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Monthly Archives: October 2015

Value Far Beyond Demand Charge Reduction

Peak demand reduction is only one of many value streams for behind-the-meter storage, a new study finds.

by Katherine Tweed
October 07, 2015

In the U.S., behind-the-meter energy storage is mostly sold to offset commercial peak demand charges. The business case works today in states such as California and New York, but it also leaves most of the battery’s value on the table, according to a new report from Rocky Mountain Institute.

RMI’s meta review of the value of energy storage, pulling from many previous studies, found that batteries dispatched solely for demand reduction are only used for about 5 percent to 20 percent of their useful life. RMI identified 13 distinct services for customers and grid operators, but when it comes to stacking those, there is immense variation in the final cost-benefit depending on assumptions and inputs such as local utility regulations and wholesale market mechanisms.

The report was written not just to validate what progressive states like New York, California and Hawaii are doing, but also to show what’s possible in other states.

“Valuing batteries is not as simple as looking at just solar or looking at retail or wholesale grid costs,” said Jesse Morris, manager of the electricity practice at RMI. “A lot of regulatory changes need to happen.”

To better capture the complexity, the RMI study modeled four primary use cases for batteries: commercial demand-charge management in San Francisco; distribution upgrade deferral in New York; residential bill management in Phoenix; and solar self-consumption in San Francisco.

Three of those use cases, which were paired with secondary services such as ancillary services, resource adequacy or time-of-use optimization, were revenue-positive by a small margin. The New York use case was the exception.

The study found that in […]

Views from Napa Valley: A Peak at California’s Low Carbon Fuels Program

By Michele Rubino, Special to The Digest

A few years ago, when it was fashionable to consider California a failed State with a bankrupt, dysfunctional government and outrageously high taxes (only the latter is actually true), the State of Nevada started running ads in different California media markets to convince businesses to relocate. The response was swift. Within days, counter-ads were on air stating “What happens in Vegas, stays in Vegas. What happens in California makes the world spin”

It is with the same sense of excitement that I am once again witnessing California’s global leadership in energy and environmental policies and markets. With the backdrop of Napa’s rolling hills and spectacular wineries, a diverse group of professionals – ranging from carbon traders to power companies, gas utilities, integrated oil companies, independent refiners and petroleum distributors and retailers, technology and project developers across energy production, distribution and efficiency – got together this week to discuss the future of California’s sprawling climate change policy. The event: the Argus California Carbon and LCFS summit.

The topic is a complex one. It all started with AB 32, the Global Warming Solutions Act of 2006. AB 32 is now implemented covering the entire economy in California. Markets for carbon allowances and offsets are established and in full swing. The law is unmistakably driving change and investment in the private sector, creating and shifting revenues, profits and wealth, redefining winners and losers across multiple industries. It is also generating billions of dollars in cap-and-trade auction proceeds into the Greenhouse Gas Reduction Fund (GGRF).

Predictably, lobbyists representing a multitude of industries are making their claims to these funds (and the biofuels industry needs to make its own). As is always the case in energy […]

California finalizes 50%-by-2030 renewables mandate

California Gov. Jerry Brown (D) signed Senate Bill 350 (SB 350) into law, officially moving the state to a 50% renewables by 2030 mandate, the Los Angeles Times reports.

SB 350 also mandates a 50% energy efficiency increase for existing California buildings by 2030, giving state energy agencies the authority to review existing programs, alter regulations and rechannel funding to achieve the higher efficiency mandate.

Heavy lobbying by the oil and auto industries forced State Sen. Kevin de León (D), who authored the bill, to remove a requirement calling for a 50% cut in petroleum use by 2030. But Brown declared he will exercise executive power through the state’s Air Resources Board to regulate petroleum use.

California just cemented its position as a leader in the renewable energy sector. Gov. Jerry Brown (D) declared the law will make a positive mark on an emerging “climate catastrophe” while mending the health impacts of air pollution.

“This is going to be a long march to transition the entire modern world to a decarbonized future,” Brown said. “It’s important, and we’re doing it in California.”

The 50% renewables mandate will be implemented by the California Public Utilities Commission (CPUC) for investor-owned utilities, and by the California Energy Commission for municipal utilities. Each utility must submit a procurement plan for review by the authorizing agency.

California’s investor-owned utilities are well on their way to meeting the state’s previous 33% renewables by 2030 mandate, PV Magazine reported. Utility officials and energy analysts have told Utility Dive the companies are capable of meeting a 50% renewables goal by 2030 despite the challenges associated with the goal.

There is, deep within the text of SB 350, “a full codification of the 2030 and 2050 climate targets” which […]