New York Moves to Update Its Grid

by | Feb 8, 2017

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The New York Independent System Operator (NYISO) has released a five-year timeline for reshaping the state’s grid.

“The Distributed Energy Resources Roadmap,” according to The Times Union, is part of the state’s Reforming the Energy Vision (REV) program. Grids today are one-way affairs in which a massive power source sends power to users. The grid of the future still will feature that huge power source. But they also will make incorporate decentralized solar and wind power and storage capabilities. Power, in this new vision, can move upstream and to where it is needed.

The goal, in essence, is to deepen the enfranchisement of renewables by enabling smaller and more diverse municipal, business and even residential customers participate:

The NYSIO has been adapting for years to incorporating wind farms and large solar farms onto the grid. However, under REV, thousands of smaller systems would be connected all over the grid that will need to be priced into the wholesale market, which traditionally is dominated by large power plants.

The story says that a transformed grid needs transformed financial structures. Currently, residential users selling their power to the grid are paid the retail rate. The next step is for small producers to be aggregated and empowered to sell the energy they produce at wholesale rates and under terms and conditions of the wholesale market.

There will be no limits. “The NYISO does not intend to have a minimum size requirement for an individual DER [distributed energy resource],” wrote Michael DeSocio, Senior Manager of Market Design, in response to emailed questions from Energy Manager Today. “However, the minimum amount of capability that will be allowed to participate in the wholesale markets is 100 kW.  Individual DER may aggregate to meet the 100 kW threshold.”

In its story on the guidelines, UtilityDive laid out NYISO’s five objectives. They include integrating distributed energy resources into the grid; integrating ISO and the initiatives goals; improving measurement and validation capabilities and fostering wholesale compensation structures and market transactions.

It won’t be easy. “Integrating potentially thousands of MW of small dispatchable generators will be a technical challenge that the NYISO has not encountered before, but we are confident that we can do so,” wrote DeSocio. “Integration of those resources will help ensure that the NYISO’s wholesale market structures continue to foster competition in New York. Robust competition is the foundation of New York’s wholesale markets, and helps ensure that New York consumers continue to benefit from the markets operated by the NYISO.”

It will be a step by step approach, with much yet to be determined. “Implementing this initiative will entail considerable time, effort, and stakeholder engagement,” DeSocio wrote. “The Roadmap is a starting point for more in-depth discussions with stakeholders to develop market rules, operating requirements, and software to realize fully integrated grid operations. A series of pilot projects will test the various integrated components and help the NYISO and stakeholders more effectively integrate DER in New York’s wholesale markets.”

The context within which regulators in New York are operating is important. The seemingly inexorable growth of renewables in general and solar in particular has raised important regulatory issues. One key question is if those using solar are being subsidized by those that are not.

Those issues are the explored in a long and detailed report by Berkeley Labs’ Galen Barbose. The study, which was released earlier this year, deals with the question of costs to end users. Barbose suggests that state regulators might ask:

How large could the effect of distributed solar on retail electricity prices conceivably be? And how does that compare to the many other factors that also influence electricity prices—and over which state regulators and utilities might also have some control?

The report, “Putting the Potential Rate Impacts of Distributed Solar into Context,” is here, is here and a video presentation by Barbose is here.

The goal is to enable regulatory schemes to evolve at the same rate that the technology does. Since much of the energy being returned to the utility will come from non-residential sources such as commercial and industrial facilities, it is an important issue for energy managers to track.



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