Advanced Energy Perspectives

New York REV, Demo Projects Point Toward 21st Century Electricity System

Posted by Frank Swigonski

May 23, 2017 5:48:15 PM

    

This post is one in a series of feature stories on trends shaping advanced energy markets in the U.S. and around the world, drawn from Advanced Energy Now 2017 Market Report, which was prepared for AEE by Navigant Research.

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Utilities and electricity regulators in the United States and Europe are facing new electricity market realities: flat load growth, rapid adoption of distributed energy resources (DERs), emission reduction requirements, and ambitious goals for renewable energy deployment. In Q2 2016 alone, regulators across 42 states took more than 100 different regulatory actions addressing DER adoption, positively or negatively including measures on fixed charges, net metering, solar valuation, third-party ownership, and community solar. New York’s Reforming the Energy Vision proceeding (REV), launched in 2014, stands out as an example of a regulatory strategy that promotes more efficient energy use, better integration of renewables and onsite power, and more customer choice.

Specifically, REV is part of a broader push to achieve the following energy goals for New York’s electricity system by 2030:

  • 40% reduction in energy sector greenhouse gas (GHG) emissions from 1990 levels, ultimately decreasing total carbon emissions 80% by 2050;
  • 50% of all electricity generated by renewable energy sources;
  • 23% decrease in energy consumption in buildings from 2012 levels.

REV looks to fundamentally reorient the way electric utilities operate and make money. Under REV, regulated utilities will become operators of a Distributed System Platform (DSP), not just delivering power to customers from central power plants but also facilitating transactions between customers and third-party providers of DER products and services. Through this platform, customers large and small will be able to actively participate in electricity markets and connect with a range of service providers that can help them manage their electricity use and generate power themselves.

Under this construct a new valuation framework would allow DERs to compete in the marketplace based on the value of the benefits that they provide. In November 2016, the New York Department of Public Service (DPS) described the process this way: 

The modernization of New York’s electric system will involve a variety of products and services that will be developed and transacted through market initiatives. Products, rules, and entrants will develop in the market over time, and markets will value the attributes and capabilities of all types of technologies. As Distributed System Platform capabilities evolve, procurement of DER attributes will develop as well, from a near-term approach based on requests for proposals and load modifying tariffs, toward a more sophisticated auction approach.

The value flowing from the participation of these DERs would be shared by all the participants in the system. As a result, REV is attempting to transform DER from a growing threat to utilities’ bottom line to a central element of the electricity system transformation that aligns interests of utilities, third party service providers, and customers. If successful, New York would set an important precedent for other states.

Although much of the REV vision is still to be realized, 12 demonstration projects have been approved, with the purpose of testing new business models; creating new relationships between utilities, customers, and third-party service providers; and promoting innovation within utilities. These projects are intended to show how new products and services might capture latent value on the grid, and how new business models can monetize and distribute that value across third parties, utilities, and customers. As the demonstration projects roll out, and the DSP begins to take shape, other utilities and other states are expected to follow suit. The following table shows approved pilots and what they are testing.

NY REV Demonstration Projects

Demo Project

Partners

Objective

CenHub 
Marketplace

Simple Energy

To build an online marketplace bringing together residential customers with third-party DER providers

Building Efficiency Marketplace

Retroficiency

To build a clean energy marketplace for small commercial customers and identify energy efficiency opportunities

Clean Virtual Power Plant

SunPower and Sunverge

To provide bundled residential solar with storage offerings that can be aggregated and dispatched as a virtual power plant to meet local distribution energy needs

CONnectED Homes Platform

Bridgevine and Oracle

To create an online marketplace for residential customers to buy energy efficiency services and products

Buffalo Niagara Medical Campus Distributed System Platform (DSP)

Buffalo Niagara Medical Campus and others

To optimize DERs throughout Buffalo Niagara Medical Campus and test the benefits of a distributed system platform

Fruit Belt Neighborhood Solar

Buffalo Niagara Medical Campus and NYSERDA

To help low-to-moderate-income customers access clean energy and reduce arrears by creating a community rooftop solar program and pairing communications to deliver benefits to electricity system

Resiliency Demonstration in Potsdam

Clarkson University, SUNY Potsdam, and NYSERDA

To work with local customers and DER providers to fund a microgrid to test demand for premium resiliency services

Community Energy Coordination

Taitem Engineering

To aggregate and coordinate local demand for clean energy technologies, provide the greatest system benefits, and lower costs and increase benefits to customer

Flexible Interconnect Capacity Solution

Smarter Grid Solutions

To test a less costly and faster way for customers and third parties to connect large DER to the grid by providing an infrastructure-as-a-service

Residential Customer Marketplace

Simple Energy

To analyze data on an online marketplace engagement platform that helps find energy products and services to meet customers' needs

Energy Marketplace

Simple Energy

To launch an online marketplace to help customers better understand and manage their energy use

Commercial Battery Storage

GI Energy

Con Edison aims to address energy storage technologies and associated new business models which increasingly have the potential to support cost-effective solutions for distribution-level grid needs.

There is a long way to go in REV’s remaking of the utility business model for facilitating new customer options, many of which have not yet been imagined. REV has caught the attention of many other utilities facing similar challenges, and as a first-mover in many ways, will undoubtedly face years of refinement. But these dozen demonstration projects signal the start of experimentation about what a truly modern 21st century electricity system can offer.

Find out more about this year's advanced energy trends and the full size of the advanced energy market by downloading Advanced Energy Now 2017 Market Report, available for free at the link below:

Download the Report

Topics: Advanced Energy Now

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