Harvey T Expanding Scope Presentation
• Serving Austin Since 1895 • 8th largest publicly owned electric utility in US – 420,000 customer accounts (serving >1 million residents in Greater Austin) – Peak Demand: 2,700 MW – Owns & operates 11,398 miles of distribution grid
• Austin Energy serves 4% of Texas residents, yet accounts for 30% of Texas’ solar capacity 3
• Early market development efforts – US DOE Solar America City – 40 local solar companies
• 100% green power for municipal operations – Onsite solar PV (>50 sites) – GreenChoice participation
4
• 11 year rebate history:
• Developed strong local solar market, with 40+ solar – $46M for 3,790 residential projects to date companies – $22M for 226 commercial projects committed to date
• Among lowest installed costs in the country • Pioneered Value of Solar, promoting conservation and improving equity among customers 5
Under net metering in a tiered rate structure: • Customers with higher consumption are compensated at a higher value per kWh than customers in lower tiers – Equity issue – Regressive – Doesn’t encourage energy efficiency
• Customers with lower levels of consumption are compensated at a level below the value of the energy to the system – Disincentive for energy efficient homes to go solar
• Customers with higher levels of consumption are compensated at a level above the value of the energy to the system – Signal sent to customers is that production offsetting higher tiers of consumption is more valuable to the utility – The utility under-recovers the cost of service, having to spread that cost across all customers
4
• Recovers fixed costs
• Better reflects value of local generation
$0.18 $0.16
$0.168
$0.14
under NEM
$0.12
$/kWh
• Improves equity – Between solar customers – Between solar and non-solar customers
Value of Generation to Solar Customers under NEM vs VoS
2015 VOS @ $.113/kWh
$0.10 $0.08
$0.09
$0.06
under NEM
$0.04 $0.02
• Promotes efficiency & conservation
$Tier 1
Tier 5
4
• Avoided cost study – Attempts to quantify value at which the utility is “neutral” to paying for locally generated PV
• First study conducted in 2006 by Clean Power Research, value used internally • Value has fluctuated historically based on market changes • Alternative to net energy metering • Integrated into residential solar tariff in 2012 • Reviewed annually and value adopted by Council through budget process 8
Value of Solar Assessment Components Basis
Value Component Guaranteed Fuel Avoided cost of fuel to meet electric loads and Value transmission and distribution losses, based on the solar production profile, inferred from ERCOT market price data & guaranteed future natural gas prices Plant O&M Avoided costs associated with natural gas plant Value operations and maintenance by meeting peak load through renewable sources. Generation Avoided capital costs of generation by meeting peak Capacity Value load through renewable sources, inferred from ERCOT market price data. T&D Capacity Savings in transmission costs resulting from the Value reduction in the peak load by renewable sources. Environmental Avoided cost to comply with environmental Compliance regulations and local policy objectives Value
9
Residential Solar Tariff: • Meter consumption and production separately • Customer billed for whole house consumption – Energy delivered (by utility) to home, plus total energy produced by PV, minus solar energy received by utility
• Customer credited for solar production – Credited for all solar generation, whether used onsite in real time, or sent back to grid • Solar credit = Total kWh produced x VoS factor
18 16
VOS Implementation
14 12 10 8 6 4 2 0
FY15
FY14
FY13
FY12
FY11
FY10
FY09
FY08
FY07
FY06
FY05
FY04
– Balance applied to electric bill until it zeroes, remaining credits roll over monthto-month
Residential MW-ac Installed through Feb 2015
10
Cautious Consideration for Fair Value • Carefully Calculated • Consistently Conducted • Clearly Communicated • Completely Uncoupled • Equitable Economics
• Accurate and Granular Data – Local Specific – Smart Grid – Data Management Tools
• Value Assessment Methodology – Expert Input – Stakeholder Input – Transparent Process – Review Process
• Consistent Re-Evaluation • Consistent Methodology and Application • Replicate Processes • Accurate Billing
• • • •
Upfront Information Customer Agreements Bill Display Smart Apps – Usage and Production Information – System health reporting – Value Reports
• Accessible Experts
• Offerings for Customer Provided Services – Value should be clearly defined – Recognize opportunities for customers to provide multiple services
• Consumption Rate – Keep it independent from the consumption rate
• Incentives – Keep incentives separate – They should have their own justification
• Customer/Investor –Return on Investment • Risk –Rate Volatility • Utility –Know the costs /value –Value based crediting
Capacity-Based Subscription model under consideration: – Customers sign up for capacity (kW) blocks in 1 kW increments – Monthly subscription fee per kW block (e.g. $11/kW levelized cost of capacity) – Receive a bill credit for the generation from their subscribed capacity at a modified Value of Solar rate (e.g. VOS less T&D value = $0.085/kWh in 2015)
17
• Smart Inverters – Volt/VAR Support
• Batteries/Storage – Demand response – Peak shaving & load shifting – Voltage, reactive power, & frequency regulation
• Demand Response – Load shed at critical peak(s)
• Energy Efficiency & Controls – Load reduction (demand & energy) – Smart control of HVAC, lighting & appliances
• EV Smart Charging – Charging when renewable production is high and loads are low – Voltage & frequency regulation
______________________________________
Tim Harvey
Environmental Program Coordinator Solar Programs Austin Energy
[email protected] Phone: (512) 482-5386 www.austinenergy.com
• Austin Energy serves 4% of Texas residents, yet accounts for 30% of Texas’ solar capacity 3
• Early market development efforts – US DOE Solar America City – 40 local solar companies
• 100% green power for municipal operations – Onsite solar PV (>50 sites) – GreenChoice participation
4
• 11 year rebate history:
• Developed strong local solar market, with 40+ solar – $46M for 3,790 residential projects to date companies – $22M for 226 commercial projects committed to date
• Among lowest installed costs in the country • Pioneered Value of Solar, promoting conservation and improving equity among customers 5
Under net metering in a tiered rate structure: • Customers with higher consumption are compensated at a higher value per kWh than customers in lower tiers – Equity issue – Regressive – Doesn’t encourage energy efficiency
• Customers with lower levels of consumption are compensated at a level below the value of the energy to the system – Disincentive for energy efficient homes to go solar
• Customers with higher levels of consumption are compensated at a level above the value of the energy to the system – Signal sent to customers is that production offsetting higher tiers of consumption is more valuable to the utility – The utility under-recovers the cost of service, having to spread that cost across all customers
4
• Recovers fixed costs
• Better reflects value of local generation
$0.18 $0.16
$0.168
$0.14
under NEM
$0.12
$/kWh
• Improves equity – Between solar customers – Between solar and non-solar customers
Value of Generation to Solar Customers under NEM vs VoS
2015 VOS @ $.113/kWh
$0.10 $0.08
$0.09
$0.06
under NEM
$0.04 $0.02
• Promotes efficiency & conservation
$Tier 1
Tier 5
4
• Avoided cost study – Attempts to quantify value at which the utility is “neutral” to paying for locally generated PV
• First study conducted in 2006 by Clean Power Research, value used internally • Value has fluctuated historically based on market changes • Alternative to net energy metering • Integrated into residential solar tariff in 2012 • Reviewed annually and value adopted by Council through budget process 8
Value of Solar Assessment Components Basis
Value Component Guaranteed Fuel Avoided cost of fuel to meet electric loads and Value transmission and distribution losses, based on the solar production profile, inferred from ERCOT market price data & guaranteed future natural gas prices Plant O&M Avoided costs associated with natural gas plant Value operations and maintenance by meeting peak load through renewable sources. Generation Avoided capital costs of generation by meeting peak Capacity Value load through renewable sources, inferred from ERCOT market price data. T&D Capacity Savings in transmission costs resulting from the Value reduction in the peak load by renewable sources. Environmental Avoided cost to comply with environmental Compliance regulations and local policy objectives Value
9
Residential Solar Tariff: • Meter consumption and production separately • Customer billed for whole house consumption – Energy delivered (by utility) to home, plus total energy produced by PV, minus solar energy received by utility
• Customer credited for solar production – Credited for all solar generation, whether used onsite in real time, or sent back to grid • Solar credit = Total kWh produced x VoS factor
18 16
VOS Implementation
14 12 10 8 6 4 2 0
FY15
FY14
FY13
FY12
FY11
FY10
FY09
FY08
FY07
FY06
FY05
FY04
– Balance applied to electric bill until it zeroes, remaining credits roll over monthto-month
Residential MW-ac Installed through Feb 2015
10
Cautious Consideration for Fair Value • Carefully Calculated • Consistently Conducted • Clearly Communicated • Completely Uncoupled • Equitable Economics
• Accurate and Granular Data – Local Specific – Smart Grid – Data Management Tools
• Value Assessment Methodology – Expert Input – Stakeholder Input – Transparent Process – Review Process
• Consistent Re-Evaluation • Consistent Methodology and Application • Replicate Processes • Accurate Billing
• • • •
Upfront Information Customer Agreements Bill Display Smart Apps – Usage and Production Information – System health reporting – Value Reports
• Accessible Experts
• Offerings for Customer Provided Services – Value should be clearly defined – Recognize opportunities for customers to provide multiple services
• Consumption Rate – Keep it independent from the consumption rate
• Incentives – Keep incentives separate – They should have their own justification
• Customer/Investor –Return on Investment • Risk –Rate Volatility • Utility –Know the costs /value –Value based crediting
Capacity-Based Subscription model under consideration: – Customers sign up for capacity (kW) blocks in 1 kW increments – Monthly subscription fee per kW block (e.g. $11/kW levelized cost of capacity) – Receive a bill credit for the generation from their subscribed capacity at a modified Value of Solar rate (e.g. VOS less T&D value = $0.085/kWh in 2015)
17
• Smart Inverters – Volt/VAR Support
• Batteries/Storage – Demand response – Peak shaving & load shifting – Voltage, reactive power, & frequency regulation
• Demand Response – Load shed at critical peak(s)
• Energy Efficiency & Controls – Load reduction (demand & energy) – Smart control of HVAC, lighting & appliances
• EV Smart Charging – Charging when renewable production is high and loads are low – Voltage & frequency regulation
______________________________________
Tim Harvey
Environmental Program Coordinator Solar Programs Austin Energy
[email protected] Phone: (512) 482-5386 www.austinenergy.com
