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The Challenge of Distributed Energy Resources

The Challenge of Distributed Energy Resources

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The Challenge of Distributed Energy Resources

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  1. The Challenge of Distributed Energy Resources A. David Stippler Utility Consumer Counselor 7th Annual Spring Forum Richard G. Lugar Center for Renewable Energy Indianapolis, Indiana May 6, 2014

  2. Utility Consumer Counselor • Under Indiana Code 8-1-1.1-3, the Utility Consumer Counselor (UCC): • Serves at the will and pleasure of the Governor (4 year term) • Shall be a practicing attorney, and qualified by knowledge and experience to practice in regulatory proceedings

  3. Consumer Counselor Powers and Duties • Indiana Code 8-1-1.1-5.1 • “(e) In all proceedings before the commission,…and in a court in which the consumer counselor shall appear, the consumer counselor shall have charge of the interests of the ratepayers and consumers of the utility…”

  4. OUCC • The Office of Utility Consumer Counselor (OUCC) has a current staff of 52 utility professionals • 10-person legal team-over 190 years of combined experience in utility law • Technical staff of accountants, economists, engineers and environmental/fiscal analysts-nearly 850 years of professional and utility industry experience.

  5. What are “Distributed Energy Resources (DER)?” • DER include distributed generation, which are non-centralized sources of electricity generation, typically interconnected to a utility’s distribution system and located at or near customers’ homes or businesses.

  6. What is “Distributed Generation?” • Distributed generation refers to energy sources located behind a retail meter or connected to a microgrid where the intent is to remove some load or demand from the generation, transmission, and distribution facilities that comprise the incumbent utility’s “grid.”

  7. Examples of DER • Solar panels • Energy storage devices • Fuel cells • Micro turbines • Reciprocating engines • Small wind • Backup generation • Combined heat and power (CHP) systems • Hydro • Biomass • Landfill methane

  8. What Precisely is a “Microgrid?” • A “microgrid” is a small self-contained electricity network that sometimes includes a district energy system. The microgrid coordinates and distributes energy from one or more generation resources to multiple users in a spatially defined area.

  9. Another Definition of a Microgrid A microgrid is a group of interconnected loads and distributed energy resources within clearly defined boundaries that acts as a single controllable entity with respect to the grid and that connects and disconnects from such grid to enable it to operate in both grid-connected or “island” mode.

  10. Compelling Reasons for Promoting DER, Especially Renewables • 2014 Report-U.N. Intergovernmental Panel on Climate Change (IPCC) • Expected EPA proposed carbon pollution standards for existing power plants by June 1, 2014 • State Utility Forecasting Group (SUFG) 2013 report to IURC: projected 32% increase in Indiana electric rates by 2023 (reliance on coal for power generation and increasing federal environmental mandates) • U.S. Supreme Court’s reinstatement of the Cross-State Air Pollution Rule-CSAPR- April 29, 2014.

  11. Electric ServiceTerritories Source: Indiana Energy Association 2012 Edition

  12. Indiana Utility Activity-Net Metering

  13. Indiana Utility Activity-Feed-In Tariffs • A feed-in tariff reimburses entities that produce excess electricity and sell it back to the utility at certain rates per kWh instead of receiving credits as is the case with net metering.

  14. Feed-In Tariffs • In a recent filing with the IURC, NIPSCO presented its 3rd annual feed-in tariff report, depicting total metered generation that had interconnected and begun selling energy to NIPSCO to be 73,898,289 kWh from various renewable resources: Source: NIPSCO 3rd Annual FIT Report (Cause No. 43922) pg. 7

  15. Feed-In Tariffs 1200 kW Biomass Source: NIPSCO 3rd Annual FIT Report (Cause No. 43922) pg. 36

  16. Feed-In Tariffs Small Wind Turbine Source: NIPSCO 3rd Annual FIT Report (Cause No. 43922) pg. 36

  17. Promise of Renewables Source: 2013 IURC Annual Report to the Regulatory Flexibility Committee

  18. Some “Pros” to Renewable Energy Resources • Provide a diversity of power supply resources • Promote environmental benefits and stewardship – pollutant free • Reduce power system emissions • Defer or eliminate need for capacity upgrades for generation, transmission and/or distribution systems – economic attributes • Improve power system resiliency (robustness) – support distribution system during outages; sustain building services (“keeps the lights on”)

  19. Some “Cons” to Renewable Energy Resources • Wind/Solar power: weather driven and intermittent (variable output) • Difficulty to produce the energy quantity equivalent to that produced by non-renewable fuels – capability to perform when called upon • Technology required to trap renewable energy is costly (energy storage) • Questions arise as to cost effectiveness • Alterations to landscape – use of technologies to harness resources not “natural” to landscape

  20. Better Energy Storage Technologies Source: “Energy 2020 - A Vision For America's Energy Future” – U.S. Senator Lisa Murkowski 113th Congress

  21. Significance of Microgrids

  22. Economic Aspects of DER Source: Electric Power Research Institute (EPRI), Inc. - The Integrated Grid: Realizing the Full Value of Central and Distributed Energy Resources

  23. The Economics of DER Source: Electric Power Research Institute (EPRI), Inc. - The Integrated Grid: Realizing the Full Value of Central and Distributed Energy Resources

  24. The Economics of DER • Germany’s deployment of solar and wind – a cautionary tale: • Energiewende (“Energy Transformation”) – German Renewable Energy Act of 2000 • Distributed PV was deployed with little time for effective integration • Resources located without attention to grid design and power flow limitations • Dramatic effect on electricity prices

  25. The Economics of DER • U.S. Homeowners do care about clean energy, but economics rule. • 2014 Poll Results – national survey commissioned by Solar City and Clean Edge [Zogby Analytics Polling Firm] • Homeowners want energy options • Support for renewables are widespread • Homeowners weigh environmental impact on their car, home and other major purchases • BUT, Economics rule!

  26. The Economics of DER Source: Electric Power Research Institute (EPRI), Inc. - The Integrated Grid: Realizing the Full Value of Central and Distributed Energy Resources pg. 16

  27. Contact Information David Stippler Utility Consumer Counselor www.in.gov/oucc Phone: 317.232.2494 Direct: 317.233.3232 Toll Free: 1.888.441.2494