POWER May 2016 - 25

DISTRIBUTED ENERGY RESOURCES
More About the
Quadrennial Energy
Review
See http://energy.gov/epsa/quadrennialenergy-review-qer
for more details on many
of the issues mentioned in this article and
1.usa.gov/1pmjxeQ for the 24-page February
4 Briefing Memo regarding the second
installment. All comments regarding
the QER can be uploaded at www.energy.
gov/qer or submitted to QERcomments@
hq.doe.gov until July 1, 2016.
(IEI)-part of the Edison Electric Institute's
(EEI's) Edison Foundation-listed three
trends highlighted in the institute's December
2015 publication, Key Trends Driving
Change in the Electric Power Industry:
■ Transition to a clean energy future
■ A digital and distributed grid
■ Individualized customer services
These and other changes already affecting
the industry have implications for:
■ Existing power generators and wires owners,
as well as those who support them
■ Grid operators
■ New energy and energy service providers
■ Federal, state, and local regulators
■ Large and small electricity customers
Reports from any number of research firms
also tout the rise of renewables, distributed
energy resources (DERs), microgrids, and
new grid and utility operating models. For
example, highlighted in an early 2016 report
by Deloitte, " Trends to Watch in Alternative
Energy, " is this claim: " Alternative energy's
shift to the mainstream is largely complete
and likely irreversible. "
Supporting that view is the U.S. Energy
Information Administration's (EIA's) March
Short-Term Energy Outlook projection that
solar power-for the first time-will lead
utility-scale capacity additions in 2016 with
9.5 GW, followed by gas and wind; in 2015
natural gas was followed by wind and then
solar. The EIA notes that " This level of additions
is substantially higher than the 3.1 GW
of solar added in 2015 and would be more
than the total solar installations for the past
three years combined. "
If you prefer analysis and projections from
the financial sector rather than an independent
government agency, consider Warren
Buffett's 2016 annual letter to investors. After
noting that, traditionally, " utilities were
usually the sole supplier of a needed product
May 2016 | POWER
and were allowed to price at a level that gave
them a prescribed return upon the capital
they employed, " he adds, " The joke in the industry
was that a utility was the only business
that would automatically earn more money
by redecorating the boss's office. And some
CEOs ran things accordingly. "
" That's all changing, " Buffett continues.
" Today, society has decided that federallysubsidized
wind and solar generation is in
our country's long-term interest. Federal
tax credits are used to implement this policy,
support that makes renewables pricecompetitive
in certain geographies. Those
tax credits, or other government-mandated
help for renewables, may eventually erode
the economics of the incumbent utility, particularly
if it is a high-cost operator. [Berkshire
Hathaway Energy's] long-established
emphasis on efficiency-even when the
company didn't need it to attain authorized
earnings-leaves us particularly competitive
in today's market (and, more important,
in tomorrow's as well). "
Sizing Up Solar
In his opening remarks at the QER public
stakeholder meeting, Tom Kimbis, vice president
of executive affairs for the Solar Energy
Industries Association, acknowledged that
" solar is still small " -just 1% of the U.S.
energy mix. He also noted, as EEI's Thomas
Kuhn had before him, that utility-scale solar
represents 60% of installed solar capacity.
Nevertheless, Kimbis observed, the distributed
generation (DG), largely rooftop, portion
gets more coverage and attention.
It's not just the media (especially the
non-power-industry media) that talk about
distributed solar generation more than its
contribution to our electricity system would
seem to merit. Utilities, too, talk a lot about
how just a little bit of DG sometimes requires
them to conduct business and engage in planning
differently. And, for all the criticism that
could be leveled against utilities for being
slow to recognize society's appetite for renewable
energy, they get it now.
The IEI's Wood said they expect " exponential
growth of solar. " By 2020, she
said, solar will provide about 10% of U.S.
generation.
One recent study by the National Renewable
Energy Laboratory (NREL) is among
others suggesting that utility-scale photovoltaics
(PV) plus " grid-friendly " controls
can actually make the variable renewable a
net plus for system stability and reliability.
The lab collaborated with AES, Puerto Rico
Electric Power Authority, First Solar, and the
Electric Reliability Council of Texas on a
demonstration project involving two roughly
20-MW PV power projects, one in Puerto
www.powermag.com
Between the Utility
and the Customer:
Community Resources
POWER wrote about community solar
installations-which offer customers
a way to own solar without putting it
on their rooftops (especially when they
might not own those rooftops)-in the
May 2015 issue. Such installations,
which are smaller than today's utilityscale
solar projects, are often developed
by third parties, but some utilities
are getting into the action as well. In
California, for example, the three big
investor-owned utilities are all offering
community solar programs in response
to state renewables requirements.
February brought an announcement
about another, similar, concept: " community
storage. " Like community solar
installations, community storage might
be owned by a utility, customers, or
a third party. In this particular case,
though, the National Rural Electric Cooperative
Association was announcing
the use by some of its utility members
of aggregated electric hot water heaters
as energy storage devices as part of a
demand response program.
Rico and the other in Texas, to test their ability
to provide ancillary services.
NREL says the demonstration " showed
how active power controls can leverage PV's
value from being simply a variable energy
resource to providing additional ancillary
services that range from spinning reserves,
load following, ramping, frequency response,
variability smoothing and frequency regulation,
to power quality. Specifically, the tests
conducted included variability smoothing
through automatic generation control, frequency
regulation for fast response and droop
response, and power quality. "
Although the effects of distributed PV
generation on a distribution grid vary depending
on the installation size, number of
installations, and where on a feeder they are
positioned, smarter distribution system controls
are beginning to make management of
small generators possible.
What Are DERs and Why Do They
Matter?
Rooftop solar generation may get the most
attention, but distributed energy resources
include much more. Unlike central station
generation, DERs can sit on either side of the
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http://www.energy.gov/epsa/quadrennial http://1.usa.gov/1pmjxeQ http://www.energy http://www.powermag.com
POWER May 2016

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