WInds of Change: Hurricane Sandy Is Ushering in a Smarter Power System

shutterstock_117648394Written with Dan Kammen, a Clean Coalition Board member and Distinguished Professor of Energy at the University of California, Berkeley where he directs the Renewable and Appropriate Energy Laboratory.

It’s ironic that a storm whose widespread blackouts left millions of Americans in the dark is finally helping us see the light.

Hurricane Sandy brought devastation and loss to the Eastern seaboard. The storm exposed the severe vulnerability of our electricity infrastructure and made global headlines as a harbinger of nature’s impacts in a climate changed world.

Beyond the shock, New Yorkers found a silver lining in the destruction. The storm made crystal clear that the existing electricity system is not suited to address the challenges of the 21stcentury. In response, New York State recently released a powerful report illuminating how it plans to create a more affordable, efficient and more reliable grid.

Titled Reforming the Energy Vision, this game-changing document calls for a new approach to generating, managing, and delivering electricity throughout New York. The state proposes to replace aging infrastructure by investing nearly $30 billion over the next decade to develop a smarter electricity system. State officials, seeing the performance and cost benefits, are moving quickly to put this vision into action.

Central to the new strategy is replacing two obsolete paradigms: that the model of centralized generation combined with long-distance transmission is the most cost-effective option, and that utility customers should only consume – not produce – grid services.

When it comes to the electricity system, Sandy helped to make clear that bigger isn’t always better. To expand grid services, we have historically incentivized utilities to build large power plants and big transmission infrastructure. This has led to an inefficient and overly expensive electricity system.

States across the country have built significantly bigger systems than necessary. For example, New York’s electricity system uses just 60 percent of the electricity it is capable of generating, on average, because many power plants operate only a small number of hours each year when demand for electricity is highest. Additionally, roughly 10 percent of transmission-dependent power is lost because of inefficiencies associated with power traveling long distances. New Yorkers, as a result, pay more for electricity than they should.

Now, smart information systems, energy efficiency, and local renewables are challenging this centralized paradigm in terms of performance and costs. These distributed energy resources can provide resilient, affordable electricity services driven by private investment and innovation. Universities are often ideal demonstration sites for these new power systems:  The 38 megawatt Cornell University microgrid and the 12 megawatt facility for New York University  are both examples that are performing well and changing perceptions of the historical divide between producer and consumer of energy.

To unleash distributed energy resources in New York, officials are redefining the relationship between utilities, their customers, and the power grid. Rather than simply providing energy as a commodity, New York now sees its utilities as businesses that can be incentivized to provide electricity as a service. Moving forward utilities will manage the grid as a platform where innovative businesses compete to provide grid services. The result can be drastically improved performance of the electricity system and reduced costs for everyone.

New York is on the right track and leading the nation towards a clean, efficient and reliable electricity system. Yet, even more should be done. Smart, ‘two-way’ meters in every home allow effective demand management, while competitive rates of payment to all licensed grid service providers can drive competition and innovation, which benefits consumers.

Greater support for distributed generation will power economic growth – producing more jobs per dollar invested than traditional power plants. And deployment of local renewables can be accomplished at remarkable speed enabling a transition to a zero-carbon electricity system in as little as two decades, according to our studies.

Nationally, our electricity system is outdated – and so are the policies that continue to determine its development. Although it’s not easy to change century-old paradigms and infrastructure, New York is embracing this challenge head on. Hurricane Sandy was a devastating storm, but it is spurring a shift towards a cleaner, cheaper, and more reliable power. Hopefully, these winds of change reach well beyond New York’s borders.

This article also ran on Greentech Media and National Geographic.

Don’t let California Backslide to More Dirty Energy

San Diego Gas & Electric (SDG&E), one of California’s largest utilities, plans to replace a shuttered nuclear plant with massive amounts of new gas power – all through an insider deal that doesn’t allow clean energy options to compete. This rush for more fossil power would come at a major cost to energy customers, public health and our climate. Help us urge state regulators to reject this reckless plan and send a clear message to all the utilities that California is committed to clean energy.

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SDG&E’s proposal is just another example of the utility supporting its own interests rather than those of the families and businesses it serves. We can meet California’s new energy needs reliably and affordably with clean energy – yet SDG&E is pushing a proposal for a huge amount of unnecessary, expensive and polluting fossil power.

In addition to costing energy customers billions of dollars, this natural gas bonanza carries a big price tag for our climate. The California Air Resources Board has already reported an increase in climate pollution from natural gas generation in the wake of the nuclear plant’s closure. Permanently increasing our dependence on fossil power would put California even father behind on our carbon reduction and clean energy targets. That’s a loss on climate progress that we simply can’t afford.

We pride ourselves in giving members like you ways to say YES to solar rather than NO to dirty energy – but we feel strongly that SDG&E’s costly natural gas plan is worth a resounding no. There is no reason to increase our reliance on the fossil fuels of the past when plentiful, affordable clean energy options are ready to meet that need.

Sign the petition to stop this dirty energy proposal in its tracks, and send a clear message to all California utilities that energy consumers demand clean affordable energy options.

 

CLEAN L.A. Solar continues to shine

With abundant sunshine and vastly underutilized rooftops, solar energy is a natural fit for Los Angeles. And the CLEAN L.A. Solar program is helping the city seize this opportunity.

Launched in early 2013 by the Los Angeles Department of Water and Power (LADWP), CLEAN L.A. Solar is designed to bring 150 megawatts (MW) of solar energy online by 2016 – enough to power more than 21,000 homes. By offering a must-take, fixed-rate, 20-year contract, this program enables businesses and commercial property-owners to generate energy from rooftop solar panels and sell power to the utility. Currently, this CLEAN Program is the largest among any municipal utility nationwide.

Through CLEAN L.A. Solar, LADWP sought to “achieve the target level of solar energy, catalyze the solar industry and create jobs, and streamline the process to increase efficiency.”As LADWP’s Board prepares to vote on opening the 4th tranche, let’s take a detailed look at the program’s performance to date.

Achieve the target level of solar energy

CLEAN L.A. Solar was designed to help LADWP meet the statewide RPS goal of 33% by 2020, as well as Senate Bills 32 and 1332 that require the utility to provide a standard offer program for roughly 75 MW of capacity. 

On this front, the program is performing well. Within its first week, LADWP received applications totaling 107 MW – highlighting significant market demand to build distributed solar projects in Southern California. Each successive tranche has continued to be highly attractive to the market. The most recent 20 MW tranche, which was unanimously approved by the DWP Board in February, received 45 project applications totaling 43 MW.

With 99 MW of projects reviewed and 50 MW of projects active, CLEAN L.A. Solar will undoubtedly ensure that LADWP meets its mandated renewable energy goals.

Catalyze the solar industry and create jobs

Local power keeps energy dollars close to home, which strengthens the local economy through private investment and job creation.

A study by UCLA’s Luskin Center for Innovation found that CLEAN L.A. Solar would create over 2,000 jobs and drive more than $300 million of investment into the City from solar businesses and other companies related to the program. Through the first 40 MW, the program has created of 862 job and is on pace to met projected impacts.

And despite the conception that solar panels are only for the affluent, the benefits of CLEAN L.A. Solar are reaching Angelenos of all means. More than half of the projects are sited in areas with the highest solar potential and the highest economic need, according to the Los Angeles Business Council. The rise of distributed generation – from rooftop solar PV or otherwise – empowers communities to reap the benefits of clean local energy.

“What excites us about this program is the new opportunity it brings to address long standing issues in the communities of L.A. with high economic need. We will see job creation, small and medium-sized business development, and cleaner air to breathe,” said Bill Gallegos of Communities for a Better Environment. 

Streamline the process to increase efficiency

CLEAN L.A. Solar was designed to drive efficiency in the solar market by reducing the amount paid for solar energy over time. Through a “declining price tier system”, projects in the first tranche were offered $0.17/kWh, and the price offered drops in each subsequent tranche.

As the offered price has dropped, interest in the program has remained – signaling that the program is successfully driving towards a more efficient solar market.

Through a similar CLEAN Program, the Germans have streamlined the process of bringing clean local energy online and made their solar market decidedly more efficient than the United States’. Current rooftop solar installations in the U.S. are 2.5 times more expensive than in Germany, despite the fact that system equipment costs are largely comparable. The Germans have realized cost reductions for overhead, customer acquisition, and permitting through their CLEAN Program. As expected, CLEAN L.A. Solar is delivering these cost reductions as the local industry gains greater experience developing projects in a predictable market, which also improves supply chain and labor efficiencies.

California, with its superior solar resource and applicable tax incentives, has the potential to bring rooftop solar online even cheaper than in Germany. Replicating Germany’s market scale and efficiency can yield rooftop solar power between 5¢ and 7¢/kWh in California. Add in the cost of permitting, interconnection, and any applicable grid upgrades paid by facility owners, and the total cost of delivered energy to Californians comes out to 7-9¢/kWh. For more informative on how CLEAN L.A. Solar is leading the effort to drive solar market efficiency and cost reductions, please see the recent Clean Coalition memo on this topic.

A near-term expansion

Stars are aligning for a 4-fold expansion of CLEAN L.A. Solar.

During his campaign, L.A. Mayor Eric Garcetti pledged to increase the program from 150 MW to 600 MW. Now, City council members — as well as a broad coalition of business, civic, academic and environmental groups – are rallying support for this expansion. Last week, City Council President Herb Wesson announced his support for the expanded 600 MW program. This comes on top of ten Neighborhood Councils, which have passed motions to expand the program.

According to independent studies by UCLA and the Clean Coalition, expanding CLEAN L.A. Solar to this size would bring the city over 18,000 new job opportunities and up to $2 billion in private investment.

So the question becomes not how or why, but when?