Leading by Doing
How utilities and communities are driving transformation through real-world, agile solutions
Energy transformation—as we embark on a shift from a unidirectional utility grid to a dynamic, decentralized energy system—is the focal point of much debate and speculation. Broad trends and ‘aerial views’ of industry change can help us understand the seemingly endless range of possibilities. However, it is TRC’s experience looking back over 50 years working with energy providers, that real change happens on the ground, project by project and decision by decision. And for most, transformation is a journey rather than a single destination. Perhaps J.R.R. Tolkien had it right that “not all those who wander are lost.”
We observe that utilities, state and local energy agencies and communities are adapting by doing—finding their way by working with regulators through an iterative approach to address climate change and rapid technology advancement. Today, the emphasis is not on defining all the answers up front. Instead, coalitions of diverse stakeholders are taking action through discrete, digestible steps that are tested in the real world. If an initiative isn’t working as expected, frameworks can be adapted to quickly get back on track—or even change course.
Since the inception of New York’s comprehensive and ambitious Reforming the Energy Vision effort a few years ago, the state has been working aggressively towards a cleaner and more affordable energy system for all New Yorkers. As the next step in this statewide transitional effort, New York is implementing a groundbreaking energy efficiency initiative coupled with new 2025 efficiency targets. This far-reaching effort puts the state on a path to being entirely carbon neutral and establishes New York as a leader in the fight on climate change. This new initiative is the most aggressive energy efficiency strategy in New York’s history and will dramatically accelerate energy efficiency, reduce greenhouse gas emissions, decrease consumer energy costs, and create job opportunities.
Large-scale utility infrastructure investments are being exchanged for nimble non-wired alternatives and distributed energy systems. And just as the grid is now multi-directional, so too are policy and utility business model frameworks adapting for flexibility. More than ever before, utilities and industry stakeholders are working together for progressive policy change, informed by a continual feedback loop of field experiences.
Role of utilities and institutions
Far from the “death spiral” concerns of five years ago, utilities are a stabilizing force—with much-needed vetting and structure for the industry’s dynamic transformation. Utilities have their fair share of challenges: lack of financial incentives, siloed resources and internal resistance to change, to name a few. However, utilities as well as regulators, government energy agencies, and community choice energy providers are in a unique position to drive and implement our collective energy vision—given their scale, history and changing business models. Because at the end of the day, these institutions are on the hook to deliver our efficient, reliable and clean energy resources.
Central Hudson Gas & Electric is one utility enhancing their grid reliability through an innovative non-wired alternative microgrid. TRC designed a 2 MW battery storage and 2 MW natural gas generation solution to support a distribution network serving 300 properties in East Fishkill, NY that is prone to outages. It will enhance reliability during typical conditions and protect against outage system disruptions in the event of severe weather.
Agencies and community choice energy providers are implementing our advanced energy future as well. Sonoma Clean Power was recognized with a Bay Area Metro Award for their Advanced Energy Rebuild program, which is helping homeowners build high-efficiency homes to replace those lost in 2017 California wildfires. The program co-sponsored by Pacific Gas & Electric and managed by TRC promotes low-carbon pathways, including all-electric design, solar PV and electric vehicle options.
From-the-field efforts like these are painting the picture only seen from an aerial view. By examining work happening on the ground, we can learn to apply solutions more broadly as we traverse the energy frontier.
A new energy frontier: integrated, flexible resources
Energy stakeholders are seeking a flexible, optimized grid—made possible in large part through distribution-level management of integrated energy efficiency, demand response and distributed generation resources. Utilities want to provide reliable energy where and when we need it, while maintaining strong operations and profitability. At the same time, the realities of climate change are driving us toward clean, low-carbon solutions.
The backbone of our advanced energy frontier is still developing—from utility business decisions like cost-of-service and DER ownership vs. operation to integrated resource and distribution planning, dynamic rates and tariffs, cost-effectiveness and valuation and participation in energy and capacity markets, among others. Yet utilities and other stakeholders continue forward, actively pursuing integrated, flexible grid resources.
Demand management and distributed generation/storage are well suited to support these challenging goals. The California Energy Commission is funding an Advanced Energy Community—a first-of-its-kind virtual power plant (VPP) integrating energy efficiency, solar PV, energy storage and other distributed energy resources deployed across the City of Lancaster, CA in stand-alone and microgrid applications. Insights and benefits from the TRC-supported project include load balancing to mitigate reliability issues, reducing transmission and distribution infrastructure costs, demonstrating new technologies, and enabling communities to more easily participate in grid services markets. Lancaster is also located on the San Andreas fault and the VPP will provide critical resiliency and safety benefits in the event of an emergency.
Energy efficiency is also presenting strong value as a grid resource. Benefits are being delivered today through Pacific Gas & Electric’s decade-long California Advanced Home Program (CAHP), managed by TRC. Thousands of high-efficiency homes, designed and built as a result of the program, have shifted the regional Central Valley load curve, helping relieve steep demand ramps the utility was otherwise facing. This effort demonstrates how passive efficiency design, rather than active measures like controls, can deliver major grid benefits at a lower cost.
We expect to see this efficiency resource potential grow. Utilities across the US are requesting efficiency as an integrated part of their resiliency-focused distributed energy solutions. And in California, there is already buzz about how recent changes to the Efficiency Three-Prong Test supporting strategic electrification will result in a shift from annual savings to more time-of-use and carbon savings.
Innovative partnerships to achieve progress
In many cases, utilities are implementing transformative solutions. But as the industry diversifies, other parties are driving change too. In fact, parties like local governments have flatter hierarchies and accountability to communities (rather than shareholders) which enable them to make big energy transformation moves quickly, leading by example. We are working with a dozen local governments across the US who are implementing local building reach codes and clean, resilient microgrids that benefit their communities.
Entities that have previously never worked together are finding common ground. Utilities, community choice energy providers, state agencies, local governments, higher education organizations, community coalitions and industry parties are collaborating on major projects. Just a few of their shared goals include greater grid reliability, resiliency around natural disasters, net zero energy and strategic electrification for decarbonization.
As just one example, the Town of Huntington, New York is developing an islandable microgrid that will provide continuous power access to critical community facilities like the town hall, local hospital, senior center and water treatment plant. The project feasibility study and engineering design led by TRC was funded by NYSERDA’s 2017 NY Prize resiliency initiative launched in the wake of Superstorm Sandy. The New York Power Authority, PSEG-Long Island and key stakeholders from the community have also come together to help actualize the project.
Local solutions for a national trajectory
Energy policies and economic opportunities vary state by state, which is reflected in the diversity of regional advanced energy solutions. Certain states—California, New York, Massachusetts and others—have goals that are pushing the industry faster and deeper than anywhere in the US. And while these environments may appear a world apart, there is significant value in borrowing lessons learned.
Achievements and challenges from regions making big investments can be a huge advantage to others setting and executing their own plan for a clean energy future. Under New York’s REV initiative, NYSERDA and New York’s investor-owned utilities will work together to achieve an annual reduction of 3% in electricity sales by 2025—including a major heat pump technology deployment effort to drive carbon reduction as well as other energy efficiency and clean energy programs. Other states are looking to leading examples like New York to inform their regulatory and political decisions—and we expect to see many more robust energy efficiency, clean energy and decarbonization initiatives across the country in the near future.
Achieving our goal for integrated, flexible resources will take an industry-wide effort. TRC is serious about implementing grounded solutions—and sharing lessons learned for others to benefit. We look forward to featuring more real-world examples of utilities, agencies and communities bringing our advanced energy future to life. Tune into TRC dispatches from the field for more insights!