A common mantra is to build big — install large wind and solar farms — to quickly decarbonize electricity. But this chant is inevitably followed by a lament that building utility-scale energy projects in the United States is hard.
The obstructions are many, and there are no quick fixes. A multi-year wait exists for grid interconnection. Large pieces of land are not always readily available. Nimbyism prevails. It can take years or even a decade or more to win approval to build transmission lines connecting distant renewable projects to population centers. And it can be tough to negotiate who pays for what.
So is there another way?
A group of clean energy organizations in California has put an intriguing proposal on the table. Why not start with smaller, distributed energy resources (DERs) on the many available rooftops? More easily built, these projects can take a bite out of the state’s clean energy requirements. Once the state figures out how much it can achieve with distributed generation, it plans harder-to-build big projects for the rest.
Max DG Pathway
Called the “Max Distributed Generation (DG) Pathway,” the idea is under discussion before the California Energy Commission as it looks at ways to accelerate the state’s progress toward fulfilling California law (SB 100) that requires all electricity come from renewable and zero-carbon resources by 2045 (23-SB-100).
It’s “bottom-up planning,” said Lorenzo Kristov, a consultant for The Climate Center, which proposed the Max DG Pathway to the commission along with the Center for Biological Diversity, Local Government Sustainable Energy Coalition, 350 Bay Area, Local Clean Energy Alliance and Vote Solar.
“In the old world where you only had big utility-scale generators, and everything was on the bulk power system, all the planning was top down. You look at a load forecast and then we have to meet it with bulk system resources,” Kristov said in a recent interview. “I’m saying, well, DER has totally changed the game. Let’s start planning from the bottom up, starting with locating as much supply close to load as we possibly can.”
Maximizing solar and storage installations in the “built environment” — warehouses, shopping malls, schools, parking lots, irrigation canals, and highway rights-of-way — avoids public acrimony that arises when energy projects are proposed on open land. Because it’s local energy — built on rooftops close to where it’s used — distributed generation averts the costs of building transmission and the inefficiencies associated with pushing electricity long distances over wires. At the same time, local communities benefit from having clean energy projects — and the jobs they generate — near at hand.
Front of the meter
The discussion before the commission requires a different kind of thinking for energy planners. Generally, distributed generation is perceived as purely a customer-sited or behind-the-meter resource, where households or businesses install solar for their own use. Front-of-the-meter is a designation usually applied to standalone power plants.
From a practical standpoint, a key difference between a behind-the-meter solar project and a front-of-the-meter project lies in sizing. A behind-the-meter project is generally sized to serve the building’s needs. Front-of-the-meter distributed resources (also called wholesale distributed generation) are sized to meet the grid’s needs.
“A warehouse, if it’s just considering its own needs, is going to put on, let’s say, 40 panels. But if it’s creating a resource to produce energy for the market, it might put on 150 panels,” Kristov said.
In comments filed with the commission November 14, the clean energy groups loosely sketched out how the business model might work under this scenario. The distributed generation would have its own front-of-the-meter utility interconnection and meter. A contract would be arranged between the developer and building owner for use of the rooftop. The developer would earn revenue via a power purchase agreement with the utility or through some other business model. Utilities would procure the rooftop energy to serve their customers much the same way they buy power from a large generator.
As a next step, Kristov hopes to work with the commission staff to refine the plan and replace a capacity-based renewable model staff put forward during an October 31 workshop. In the staff plan, the state would determine how much utility-scale renewable capacity it needs and then pre-determine what subset should be front-of-the-meter distributed generation — an approach likely to lead to far less distributed energy, according to Kristov.
“Eyebrow raising” cost savings
How far can California go in meeting its renewable energy goal by using its rooftops? More analysis is needed, Kristov said, but it’s likely to be substantial. The National Renewable Energy Laboratory a decade ago found that rooftop solar photovoltaics could generate as much as 74% of the electricity sold by California utilities.
California’s 66,000 warehouses, alone “provide perfect locations to deploy large solar arrays,” as do schools, churches, multiunit housing facilities, critical community facilities and government buildings, according to the non-profit Clean Coalition, which also weighed in before the commission last week.
Doing so could save “an eyebrow-raising amount of money,” the Clean Coalition added, citing a Vibrant Clean Energy study that found adding local solar+storage would bring ratepayers $120 billion in cumulative savings from 2018-2050.
Maximizing the energy potential of local buildings also opens the way to distribute energy wealth more fairly, Kristov said.
“When you live in an economy where you build wealth by owning assets, local ownership of these energy assets can be a really beneficial element in a community’s economy. How can we create business models and financing models so that a community-based organization or a nonprofit can actually own a resource that makes money for the community by selling electricity?” he said. “We just need the rules that enable it to happen and to flourish.”
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