchange required? Who owns customer data and information, and how is it safeguarded?
Business Confidential
Who is responsible for these investments? What protocols and other safeguards are needed, and who is responsible for, cyber-security? Are decisions made between devices in the real time, or are decisions made at a central operator and pushed downstream? How frequently and quickly must decisions be made based on the data collected?
Helping Utilities Make Smart Solar Decisions 14
Rates & Regulation
What level of regulation is required in wholesale and retail markets, and what entities are subject to regulation? What do consumer protection regulations look like, and who is ultimately responsible for enforcing them? What is required to monitor and prevent market manipulation at the retail level? What entity (utility, 3rd party, etc.) ultimately bears the risk for safety and reliability, and how are they compensated for those services?
Business Confidential
What is the predominant retail rate structure, and is that an opt-in or opt-out for residential customers? How are utility fixed and variable investments recovered? Is performance-based ratemaking appropriate? Under what structure can DERs transact?
Helping Utilities Make Smart Solar Decisions 15
Step 3: Identifying the Incremental Changes & Triggers
• Focus on an incremental transformation • Understand what needs to occur before moving forward • Identify major indicators that could signal a course correction Business Confidential
Helping Utilities Make Smart Solar Decisions 16
Putting it All Together: Developing a Roadmap
Business Confidential
Helping Utilities Make Smart Solar Decisions 17
Mahalo!
Business Confidential
Helping Utilities Make Smart Solar Decisions 18
The Nexus Between Utilities, Solar and Distributed Energy Resources
Expanded Mission
We enable the transition to a clean energy economy by facilitating utility integration and deployment of solar, distributed energy resources, and supporting technologies onto the grid.
Business Confidential
Helping Utilities Make Smart Solar Decisions 2
Guiding Principles • Utilities must be a critical part of the equation for solar and DER to live up to full potential in serving the public good. • The "long term" economic health of utilities, technology companies, developers and customers will be strengthened through partnership. • The regulatory compact must evolve to support utility business models that encourage both central station solar and distributed energy deployment. • Upgrades and advancements are needed to grid infrastructure, enabling technologies, and grid operations in order for solar and DER to reach maximum potential. Business Confidential
Helping Utilities Make Smart Solar Decisions 3
Key Themes & Subject Matter Key Themes
Key Subject Matter
Transforming the grid The transmission and distribution systems will undergo significant change in the future to accommodate the growth of DERs and the rapid advancements in available control technologies
Adapting the utility business model Utilities will need to make changes to their core operations and offerings to adapt to a future that is more distributed and bi-directional in nature
Proactively engaging consumers Customer engagement is critical to the success of tomorrow’s grid, and understanding customer desires up front rather than after-the-fact can drive innovation and success
Diversifying energy portfolios Utility-scale solar, large- and small-scale storage, and DERs will be
– Market trends – Program design – community solar, integrated offerings – Grid integration – implications on business planning – Asset management – The customer transaction / the changing customer value proposition – Energy analytics – customers, grid – Distributed Resource Planning (DRP)/IRP integration and DRP evaluation – Clean Power Plan
leveraged to create a least-risk and ultimately least-cost energy future
Business Confidential
Helping Utilities Make Smart Solar Decisions 4
The Challenge: BFW
Business Confidential
Big Frickin’ Wall
Where you are now
Where you can get with incremental improvements
Where you need to be
Helping Utilities Make Smart Solar Decisions 5
Incremental Improvements SEPA’s focus every day through: • Education • Research • Advisory services
Business Confidential
Helping Utilities Make Smart Solar Decisions 6
Big Frickin’ Wall What’s on the other side? How do you get over it?
Business Confidential
Helping Utilities Make Smart Solar Decisions 7
Step 1: Identify the Starting Point
• • • •
How can the “current state” be described? What characterizes this market? What type of utility serves it? What policies are in place today?
Business Confidential
Helping Utilities Make Smart Solar Decisions 8
Step 2: Determining Change
Business Confidential
Helping Utilities Make Smart Solar Decisions 9
Retail Market Design
How will retail markets be structured? Is there full retail competition or just for certain customer classes? Do customer classes need to be redefined based on technologies instead of residential/commercial/etc.? How do low- and limited-income customers get treated? How do customers interact with the grid, and is it different for different customer classes? What products and services are consumers buying, who sells them, and how are they valued?
Business Confidential
What options exist for customers who want their electricity transaction to remain largely unchanged from today? Do customers opt in to all of the technological integration choices or opt out? Who invests in technologies behind the meter, and who is responsible for operating, monitoring, and controlling them? Who is responsible for planning, operations, and maintenance? Who can own DERs? Who owns the data generated by DERs on customer premises?
Helping Utilities Make Smart Solar Decisions 10
Wholesale Market Design Is the wholesale market Who can own based on an RTO/ISO or transmission? some other model? Who is responsible for Who can own generation? transmission planning and Who is responsible for operations? generation dispatch How are wholesale decisions? generation and How are DERs accounted transmission costs for in the capacity planning recovered? process? Business Confidential
Helping Utilities Make Smart Solar Decisions 11
Utility Business Model What role does the utility What is the revenue model play? for utilities? What level of participation What investments can can the utility have in utilities make, and how do wholesale and retail those get recovered? markets? How can they recover Will utilities remain stranded asset costs (if responsible for societal any)? services such as low income support, or will those be assumed by other parties? Business Confidential
Helping Utilities Make Smart Solar Decisions 12
Asset Deployment
What wholesale generation resources are required, what triggers those investments, and who plans and owns them? What transmission system technologies are required, what triggers those investments, and who plans and owns them? What distribution system technologies are required, what triggers those investments, and who plans and owns them? What on-premise technologies (including service drop through the meter) are required?
Business Confidential
Who determines the investment requirements? How are new technologies, standards, etc., adopted and incorporated? Who is responsible for asset operations and maintenance? What are the timing requirements and triggers associated with these new technologies getting deployed? What are the physics of grid operation, and who ensures a diversity of generation resources are deployed to minimize risk? Helping Utilities Make Smart Solar Decisions 13
IT
What functionalities and capabilities are required for tracking and analyzing the data requirements? What functionalities and capabilities are required in the utility’s back office systems (CIS, MDMS, etc.)? To what extent is real-time information and communications exchange required? Who owns customer data and information, and how is it safeguarded?
Business Confidential
Who is responsible for these investments? What protocols and other safeguards are needed, and who is responsible for, cyber-security? Are decisions made between devices in the real time, or are decisions made at a central operator and pushed downstream? How frequently and quickly must decisions be made based on the data collected?
Helping Utilities Make Smart Solar Decisions 14
Rates & Regulation
What level of regulation is required in wholesale and retail markets, and what entities are subject to regulation? What do consumer protection regulations look like, and who is ultimately responsible for enforcing them? What is required to monitor and prevent market manipulation at the retail level? What entity (utility, 3rd party, etc.) ultimately bears the risk for safety and reliability, and how are they compensated for those services?
Business Confidential
What is the predominant retail rate structure, and is that an opt-in or opt-out for residential customers? How are utility fixed and variable investments recovered? Is performance-based ratemaking appropriate? Under what structure can DERs transact?
Helping Utilities Make Smart Solar Decisions 15
Step 3: Identifying the Incremental Changes & Triggers
• Focus on an incremental transformation • Understand what needs to occur before moving forward • Identify major indicators that could signal a course correction Business Confidential
Helping Utilities Make Smart Solar Decisions 16
Putting it All Together: Developing a Roadmap
Business Confidential
Helping Utilities Make Smart Solar Decisions 17
Mahalo!
Business Confidential
Helping Utilities Make Smart Solar Decisions 18
