Overheard at the TREIA GridNEXT Conference
GEORGETOWN, Texas — Almost 150 national and regional renewable energy industry representatives gathered here for the Texas Renewable Energy Industries Alliance’s GridNEXT conference. ERCOT CEO Bill Magness and NYISO CEO Brad Jones both delivered presentations, and panel discussions focused on distributed generation, storage technologies, renewable power and the various challenges facing the ERCOT grid.
Future Prices in the Texas Market
Magness opened the conference with a SWOT analysis of ERCOT. In listing the strengths, weaknesses, opportunities and threats facing the ISO, Magness’ focus became apparent: the ability to keep track of distributed energy resources (DERs) and their integration.
He noted ERCOT has about 900 MW of distributed generation connected in its retail-choice areas and “roughly” another 200 MW in the market’s noncompetitive areas.
“That’s not a huge penetration at this point. These resources don’t raise a long-term reliability issue and we’re not waving a red flag, but we expect to see more,” Magness said. “We need to come up with a process to map those DERs. It’s the distribution service provider’s job to model the system, but we want to map those things into things we’re responsible for.”
Magness said ERCOT will soon be issuing a white paper on DERs and asked for stakeholders’ help with improving the resources’ visibility. “We want to work with you on that. We’ve got to get an answer, because it’s holding up the usefulness of the ERCOT system.”
He likened the ISO to an Austin-area moving company. “Their motto is, ‘If we can get it loose, we can move it,’” Magness said. “If we can see it, we can integrate it.”
NYISO CEO Explains 50-by-30
Magness’ counterpart at NYISO, the Texas-native Jones, delivered the conference’s keynote address. Jones detailed the ISO’s plan to meet New York’s “50-by-30” goal: 50% renewable energy use by 2030. To meet that goal, NYISO would have to add either 25,000 MW of solar, 15,000 MW of wind or 4,000 MW of hydro by 2030; it currently has 1,700 MW of wind and 3,000 MW of hydro.
“It’s a significant overall goal, but this is the goal, economy-wide,” Jones said. “It includes transportation, it includes home heating, it includes all those elements. Electric generation would have to decrease production by 60% to account for increases in transportation.”
He said New York’s recent actions to protect the region’s aging nuclear plants will help the transition to a lower-carbon fuel mix. “The state has been very firm: We need to maintain nuclear generation,” Jones said.
The state “had a real concern it would lose these real low-carbon facilities, and that it would make it almost impossible to achieve this 50-by-30 goal. [The nuclear facilities] did it by making a side arrangement with the government. Utilities will charge the customers for it to provide enough financial support to keep them in N.Y. If we’re going to be a low-carbon [grid operator], we have to make sure we’re paying for the attributes we want, whether that’s fast-ramping capacity or baseload gen or low carbon or renewable facilities.”
Renewable Energy Credits: All About the Money?
Addressing the issue of corporate procurement of renewable energy, Jessica Adkins, a partner with the Bracewell law firm, said there are differences among major corporations seeking renewable energy credits (RECs). “If your goal is to say you’re buying green energy, that’s easy for people to do,” she said.
“If all your goal is to claim you’re buying renewables, you can offset usage with RECs. Where Amazon is going is additionality. They want do to more than go green. They want to tell their customers they’re putting renewables on the grid.”
“In our business and outside our business, I’m seeing a further diversification of companies doing these kind of deals,” said Adkins’ fellow panelist, Hans Royal, associate vice president of strategic renewables for Renewable Choice. “They don’t really have an environmental goal, but they see the fixed price of energy. Education is the No. 1 hurdle to why we’re not seeing a faster adoption. It’s coming … industry organizations are actively sharing information and trying to create a community in the purchase-power space. Getting information out to those companies is key.”
Texas Energy Aggregation’s T.J. Ermoian said the issue is the color of money, no matter where customers are. “If they see the government investing in [renewables], they’ll be more comfortable,” he said
“Being in Texas, we’re energy-rich. I tell people I’m in the middle [of the state] between George Bush’s ranch and Ted Nugent. We’re in the reddest of red states,” Ermoian said. “I start talking about climate change in Texas, and the eyes start to glaze over. Money is the greenest thing people understand. If we can give them a compelling economic vision and quantify what they’ve been paying and say, ‘Here’s what you could be paying.’ … Well, most people are pretty good at math.”
Energy Storage a Positive ‘Disruptive Technology’
Referring to energy storage as a “disruptive technology,” Narrow Gate Energy President Darrell Hayslip was one of several panelists who predicted a brighter future for the technology.
“We’re all trying to figure out where will storage go. Where will it play?” he said. “We’ve done a lot to prove out this technology. The trick now is how are we going to apply it in the system. These are disruptive technologies that require some changes.
“It’s something new we’ve never had before. Cars wouldn’t do any good without highways, cell phones without infrastructure. We’ve got to see infrastructure catch up. The builders don’t make that investment unless they see benefits come out.”
Fractal Business Analytics CEO Judy McElroy said she is finding “compelling reasons” for solar and storage in ERCOT. She predicted one of the largest municipal utilities in Texas — thought to be San Antonio’s CPS Energy, with nine solar farms already generating 230 MW of energy — would be issuing a request for proposals within a week for energy storage solutions.
“We’re seeing in ERCOT the evolution a utility goes through. They’ll do solar first, then storage,” McElroy said. “You have to take into account that from a utility’s perspective, things take a lot of time. It’s sometimes more complex than it needs to be.”
