IPL Asks FERC to Force Update to MISO Storage Rules

Posted by Laura Arnold / November 07, 2016 / Posted in Uncategorized / No Comments

IPL Asks FERC to Force Update to MISO Storage Rules

November 6, 2016

By Amanda Durish Cook

INDIANAPOLIS — After demonstrating the capabilities of its new 20-MW battery for five months, Indianapolis Power and Light says it’s time for it to get paid.

The energy storage system at its Harding Street Station here has been providing MISO with primary frequency response since May. But the company told FERC in an Oct. 21 complaint that the battery is “supporting the grid with no means for compensation for the services rendered” (EL17-8).

miso ferc ipl energy storage

Interior of IP&L’s Harding Street facility | AES

The complaint asks FERC to compel MISO to update its energy storage definitions and compensation.

“Nothing [in the Tariff] exists to allow the battery to participate in the regulation market and be appropriately paid,” Lin Franks, IPL’s senior strategist for RTO, FERC and compliance initiatives, told RTO Insider in an interview. “We’re hoping FERC will see the wisdom in compensating automatic frequency control, injecting when frequency is too low and withdrawing when frequency is too high.”

IPL argues its battery should be paid instead of charged when “withdrawing [power] in response to a frequency deviation.”

Franks said IPL is not trying to be critical of MISO in making the filing. She pointed out that in 2009, when MISO opened its ancillary services market in accordance with FERC Order 888, the requirement did not include details on how fast-start resources recover costs.

“That was fine for back then, but now that we have a lithium ion battery in the MISO footprint, it’s no longer just and reasonable. What was just and reasonable in 2009 isn’t necessarily just and reasonable now,” she said.

Franks said creating proper definitions and a compensation mechanism is an “industry-wide kind of challenge.”

“Nobody is mad at anybody. It’s just time to make a change … and we don’t want this to get on the back burner,” Franks said.

The battery — consisting of eight 2.5-MW blocks — is using the interconnection facilities of two gas turbine generator units, which connect to the Harding Street South substation. (See FERC Approves 1st Storage GIA in MISO.)

Franks said settlement and dispatch for IPL’s lithium ion batteries are “vastly different” than for MISO’s current Type II storage energy and demand response resources. IPL claims MISO’s dispatch protocols are currently tailored to flywheel storage only.

MISO spokesperson Jay Hermacinski said the RTO is assessing its next steps before responding to the complaint.

“It is relevant to point out that at MISO and across the industry, there are numerous discussions at both the policy and technical levels to determine the most efficient and effective ways to integrate new technology, including storage, to the grid,” Hermacinski said.

He added that MISO has begun work on broader storage issues, starting with a stakeholder workshop in January and through its market roadmap process. He also said MISO staff will attend FERC’s technical conference on storage Wednesday (AD16-25). (See “FERC Calls Tech Conference on Storage,” Federal Briefs.)

MISO is currently considering including medium-term energy storage resources in its definition of DR resources. (See MISO Stakeholders Provide Ideas on Incorporating Storage.) IPL called the current stakeholder process “indeterminate” and asked for “tight time limits on any required MISO compliance filings.”

Franks insists that MISO should gather stakeholders to work on new storage definitions. “You really have to start all over. It’s a very time-consuming process,” she said.

IPL has committed to sharing “as much data as it practically can,” Franks said, to help explain the battery’s benefits.

In its filing, IPL suggested using PJM’s Regulation D payment factor as a provisional model until MISO can develop its own method for compensation.

miso ferc ipl energy storage

IP&L’s Harding Street Facility exterior | DOE

PJM developed the regulation market payment after being approached by IPL parent company AES in 2009. AES’ Laurel Mountain facility in West Virginia — 98 MW of wind generation and 64 MW of integrated battery-based storage — has been providing PJM regulation service since October 2011.

The PJM payment mechanism is “certainly not going to be perfect for the MISO footprint,” Franks said. “But for the interim period, we’re suggesting that it is equitable and fair until MISO does its own body of work.”

Franks said working through the stakeholder process to incorporate a new storage definition and compensation into the Tariff would take about two to five years. She added that while IPL has a few ideas on what storage definitions might look like, it would rather reveal them in MISO’s stakeholder process.

“We prefer to share our data and testing and experience and work together to find a way that actually works to present to the stakeholders. No man is an island,” Franks said.

The Energy Storage Association lauded IPL’s move and urged FERC to take action to stop IPL from having to “operate the system in a suboptimal manner” and degrade the useful life of the battery.

“Without proper market structures that recognize the value delivered by energy storage systems, there is no way that the system can be dispatched cost-effectively. And without market signals that reflect the storage system’s operating parameters, the storage system could be unintentionally compromised or damaged,” the group said.

IPL’s complaint has attracted motions to intervene from American Municipal Power, Calpine, the Electric Power Supply Association, the Indiana Utility Regulatory Commission, Alliant Energy and the Coalition of MISO Transmission Customers and battery maker Alevo.

In the Final Days of the Election, Let’s Hear More About the Future of Clean Energy

Posted by Laura Arnold / November 05, 2016 / Posted in solar, Uncategorized, wind / No Comments

In the Final Days of the Election, Let’s Hear More About the Future of Clean Energy

"Jobs. Economic Growth. Cleaner air. What’s not to love for either candidate?"

by TJ Kanczuzewski
November 04, 2016

Earlier this year, I was invited to the White House to discuss the impacts of climate change on small businesses and the positive effects of implementing the Clean Power Plan. I know this topic isn’t as entertaining as the election mudslinging and therefore doesn’t generate the media buzz, but let me tell you about what I learned. I hope to hear this in one last speech before voting day.

I learned that very few members of Congress -- or anyone else -- have actually read the Clean Power Plan (CPP). Granted, it’s not a page-turner and it’s not 140 characters or fewer, but let me quickly summarize some key points:

CPP provides a national set of strategic policies intended to reduce air pollution and the emission of climate-change-causing gases.
Assuming the pending state lawsuits are rejected, states will be required to reduce their pollution 32 percent below 2005 levels, but that’s split up over 15 years, so 2 percent to 3 percent per year is not that challenging, right? Right. The technology already exists to accomplish this goal.
States can come up with their own plan to comply with CPP, so it’s flexible. States can use solar, wind, hydro, energy efficiency or a combination of clean energy to get rid of our old, polluting power plants.

Some of my Indiana and Michigan friends and local representatives say that the plan creates unnecessary regulation, and that it will cost jobs and raise electricity prices. Those assumptions are just assumptions.

The official CPP factsheet explains that the U.S. will see $20 billion in climate benefits and $14 billion to $34 billion in health benefits, and post a total net benefit after any extra costs of $26 billion to $45 billion. In other words, the plan will act as a kind of stimulus for the national economy.

In terms of jobs, lawsuits against CPP only create more jobs for -- you guessed it -- lawyers. To generate more middle-class jobs, let’s put the lawsuits aside and focus on upgrading our aging grid infrastructure and building new clean power generation facilities. Most U.S. coal plants are retiring anyway.

The solar industry has already proven itself to be a jobs engine. As of November 2015, the solar industry employed more than 208,800 solar workers, representing a job growth rate of 20.2 percent since November 2014. By the end of 2016, solar is expected to grow another 16 percent to nearly 240,000 workers.

Imagine how many more non-lawyer jobs would be created for solar, wind, energy storage and energy efficiency if states drop their lawsuits and implement CPP?

CPP also allows states to decentralize utility power plants. Thousands of moderately sized solar power plants, smartly paired with energy storage battery banks, could be built closer to communities across the country. Such a CPP-based strategy would help stabilize the grid and spread construction and operational jobs across entire states, especially in the Midwest and South where commercial- and utility-scale solar installations have largely lagged behind the solar expansion seen in the Southwest and Northeast U.S.

Opponents are also not considering the manufacturing jobs that will be created. There are already several solar and wind factories in Indiana, Michigan and Georgia. If we begin to implement the CPP and start building gigawatts of wind and solar projects, manufacturers will want to expand their operations into the many empty warehouses and shuttered production facilities scattered across the region. Moreover, new cleantech companies will also set up innovation hubs in order to meet the regional demand.

In a few years, the Rust Belt could be transformed into the Solar Belt.

As for the belief that solar and other renewables raise electricity pries, I can say that our company has built or is building utility solar power plants in Michigan, Indiana and elsewhere that are competitive with the long-term cost of building and running a fossil fuel plant. In the coming years, solar and wind will become even more competitive with conventional energy and will continue to drive down the cost of consumer electricity.

While the candidates are focused on email servers, building a wall, locker-room talk and why each is worse than the other, the U.S. continues to see unprecedented flooding, drought and wildfires. Let’s get back to concerns that will truly affect jobs, the air that we all breathe, and the future of our country.

Even if we can't do that in the final days of the election, let's hope the next president will.

***

TJ Kanczuzewski is the president of South Bend, Indiana-based Inovateus Solar. He is the 2016 recipient of the Outstanding Young Business Leader award from the St. Joseph County Chamber of Commerce, a husband, and a father of two children.

Inovateus Solar is an IndianaDG business member.

In Illinois energy bill drama, demand charge is central and evolving

Posted by Laura Arnold / November 01, 2016 / Posted in Uncategorized / No Comments

In Illinois energy bill drama, demand charge is central and evolving

WRITTEN BY Kari Lydersen, Midwest Energy News

PHOTO BY Ben Sutherland / Creative Commons

As the Illinois legislature’s post-election November veto session approaches, clean energy advocates and other stakeholders say they are negotiating feverishly to come up with a new draft of a long-awaited energy bill.

While there are multiple contentious aspects of the bill, including a subsidy to keep the state’s nuclear plants running, the demand charge has been a major sticking point.

ComEd says charging customers based on their highest demand spikes is necessary to adequately cover the cost of keeping up the grid. Consumer groups and solar developers say the charge would raise bills unfairly for many customers, and chill distributed solar development.

During recent negotiations, ComEd has revised their proposal from the bill introduced in May, the Next Generation Energy Plan, backed by both the utility and its parent company Exelon. Legislators have reportedly signaled that the companies and clean energy advocates, who have introduced their own bill, must come up with a unified proposal. The demand charge is among the areas where ComEd has made concessions to opponents.

ComEd senior vice president of customer operations Val Jensen said the new proposed structure of the demand charge is meant to address fears about unfair and unpredictable bills based on isolated usage spikes. And he said the charge is necessary to cover the costs of delivering electricity to individual customers.

“The current pricing system based on kilowatt-hour consumption we don’t believe is an equitable way to charge customers,” Jensen said. “We are willing to consider alternatives to our original proposal so long as we’re able to maintain the principle that we move away from a volume-based charge to one based on demand.”

But some vocal critics of the demand charge say the concept is inherently faulty, and no degree of modifications will win them over.

Defining peak demand

In the bill introduced in May, ComEd proposes to base the demand charge on a customer’s single highest 30-minute period of energy use each month. Critics argued that this could mean bills based on a single evening when someone had a party or did a lot of laundry.

Jensen confirmed that ComEd’s current plan is to base the demand charge on a monthly average of customers’ 30-minute peak each day, during a window most recently set at 6 am to 10pm, though he said that window could change.

Jensen said the fear that once-a-month spikes would drive up bills under the previously-proposed structure is “something most people don’t need to worry about.” But “to the extent that it is driving the conversation, we’ll take it off the table, and focus on the core concept” of a demand charge, he said.

Critics of the demand charge say the new structure is a little better than the original proposal, but will still make it virtually impossible for customers to predict their bills or reduce their bills through conserving energy. And such unpredictability could be deadly for the solar market, some developers say, since customers would not be able to predict the payoff for solar installations, and their bills could be determined by usage spikes when the sun is not shining even if they generate lots of their own energy when it is.

Rebecca Stanfield, vice president of policy and electricity markets for SolarCity, said ComEd’s revised demand charge structure “helps prevent wildly different spikes and valleys, but it doesn’t address any of the other ways in which demand charges violate basic ratemaking principles.

“Imagine sitting down at the kitchen table and looking at your electric bill trying to decide should I invest in a new furnace, air conditioning, solar,” she said. “You have to be able to with basic math predict how it’s going to impact your bill. With demand charges you cannot do that, unless you know how many kilowatts each of your appliances use and you know exactly when you use them. It’s almost impossible.”

Whose peak?

Demand charge critics also argue that an individual’s peak demand does not mirror system-wide peak demand, and are therefore not a good way to reduce overall stress on the system or the need to run natural gas-fired peaker plants during peak demand times.

They say that time of use pricing, where customers are charged different rates based on system-wide demand, and other tools are much better options.

“You can change [the calculation of peak demand] hours one way or another, but the bottom line is mandating residential demand charges when there is no relationship between individual customers’ peak demand and the cost of the grid as a whole is an unnecessary move for the state,” said Amy Heart, director of public policy for the company SunRun. “This doesn’t make sense from a rate design perspective.”

Jensen countered that such concerns reveal a misunderstanding of the purpose of a demand charge. The demand charge was never meant to reduce system-wide peak demand, he said. Rather, it is meant to cover the utility’s costs for delivering electricity to individual consumers. The wires and other infrastructure leading to each house or business must be able to handle that customer’s peak demand whenever it happens, he explained.

‘[System-wide] peak demand is how we go out and purchase capacity to serve customers’ loads’

In that sense it is more like a fixed charge, an existing part of most utility bills nationwide. In states including Wisconsin, utilities have sought greatly increased fixed charges as a way to offset lower energy demand and hence lower payments on the volumetric, per-kilowatt-hour parts of customers’ bills. Utilities have said such increased fixed charges are necessary given the proliferation or possible proliferation of distributed rooftop solar.

“[System-wide] peak demand is how we go out and purchase capacity to serve customers’ loads,” said Jensen. “But the costs of our distribution system are really driven by non-coincident peak demands…by building wires and poles.”

In the proposed legislation ComEd is actually proposing to lower its fixed charge. But critics say this is little consolation if the demand charge functions like a fixed charge, and an unpredictable one at that. Critics note that people will not be incentivized to reduce energy use, install solar or take any other action if they can’t see how it affects their bills.

Attorney General Lisa Madigan has spoken out against the demand charge for this and other reasons. “ComEd’s so-called demand rates proposal could unfairly result in consumers being charged more for using less electricity, needlessly taking away control and predictability in their bills,” she said in a statement to Midwest Energy News.

The latest version of the demand charge being negotiated actually includes three separate demand charges, Jensen explained. Bills have traditionally included distribution, transmission and capacity or generation components — separate fees meant to cover the generating of power, the transmission over long distances to population centers and the distribution within a utility’s service territory.

ComEd wants to move all of these facets to a demand charge model. The distribution demand charge would be based on the individual’s highest spike each day averaged over a month.

The capacity and transmission demand charges would be based on a customer’s highest usage within the five-day period wherein ComEd’s system as a whole has its highest demand. The regional transmission organization, PJM, which transmits electricity to ComEd’s grid would let the utility know each year which five days its demand was highest.

Customers would have no way to know when their capacity and transmission demand charges are being calculated. Critics say this furthers the level of unpredictably and lack of control for customers, making it even harder for them to install solar or take action to reduce their energy bills.

Jensen said that while it is a change, most customers won’t see a significant impact from the transmission and capacity demand charge and that it is a more fair way to charge customers.

Net metering and rebates

Linked to the demand charge, ComEd is also proposing to alter how it compensates customers with distributed solar. The bill would end net metering, and replace it with a one-time rebate of $1,000 per kilowatt for residential and $500 per kilowatt for commercial and industrial customers.

Solar developers and advocates oppose the end of net metering, which is widely considered crucial to a healthy solar market. Some also criticize the fact that ComEd would be able to recoup the costs of the rebates from ratepayers, since the rebate would be considered a “regulatory asset.”

“Instead of a solar owner getting the whole benefits of their solar installation, there is a rebate that doesn’t fully compensate the solar owner and maybe more importantly actually creates a cost shift to all ratepayers,” Heart said.

In order to receive the rebate, customers would also have to agree to let ComEd essentially have control over their smart inverters, which decide whether and how much power is sent to the grid from solar panels. Smart inverters that communicate with the utility and the grid are widely considered key to a smart grid; a way to reduce overall peak demand and increase system-wide efficiency. But some see the requirement as an incursion on customers’ rights.

Jensen said ComEd wants to see a robust solar market grow in Illinois, and thinks the rebate will help make that happen.

“The rebate I’ll acknowledge might not be the best for all solar companies depending on their business model,” Jensen said. “But the rebate is actually better economically from a customer’s perspective. Because with net metering you have to make assumptions about the future of energy prices. A rebate is money in hand right now, that’s worth a lot more on a present value basis than a stream of benefits over 20 years.”

Regulating through legislation?

With the demand charge, rebate and various other provisions proposed by ComEd, stakeholders generally agree that the devil is in the details and policies could play out in different ways depending on multiple factors.

For this reason, many clean energy and consumer advocates say, such provisions should go through ratemaking processes in front of the Illinois Commerce Commission, rather than being decided by lawmakers who are not experts in energy policy and who could be more subject to influence from donors or lobbyists.

The commerce commission has a set “adversarial process” wherein experts and stakeholders submit testimony and evidence. Legislation by contrast can tie the hands of the commission, the Attorney General and other official actors, by limiting their options.

“We’re looking at things like what should the measurement period [of peak demand] be,” said Patrick Bean, SolarCity deputy director of policy and electricity markets and pricing analyst. “That happens typically in a regulatory proceeding, where there is review, you assess whether it’s fair. This is a mandate on a large mass of customers without any research or pilot behind it. That’s one of the main concerns.”

The national picture

Demand charges have long been used for industrial customers, who have large amounts of energy delivered and have significant control over exactly how much they use and when.

But demand charges for residential customers are a relatively new and highly controversial idea. Demand charges have been proposed 12 times by investor-owned utilities and rejected by regulators or withdrawn by utilities in every case, in states including Kansas, Arkansas, California, South Dakota, Tennessee, Oklahoma, Texas and Iowa, according to an analysis by the solar company SunRun.

‘This is a 19th century rate structure designed for industrial customers’

Commissions typically mandate higher levels of scrutiny than is mandated in passing legislation. Experts say ComEd is the first utility trying to institute a demand charge through legislation.

In Kentucky, the Attorney General intervened after the Glasgow Electric Plant Board instituted a demand charge that caused significant rate increases. In an August letter, Attorney General Andy Beshear said the charges “are so outrageous customers report going to extreme measures to avoid these excess charges, including traveling between work and home five or six times a day to adjust their thermostats or appliances, and elderly customers turning off their air conditioning and staying in their homes, even after temperatures reach 92 degrees; yet their bills continue to rise.”

Glasgow’s demand charge is based on a customer’s one-hour peak use per month. While Glasgow demanded EPB go back to its old rate structure, a new one was instituted as an alternative to the demand charge, with separate prices for on-peak and off-peak times.

In Arizona, the Salt River Project, a cooperative not subject to the utility commission, instituted a demand charge on all customers with solar. The SRP predicted customers would see a $50 increase per month in their bills, though the actual increase reportedly averaged $29 a month, which the SRP attributed to people changing their energy use behavior.

Nationwide, critics have argued that elderly and low-income people would be least able to change their energy use and most susceptible to bill increases resulting from demand charges.

On October 12, the consumer group Illinois PIRG circulated a letter opposing demand charges signed by elected officials and organizations representing black and Latino Chicago communities and retired and low-income people. The letter’s signers included the AARP, a long-time critic of demand charges, and Jesus “Chuy” Garcia, the popular county commissioner who forced Mayor Rahm Emanuel into an election run-off last year.

“As we make further strides in efficiency, and as distributed solar penetration rises, utilities are worried they have to maintain the same level of infrastructure while selling less and less electricity. That’s an understandable and real concern,” said Illinois PIRG director Abe Scarr.

“That they attempt to spin demand charges as ‘modern’ is ironic — this is a 19th century rate structure designed for industrial customers. Utilities are pretending it will move us forward when really it is an attempt to slow down the transformation of our power system.”

5 unanswered Q’s after Tesla’s big solar roof and battery announcement

Posted by Laura Arnold / October 31, 2016 / Posted in Uncategorized / No Comments

5 unanswered questions after Tesla's big solar roof and battery announcement

As the dust settles, the details of Elon Musk’s new solar-plus-storage offering remain unclear

AUTHOR: Gavin Bade @GavinBade

PUBLISHED: Oct. 31, 2016

For a while now, Tesla has situated itself as the Apple of the electric storage and transport industries. It streamlines the design of an existing technology, makes it sleeker and sexier, while expertly marketing it to cultivate an upscale, but mass-market following.

The company first did it with its electric vehicles, producing sought-after luxury cars and then gradually moving toward less expensive models. And it brought residential energy storage into the consumer mainstream last year when it unveiled the Powerpack, the first generation of its home battery.

Now Tesla is leveraging its planned acquisition of solar installer SolarCity to do the same thing with residential solar and storage. Last Friday, CEO Elon Musk unveiled a slate of integrated solar roof and battery storage offerings that mimic the design of traditional roof shingles and eliminate the external mounted panel design.

The glass PV tiles, available in a number of common roof colors, will cost “less than a normal roof plus the cost of electricity,” Musk promised, and will integrate with the Powerwall 2, the second generation of Tesla’s home storage system.

That new battery is powerful enough to run the refrigerator, sockets and lights of a four-bedroom house for a day — or indefinitely when combined with the solar system, Musk said, touting a future where everyday consumers have a solar roof, battery and electric vehicle.

But like Tesla events of the past, those general operational and cost promises are about as much detail over the specifics of the battery and the solar system as Musk divulged all night. Details about the panel efficiency, battery life and overall cost were left out of Musk’s presentation, leaving a number of open questions about the sleek new Tesla offering and its potential impacts on the market.

1. Solar roof specifications

Just as Tesla was not the first to offer electric vehicles or home batteries, it is not the first in the integrated solar panel market.

While not widespread for the residential market yet, a number of large buildings have demonstrated the effectiveness of solar technologies integrated into their designs, including the National Air and Space Museum. And Greentech points out there are a number of integrated solar roof installers on the market already, though no runaway commercial successes.

Integrated PV technologies are appealing for their sleek design, but are more expensive than existing rooftop solar models that are simply bolted to a homeowner’s roof. Typically, integrated PV does not generate power with the efficiency of traditional panels, which can more easily be faced toward direct sunlight.

Beyond his promise that the Tesla roofs would cost less than traditional ones over time, Musk offered no pricing or efficiency details on the new solar roofs, as well as no insight as to how power contracts with consumers would be structured. Currently, SolarCity contracts typically guarantee solar output for 20 years, but most roofs are expected to last longer.

Other financial aspects of owning the PV roof, such as its impacts on a mortgage, resale value, homeowner’s insurance and other aspects of property value remain unclear, though those are issues that continue to bedevil the residential solar sector at large.

It also remains to be seen how the glass panels perform in the field. Typical solar panels require regular cleaning to achieve maximum output, and it's unclear whether homeowners would have to regularly wipe down their PV rooftops to generate energy.

Tesla solar roof styles — Available in different styles, Telsa's solar roofs are designed to mimic traditional styles.

Tesla press kit

2. Battery specifications

A bit more is known about the solar roof’s partner — the Powerpack 2.

At the event, Musk said the new 7 kW, 14 kWh battery will cost $5,500, including a custom inverter. That capacity outpaces both the first iteration of the Powerpack and a larger, 10 kWh model Tesla discontinued last year.

That size battery is likely better suited to the average American homeowner, GTM reports, but little is known beyond its size and price. Tesla did not release details about the expected efficiency or cycle life of the Powerwall 2, or the second iteration of its Powerpack grid-scale battery, released Thursday evening.

Cycle life, or the number of cycles a battery can perform before degrading to a certain level, is expected to be crucial for customers of both the residential and grid-scale batteries. Using a home battery to store and discharge solar from a PV roof typically uses at least one cycle a day, as do grid services such as ramping or shifting renewables generation.

The rate at which batteries degrade determines how long they can be used before needing replacement, and often forms the foundation of energy storage contracts with utilities. But Tesla has never publicly released degradation curves or other performance information regarding their energy storage systems or car batteries, which some companies consider proprietary information.

Tesla currently offers an eight-year “unlimited mile” warranty for its Model S electric vehicle batteries, but makes no commitment to replace the $44,000 car battery after that time.

A survey of Tesla owners by EV advocate Plug In America last year showed that the Model S generally loses about 5% of its capacity within the first 50,000 miles of driving, but the jury is still out on how the batteries will perform once they reach the end of the warranty period.

tesla solar roof batteries — Tesla's new Powerwall is more rectangular than its predecessor.

Twitter user Tom Randall

3. Solar and storage markets

But even if the integrated PV and storage market is not large yet, Tesla is not without competition.

There are a number of companies installing integrated solar roofing projects, Greentech notes, including names like SunTegra and Solarmass. There’s also a sizeable list of high-profile failures, like SunEdison’s Ready Solar and PV shingle offerings from Dow Chemical and PV.

As impressive as the design of integrated solar shingles is, Greentech’s Eric Wesoff points out that hasn’t been the biggest issue in commercializing it with other companies. Instead, it is launching a pricey, newfangled environmental technology through a conservative roofing industry.

“PV panels and roofing have very different roles, and I've observed that combining the two compromises both at a premium cost,” the editor wrote in an open letter to Musk.

If Tesla can succeed in convincing consumers and the broader industry that its roofs are indeed cheaper and more durable than traditional designs, its brand recognition and reputation could help it make inroads. But it remains to be seen how the company will go about sharing the technology behind its new combined offering.

Currently, Tesla makes many of its electric vehicle patents public, but other aspects of its business are strictly vertically integrated. The company does not sell its cars through third party dealerships and even uses a different charger outlet than other EVs.

With the planned merger with SolarCity, Tesla appears to be spreading that vertically integrated model to its energy offerings, creating an all-in-one distributed energy company. If it continues that trajectory, that could see it stop selling batteries to third-party installers like Sunrun, which currently uses Tesla batteries for its residential solar offering and would be a direct competitor with a merged Tesla.

4. The SolarCity merger

Musk’s event on Friday was about more than unveiling a new product — it was also a chance to show Tesla investors the promise of a merger with SolarCity, the largest residential rooftop installer in the U.S.

Since Tesla announced its intent to buy the company in June, some analysts and shareholders have reacted skeptically. Musk is SolarCity’s chair, his cousins run the company, and many saw the move as a bailout for the residential installer, whose business model relies on hefty debt financing to support its model of no-upfront-cost solar leases.

Tesla’s unexpected third quarter profit, reported last week, gave pause to some of the most anxious shareholders, and Musk’s unveiling of an exciting, integrated product could buoy support for the acquisition.

If that goes badly for Musk, the future of the new solar roof option appears in doubt. In a “master plan” for Tesla unveiled in the summer, Musk hinted at a new integrated solar offering and warned that it would be impossible to offer it if SolarCity remained a separate company.

Whether shareholders view the solar roof offering as an exciting new extension of Tesla’s business or a risky bet on an unfamiliar market remains to be seen. They vote on the merger Nov. 17.

5. Utility sector impact

Musk often frames his business moves as part of a larger strategy to clean up the electricity and transport sectors, allowing them to run on renewable energy and modern energy storage.

That broad vision is one shared by a number of policymakers, including U.S. leaders who signed the Paris Climate Accord last year. But just how deep that decarbonization of the power sector affects utilities remains to be seen.

Fossil generators are sure to feel the impacts, and many are already dealing with widespread coal plant retirements. But Musk said that the future for electric utilities in this cleaner future remains bright.

Powering new electric vehicles will increase demand for electricity, making utilities more critical to the modern energy system and assuaging concerns of a financial “death spiral” for the sector. Going forward, Musk predicted the grid will eventually reach an equilibrium with about one-third of power coming from distributed energy and two-thirds from utilities.

“I think it’s a very bright future for utilities and rooftop [solar],” he said.

Follow Gavin Bade on Twitter

IPL files FERC complaint about MISO energy storage rates

Posted by Laura Arnold / October 31, 2016 / Posted in Uncategorized / No Comments

Indiana utility files with FERC for changes to 'outdated' MISO storage tariffs

Dive Brief:

Indianapolis Power & Light (IPL) has filed a fast track complaint asking the Federal Energy Regulatory Commission (FERC) to find that the Midcontinent ISO’s rules for energy storage are deficient and should be revised.
The focus of the complaint is IPL’s its 20 MW Harding Street battery storage plant that entered service in May. The facility provides MISO with a variety of ancillary services, but IPL says the ISO does not have appropriate tariffs or business practices so IPL cannot dispatch the device without harming the batteries.
MISO's current tariffs were designed for flywheels, IPL argues, and should be revised to include all technologies, with a new category for lithium ion batteries to ensure they are "not degraded because of outdated operating parameters."

Dive Insight:

MISO has been reforming its market rules to spur development of energy storage.

There has been some success, at least in terms of getting IPL’s Harding Street project up and running. But while the battery is operational, IPL says MISO’s tariffs and business practices hamper its operation.

IPL is seeking fast track treatment of its request because it says MISO has been engaged in “ongoing, indeterminate stakeholder process on battery energy storage issues,” and the utility asked FERC to place “tight time limits on any required MISO compliance filings.”

Harding Street currently provide frequency control services, automatic grid-scale service, including primary frequency response, and contributes to MISO’s compliance with North American Electric Reliability Corp. standards, but IPL says there are no provisions in the MISO tariff to compensate IPL for “the essential reliability service” that Harding Street provides.

IPL has asked FERC to find that MISO’ tariff is unjust and unreasonable and unduly discriminatory with respect to the compensation of primary frequency response (PFR) and that PFR should be paid under a separate tariff.

IPL also argues that MISO’s tariffs for ancillary services, energy, ramp, and capacity were designed for the operating characteristics of flywheels, which excludes other applicable technologies such as lithium-ion batteries, and that FERC should have MISO lift those restrictions.

"MISO Tariff SER resource type was designed solely for the operating characteristics of flywheels and limits them to providing Regulating Service," the utility said. "The Commission should direct that the Tariff be reformed so that Resources technically capable of providing various products under the Tariff be permitted to provide such products, regardless of resource label or technology."

Additionally, IPL argued MISO should create a new category for lithium ion battery storage that "respects the operating characteristics of this technology and permits the grid to benefit from its unique capabilities."

The utility suggested that FERC make MISO reform its tariff for regulation service to make it closer to the tariffs used by the PJM Interconnection. PJM’s REg D market has been so successful that the ISO has called a moratorium on new Reg D resources.