The Great Transition out of fossil fuels is accelerating with China and India leading the way in solar and with Europe considered best prepared to overcome challenges imposed by operating legacy infrastructure.
This according to the World Economic Forum’s Effective Energy Transition report, based on analytical support from McKinsey & Co who assessed the energy systems of 114 countries.
The US is falling behind.
Here, the grid is operated by independent service operators (ISO’s) and Regional Transmission Operators (RTO’s) who transmit electricity along large distances and deliver it to independent utility companies like PG&E, or Florida Power and Light, FPL, who resell it to end customers. The independent utility companies are often regulated monopolies who have no economic incentive to change. Many of them defend their territorial access to the grid aggressively through legislation and regulation rather than adapt to demand for smaller scale Distributed Energy Resources (DER) –in this case, offsite plants financed by solar and wind investors.
Like SCANA and Duke Energy in South Carolina who stalled legislation to raise Net Metering caps on a technicality earlier this year, or the infamous NV Energy who had to reverse course after lobbying the Nevada public utility commission into a disastrous termination of that state’s Net Metering agreement three years ago which turned into a voter’s revolt.
Companies like Staten Solar can produce and deliver electricity for commercial and industrial clients at nearly half the cost charged by PG&E or SCE, but are discouraged from doing so by regulations written by and for the monopolies.
In California, for example, there are programs in place -limited in the number of customers who can benefit from them- to allow offsite generation, but they are rigged so that solar companies cannot sell their electricity at a profit. The utility companies tell the CPUC what selling price solar companies can charge and set it at well below wholesale price.
Integrating DER is complex, because the impact two-way flows can have on the system. It needs coordination and cooperation never seen before. Two weeks ago at the FERC technical conference in DC, grid operators and regulators began to map out the complexities involved to develop DER aggregation with storage (batteries). California Public Utility Commission (CPUC) president Michael Picker focused on developing appropriate rates and tariffs and called for a DER roadmap.
California Public Utility Commission (CPUC) president Michael Picker focused on developing appropriate rates and tariffs and called for a DER roadmap.
The demand for wholesale load pricing for commercial accounts is building up and, just as water always finds its own level, demand is exploring paths to circumvent the obstacles. Customers want access to offsite generated electricity.
Big companies get satisfaction, Google, Apple, Facebook, Kimberly Clark, and General Motors led the way in 2017 which saw 2.78 gigawatts of electricity purchased offsite through wind and solar corporate ppa’s.
In March, Microsoft signed the largest ppa securing 315MW in Virginia as the anchor tenant of sPower’s 500MW plant. The other 185MW will be sold to other businesses at greatly reduced rates.
States on the east coast have embraced DER, NY, NH are promoting community solar developments. Microgrids and blockchains are springing up everywhere.
Staten is looking to implement creative, elegant DER strategies in California.
The Transition is happening, water always finds its level. Relief is on the way. Slowly, but surely.
Director of Marketing