Overview and Latest Topics Related to Energy Systems in the U.S.

James Reilly, Principal ConsultantReilly Associates

SMART COMMUNITY SUMMIT

Tokyo

June 8, 2017

Power and Energy Trends

Issues and Solutions

Standards

Research + Development

THEMES

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POWER AND ENERGY TRENDS

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0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

19

90

20

16

20

40

19

90

20

16

20

40

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90

20

16

20

40

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90

20

16

20

40

Electricity use by sector (billion kilowatt hours)

direct use

electricity sales

residential I commercial I Industrial I transportation -2

-1

0

1

2

3

4

5

6

1980 2000 2020 2040

Electricity use growth rate percent growth (three-year rolling average)

2016history projections

Source: EIA, Annual Energy Outlook 2017

Electricity use continues to increase, but the rate of growth remains lower than historic averages

ELECTRICITY DEMAND

4

Natural gas resource availability affects prices and plays a critical role in determining the mix of coal, natural gas, and renewable generation

FUEL MIX

5

Lower capital costs and tax credits boost near-term wind and sustain solar additions; coal-fired unit retirements are driven by low natural gas prices.

-30

-20

-10

0

10

20

30

40

2005 2010 2015 2020 2025 2030 2035 2040

2016history projections

solarwindoil and gasnuclearothercoal

additions

retirements

Annual electricity generating capacity additions and retirements (gigawatts)

Source: EIA, Annual Energy Outlook 2017

GENERATION FLEET

6

Natural gas production is driven by continued development of shale gas and tight oil plays

Source: EIA, Annual Energy Outlook 2017

NATURAL GAS PRODUCTION

7

Nuclear electricity generating capacity(gigawatts)

2016history projections

Reference

-4

-3

-2

-1

0

1

2

3

2015 2020 2025 2030 2035 2040

Year-over-year nuclear capacity changes (gigawatts)

additions

retirements

assumed upratesnew reactors

actual/announcedretirementsprojectedretirements

Reference

Source: EIA, Annual Energy Outlook 2017

Assumptions about license renewals in 2017 increase nuclear retirements, lead to net nuclear capacity decreases

NUCLEAR POWER

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ISSUES AND SOLUTIONS

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GENERATION MIX DRIVER TIMELINE

10

1994 – Energy Policy Act – Production Tax Credit (PTC)

2009 – American Recovery and Reinvestment Act (ARRA)

2013 – Hydraulic Fracturing on a commercial scale

Electricity Production Subsidies and Support

Beneficiary Support Share

Coal 901 6%

Natural Gas and Petroleum Liquids 690 4%

Nuclear 1,660 10%

Renewables

Biomass 118 1%

Geothermal 245 2%

Hydropower 392 2%

Solar 4,393 27%

Wind 5,936 37%

Other 593 4%

Subtotal - Renewables Electric 11,677 72%

Electricity - Smart Grid and Transmission 1,184 7%

Total 16,112 100%

FEDERAL

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Renewable Portfolio StandardsMandatory purchase of RES by utilities

Net MeteringCompensation at retail rates

Regulatory FrameworkDistribution Utilities

STATES – DISTRIBUTION LEVEL

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WA: 15% x 2020*

OR: 50%x 2040* (large utilities)

CA: 50%

x 2030

MT: 15% x 2015

NV: 25% x

2025* UT: 20% x

2025*†

AZ: 15% x

2025*

ND: 10% x 2015

NM: 20%x 2020

(IOUs)

HI: 100% x 2045

CO: 30% by 2020

(IOUs) *†

OK: 15% x

2015

MN:26.5%

x 2025 (IOUs)31.5% x 2020 (Xcel)

MI: 15% x

2021*†

WI: 10%

2015

MO:15% x

2021

IA: 105 MWIN:

10% x

2025†IL: 25%

x 2026

OH: 12.5%

x 2026

NC: 12.5% x 2021 (IOUs)

VA: 15%

x 2025†KS: 20% x 2020

ME: 40% x 2017

29 States + Washington DC + 3 territories (8 states and 1 territories have renewable portfolio goals)

Renewable portfolio standard

Renewable portfolio goal Includes non-renewable alternative resources* Extra credit for solar or customer-sited renewables

†

U.S. Territories

DC

TX: 5,880 MW x 2015*

SD: 10% x 2015

SC: 2% 2021

NMI: 20% x 2016

PR: 20% x 2035

Guam: 25% x 2035

USVI: 30% x 2025

NH: 24.8 x 2025

VT: 75% x 2032

MA: 15% x 2020(new resources)

6.03% x 2016 (existing resources)

RI: 38.5% x 2035

CT: 27% x 2020

NY:50% x 2030

PA: 18% x 2021†

NJ: 20.38% RE x 2020 + 4.1% solar by 2027

DE: 25% x 2026*

MD: 25% x 2020

DC: 50% x 2032

RENEWABLE PORTFOLIO STANDARDS

Source: DSIRE, February 2017

State-developed mandatory rules for certain utilities (39 states + DC+ 3 territories)

No statewide mandatory rules, but some utilities allow net metering (2 states)

Source: DSIRE, April 2017

KEYU.S. Territories

39 States + Washington DC + 4 territories

DC

Statewide distributed generation compensation rules other than net metering (6 states + 1 territory)GU

AS PR

VI

NET METERING

REFORMING THE ENERGY VISION – New York

Source: New York Public Service Commission15

▪ Avoided D – avoided demand,includes demand reduction value (DRV) & locational system relief value (LSRV)

▪ E – environmental benefit, rate fixed at time of interconnections

▪ Capacity (ICAP) – mirrors capacity currently provided under NEM, changes over time

▪ Energy (LBMP) – current wholesale energy price, changes hourly

▪ MTC – market transition credit for mass market portion of Community Distributed Generation (CDG) projects

Base Retail Rate (NEM)

Value StackValue Stack + MTC

Ce

nts

/kW

h (

illu

stra

tive

)

VALUE OF DISTRIBUTED ENERGY RESOURCES

Volumetric vs Monetary Metering

Volumetric metering tracks net kWh delivered to grid▪ NEM – production exported to grid; credited on the customer’s utility bill with a kWh reduction on a 1:1 ratio

Monetary metering converts energy production into dollars▪ customers see a dollar credit on their energy bill (rather than a kWh credit)▪ Solar energy consumed onsite is not delivered to the grid and is not converted to a monetary credit

For both metering methods, PV kWh consumed on-site is a kWh not purchased from the utility. 16

BROOKLYN QUEENS DEMAND MANAGEMENT PROGRAM (BQDM)

Investment deferral for 52 MW supply shortfall at two substations, feeders and switching stations - $1.2 billion

Alternative solution:▪ Customer-side

▪ energy efficiency + demand response - $150 million

▪ Utility-side ▪ solar, fuel cells, storage - $50

millionService Territory – 310,000 customers

Source: Consolidated Edison

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CALIFORNIA

Renewable Portfolio Standard

50% by 2030

Distribution Resource Planning

Policies, procedures, and rules to guide California investor-owned electric utilities (IOUs) in developing their Distribution Resources Plan. Evaluate IOUs existing and future electric distribution infrastructure and planning procedures to incorporate Distributed Energy Resources (DERs) into the planning and operations of their electric distribution systems.

Microgrids: Demonstration project where the utility serves as a distribution system operator of a microgrid

Storage Mandate

1.325 GW by 2020

Community Choice Aggregation

Local government agencies that purchase and may develop power on behalf of residents, businesses, and municipal facilities within a local or sub-regional area. Local control over power mix and rates.

18Source: CPUC

WHOLESALE MARKETS – NEGATIVE PRICES

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STANDARDS

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IEEE P1547-REV STANDARD FOR INTERCONNECTION

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Source: P1547™/D6.7.2 1 Draft Standard for Interconnection and Interoperability of Distributed Energy Resources with Associated Electric Power Systems Interfaces

DER Fault Response to Abnormal Frequencies and Frequency Ride-through Requirements

IEEE P2030.7 STANDARD FOR THE SPECIFICATION OF MICROGRID CONTROLLERS

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Grid Substation

Transformer

Breaker

Dispatchable Generation

Sensitive and critical loads

CHP

Battery storage

Controllable loads

Load

Microgrid controlsystem

Non-dispatchable generation

Load

Solar Wind

Microgrid

Centralized electrical storage

Storage

Load

▪ Dispatch function – optimizes the use of DER assets, ensures operation of the microgrid meets requirements for internal operation and as seen from the point of interconnection to the distribution system; dispatch orders: steady state conditions and transitions.

▪ Transition function – manages transitions: planned and unplanned islanding; reconnection/resynchronization (with black start as required).

Cyber Security – overarching priority

▪ R&D programs across agencies and departments – DHS, FBI, DOD, DOE, NIST

▪ Framework for Improving Critical Infrastructure Cybersecurity, NIST (update January 2017)

Critical Infrastructure Protection Standards – NERCFERC approved updates, 2015 (effective date for implementation - April 1, 2016)

▪ CIP-003-6 (Security Management Controls)

▪ CIP-004-6 (Personnel and Training),

▪ CIP-006-6 (Physical Security of BES Cyber Systems)

▪ CIP-007-6 (Systems Security Management)

▪ CIP-009-6 (Recovery Plans for BES Cyber Systems)

▪ CIP-010-2 (Configuration Change Management and Vulnerability Assessments)

▪ CIP-011-2 (Information Protection)

GridEx – national cyber exercise planned by NERC

▪ Operational aspects, rather than IT applications for cybersecurity

▪ Bi-annual – GridEx IV, November 2017

▪ Participants: ISOs, Utilities, Federal, State and Local agencies– 3,500 individuals

CYBER SECURITY

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RESEARCH AND DEVELOPMENT

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Electricity Delivery and Energy Reliability (OE)

FY2017 $208 million

FY2018 $123 million

Energy Efficiency and Renewable Energy (EERE)

FY2017 $2,473 million

FY2018 $1,275 million

Advanced Research Projects Agency – Energy (ARPA-E)

FY 2017 $285 million

FY 2018 $173 million

DEPARTMENT OF ENERGY – FY18 BUDGET

40% reduction

48% reduction

25

39% reduction

DOE "Smart Grid" Program

▪ ARRA (2009 - 2014)$3.5 billion

▪ Smart Grid (FY2018) $10 million

Grid Modernization Initiative (2015 to 2018)

▪ 88 R&D projects

▪ 14 national laboratories

▪ $220 million to GMLC (over three years)

GRID MODERNIZATION

Grid Modernization Lab Consortium (GMLC)

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CORE ACTIVITIESProject 6: Grid Sensing and Measurement Strategy

PIONEER REGIONAL PARTNERSHIPSProject 15: Grid Frequency Support from Distributed Inverter-Based Resources in Hawaii

CROSSCUTTING ACTIVITIESProject 19: Advanced Sensor Development

PROGRAM SPECIFIC SELECTIONSBUILDING TECHNOLOGIES OFFICEProject 1: Virtual Batteries

FUEL CELLS TECHNOLOGIES OFFICEProject 2: Integrated Systems Modeling of the Interactions between Stationary Hydrogen, Vehicle, and Grid Resources

SOLAR ENERGY TECHNOLOGIES OFFICEProject 12: CyDER: A Cyber Physical Co-simulation Platform for Distributed Energy Resources in Smart Grids

VEHICLE TECHNOLOGIES OFFICEProject 3: Modeling and Control Software to Support V2G Integration

WIND AND WATER POWER TECHNOLOGIES OFFICEProject 4: Providing Ramping Service with Wind to Enhance Power System Operational Flexibility

ADVANCED GRID MODELINGProject 4: Protection and Dynamic Modeling, Simulation, Analysis, and Visualization of Cascading Failures

ADVANCED DISTRIBUTION MANAGEMENT SYSTEMSProject 3: Advanced Distribution Management System Testbed Development

ENERGY SYSTEMS RISK AND PREDICTIVE CAPABILITIESProject 1: Improved Forecasts of Electric Outages from Tropical Cyclones

ENERGY STORAGEProject 2: Collaborative Demo for Secondary Use and Use Case Validation

SMART GRIDProject 2: A Closed-Loop Distribution System Restoration Tool for Natural Disaster Recovery

TRANSMISSION RELIABILITYProject 3: HVDC and Load Modulation for Improved Dynamic Response Using Phasor Measurements

TRANSFORMER RESILIENCE AND ADVANCED COMPONENTSProject 3: High Voltage Testing and Modeling of Transformer, Line Interface Devices, and System Components Under Electromagnetic Pulse, Geomagnetic Disturbance, and Other Abnormal Transients

CYBERSECURITY FOR ENERGY DELIVERY SYSTEMSProject 2: Cybersecurity for Renewables, Distributed Energy Resources, and Smart Inverters

GRID MODERNIZATION PROJECTS – GMLC

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LOCATIONAL VALUE OF DISTRIBUTED ENERGY RESOURCES

Integration of Distribution System Power Flow Optimization, (Advanced) DER Asset Economic Optimization, Economic and Security Constrained DER Buildouts and Load Projections, Transmission System Power Flow and Optimization, Dispatch / Merit Order Modeling with distribution factors / locational performance assessed across systems.

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DER Siting and Optimization Tool

Integrated Model Development Project

MICROGRID R&D PROGRAM TIMELINE

The microgrid is a concept for which the controller is the defining and enabling technology. Indeed, the microgrid may be defined as the resources – generation, storage, and loads – within a boundary that are managed by the controller.

The microgrid controller manages the resources within the microgrid’s boundaries, at the point of interconnection with the utility and in interaction with the utility during normal operations, sometimes called “cooperative control”. It is at this level that the microgrid controller achieves its full potential for optimizing the value of distributed energy resources for the grid operations and customers, both those served by the microgrid directly and the utility overall. The microgrid controller is what defines the microgrid’s operational relationship with the distribution utility.

Evolution of microgrids and controllers

Functionality and standards

Demonstration projects for deployment of DER and microgrids

FOA 997 Metrics

+ TestingUse Cases

2013 - 2014 2015 - 20182014 - 2017 2014 - 2017 2017 - 2020

uGrid Controller+ DMS

Simulations

IEEE Standards

Workshops

2011 - 2012

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ADVANCED DISTRIBUTION MANAGEMENT SYSTEMS

30

INTEGRATED CONTROLS AND OPERATIONS

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