Energy

Renewables, efficiency will gain steam, say energy execs

Mary Powell
Mary Powell is CEO of Green Mountain Power. File photo by John Herrick/VTDigger
BURLINGTON — Vermont may be able to avoid expensive electrical grid upgrades by increasing the use of technological solutions and in particular efficiency, according to several speakers at an industry conference Wednesday in Burlington.

“One way to meet the growth (in electric demand) is not to have the growth,” said Ethan Goldman, an energy informatics architect at Vermont Energy Investment Corp.

Managing peak demand will become especially important in coming years, as electric vehicles proliferate and sectors of the economy that now rely on fossil fuels or other emissions-heavy fuels convert to electricity, speakers said.

“It’s about crushing the goddamn peak,” said Mary Powell, CEO of Green Mountain Power, the Quebec-owned utility that supplies around 78 percent of Vermont’s electricity.

Grid operators must pay to build and maintain enough capacity to handle peak power demand, but that amount can be at least twice what’s needed on any given day.

Lower those daily and seasonal peaks, the thinking goes, and you can lower costs.

Vermont Electric Co-op CEO Christine Hallquist said her company’s power lines are usually transmitting 54 percent to 56 percent of their capacity.

Industry representatives at the conference discussed a range of approaches to solving the problem of peak demand. Those include increasingly sophisticated tools such as “smart” home electric meters that relay a range of data to utilities, and machine-learning software that can predict when peaks will take place.

The conference was sponsored by Vermont Electric Power Co., a transmission company.

High on the list of possible solutions — and at the top of many speakers’ lists — was energy efficiency. The cheapest form of electricity is power that isn’t purchased, more than one of them said.

Powell said she hopes Green Mountain Power can bring its peak demand down to 600 megawatts, from the current peak of 760 megawatts.

Doing so “can shed a lot of the costs of the inefficiencies of the New England grid … and we can save significant money over the next couple of decades by doing that,” Powell said.

Many of the conference’s nearly 20 presenters said these savings would be realized through greater focus on the people who actually buy the electricity.

“Grandma’s electrical system” — the 130-year-old model in which monolithic utilities get energy from a small number of huge electric generators — won’t work in the future, Powell said. That’s partly because the logistics of that model don’t mesh with small renewable energy generators that are proliferating throughout the state. But it’s also in part because customers are demanding other approaches.

Most Americans don’t support the massive coal-fired power plants that once dominated the country’s electric market, because they’re aware of the costs and risks of the pollution they generate, said Gil Quiniones, president and CEO of the New York Power Authority.

And while the American coal industry has been decimated by cheap natural gas, the cheapest new generation resource these days is actually wind power, said Tom Dunn, VELCO’s president and CEO.

Vermonters should feel some assurance that, for reasons like these, energy conservation and renewable energy generation will continue to expand even in the face of opposition from President Donald Trump and Congress, Dunn and others said.

“This transformation is going to happen in spite of what goes on in Washington,” Dunn said, echoing similar remarks from Quiniones.

“I think people, customers, cities want this to change,” Quiniones said. “I don’t think federal policy will be able to stop it.”

Powell put it more bluntly.

Efforts like the ones grid managers discussed Wednesday will prevail in the end, Powell said. And, “because a lot of people are pissed off,” their success will exceed what could have been accomplished without that added motivation.

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  • Pete Novick

    “Renewables, efficiency will gain steam, say energy execs”

    Gain steam?

    Nice play on words, (and thermodynamics, too).

    • bill_christian

      There are steam powered renewable systems. Sterling cycle with concentrating solar. Geothermal steam. Both are big in California. Geothermal steam causes little earthquakes, like fracking does…

  • Gerry Silverstein

    One way to reduce consumption is to reward people financially who consume less electricity. An NRDC study in the northwest showed that 25% of all electricity consumed is “zombie” electricity…. keeping devices in standby mode when they are not being used.

    Auto insurance companies reward individuals for a good driving record, health insurance companies reward people for living a healthy lifestyle (not smoking, maintaining health weight, etc), college bound students are rewarded with scholarships if they excel in public schools (Green and Gold scholars in Vermont go to UVM paying no tuition)… so why not build a reward system for using less electricity. The customer benefits, the grid benefits, and the environment benefits as fewer IWTs have to built on Vermont ridge-lines and in national forest land.

    • Matthew Davis

      “and the environment benefits as fewer IWTs have to built on Vermont ridge-lines and in national forest land.”

      You seem to be suggesting that IWTs have a larger impact than other electrical generation. What makes you think that?

      I have personally used my electrical bill as incentive for using less energy but I do agree that there certainly could be other incentives for using less electricity.

      • bill_christian

        Long ago, Mass Electric charged (pardon the pun) for electricity in a way that greatly rewarded conservation. Every residential customer got a small amount, for a very low price, and then paid more for each kilowatt-hour as they used more and more. This is a very good way to encourage conservation. Fair.

      • Gerry Silverstein

        My understanding is there are significant negative environmental consequences to placing IWTs on ecologically sensitive ridge-lines (as opposed to large flat open spaces in the midwest where winds blow with significant frequency and speed). Reduced consumption should lead to many benefits…. I have mentioned what I believe to be one of the most important in Vermont.

    • bill_christian

      Gerry, can you give a link to the NRDC study? I have read this before, and find it incredibly hard to believe. Thanks.

  • bill_christian

    What is the cost of changing our climate, in cents per kWh?

  • bill_christian

    The biggest externality is a changed climate forever. If this is included, in actual cents per kWh, natural gas would be 10 times the cost of wind or solar. Forever is a long time, and has a very high cost.

    • Willem Post

      Bill,
      Where is your analysis for the the 10 times factor?

    • Jim Manahan

      If you could also include the analysis of “a changed climate forever” and evidence that any potential “change” is a positive one, that would be much appreciated as well.

    • Kathy Leonard

      That ship sailed 40 years ago, Bill.

  • Jim Manahan

    What subsidies are there for natural gas?
    Without subsidies, we wouldn’t have IWT on our ridgelines.

    • Willem Post

      Jim,

      Exactly right.

      Warren Buffett, considered one of the outstanding investors of all-time, has stated: “On wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”

      Federal subsidies for wind, solar, and other renewable sources will be decreasing in future years. See table for Investment Tax Credit and Production Tax Credit, which are used by owners to offset federal taxes on any other business, the reason Warren Buffett invests in wind turbines. The “accelerated depreciation” subsidy (within about 5 years) remains; it reduces federal income taxes of multi-millionaire investors.
      https://www.novoco.com/sites/default/files/atoms/files/path_act_summary_chart_renewable_energy_expiration_dates_050216.pdf

    • Matthew Davis

      “What subsidies are there for natural gas?” There are many, and this resource does not even include the subsidy in the form of pollution, of which RE has little to none. This is only 2 fiscal years and it does show that in recent years renewables have received more than fossil fuels, but historically the oil and gas industries have received considerably more. https://www.eia.gov/analysis/requests/subsidy/

      “Without subsidies, we wouldn’t have IWT on our ridgelines.”

      That seems irrelevant given the context of subsidies for all generation types as well as transmission.

      • Jim Manahan

        I guess it depends on how you define pollution.
        So, in only two fiscal years where RE is peaking it is exceeding oil & gas; that’s not a good trend.

  • Chet Greenwood

    “Vermonters should feel some assurance that, for reasons like these, energy conservation and renewable energy generation will continue to expand even in the face of opposition from President Donald Trump and Congress, Dunn and others said.”

    Vermont has a renewable energy plan in place so how do “Dunn and others” expect Trump and Congress to interfere with Vermont’s plan, other than possibly discontinuing tax credits to out of staters to erect IWT or solar arrays in Vermont?

    What Trump is against is for U S taxpayers committing $2.5 trillion over the next 10 years to a global community organization that will force restrictions on U S citizens while other countries are exempt. He is not against energy efficiency.

    • Willem Post

      Chet,
      Trump bashing is in vogue, even to the point of being irrational.

      The Green Climate Fund aims to distribute about $100 billion in 2020, and much greater amounts in each year thereafter, for redistribution to needy countries that signed up for COP-21.

      The US, about 20% of gross world product, would have to contribute about $20 billion in 2020 and much greater amounts in each year thereafter.

      The UN would administer the Fund; it would become the mother of all boondoggles. The Fund has raised $10.3 billion, $3 b from the US.

      Trump said the US will not be a cash cow for the Fund, wanted to renegotiate, but Italy, Germany, and France said no renegotiation.

  • Moshe Braner

    “Managing peak demand will become especially important… a range of approaches to solving the problem of peak demand. Those include … “smart” home electric meters…”

    – we’ve had those “smart” meters for years now. Their stated goal was variable-rate billing. But that has not been done – why? During peak-demand times the wholesale cost of power often greatly exceeds the retail price. Thus, those who contribute most to the peak demand are being heavily subsidized. This subsidy is far larger than the often maligned “net metering” subsidies. This badly needs to change if we are to “manage the peak”.

    If you lower the rates at off-peak times, and raise it at peak times, the average bill can remain the same, but the high users would contribute more towards the true cost of their choices, and conservers would no longer be subsidizing the profligate. Put your money where your mouth is.

    Those who opt out of “smart” meters should be charged higher rates for usage over some basic monthly amount. This could have been done years ago, avoiding the expense of the “smart” meters.

    • Willem Post

      Moshe,

      According to hour by hour data of ISO-NE, the peak wholesale price exceeds
      7 – 8 c/kWh for only a few hours during the year, usually from 5 to 7 pm. On very rare occasions it is about 10 c/kWh. GMP and I are very familiar with these numbers. Just google.

      Reducing the GMP peak demand hours requires higher rates during these hours and only these hours, say 3 to 8 pm.

      Just double the rates during these 5 hours and the Vermont peak would be reduced by several hundred MW in less than two years.

      It is like doubling the fines in a construction zone on a highway.

      No expensive battery systems, microgrids and islanding is required.

      • Moshe Braner

        When you say “peak wholesale price” I think you mean the average price at the peak time. The marginal cost of those last few megawatts is much higher though, I gather it can reach 50 cents or more per KWH – far higher than the retail rate. That, plus the cost of transmission infrastructure that can carry that much power (a small percentage of the time), is why the GMP CEO is quoted above saying that “It’s about crushing the goddamn peak”.

        We agree that appropriate billing policies can promote behavior that “shaves the peak”. The current practice of flat-rate (per KWH) billing does not reflect the true costs. Some large commercial customers pay a fee based on their peak demand, but residents do not.

        • JohnGreenberg

          Years ago, as a (very small) commercial customer, my business did pay a peak demand charge. But it was computed by taking the highest usage at any given moment (minute? hour?) during the month and multiplying it by a given amount. The demand at any other time didn’t matter.

          This is NOT adequate.

          Instead, what you and I both advocate is a system which charges for each KWH at rates which are adjusted for demand. At worst — without smart meters — the rates could be set by time of day and time of year, according to known patterns. With smart meters, the rates could change on a more fluid basis as actual peaks occurred. That would
          allow for dynamic demand management, which modern grid technology can accommodate.

          We should also have a system which discourages inefficient use at all times by charging more per KWH as usage increases. CA already does this: it has a 3-tiered rate structure with sharply rising prices in each tier.

          It’s a bit of mystery to me why this hasn’t happened in VT.

        • Willem Post

          Moshe,
          ISO-NE has real time spreadsheets with minute by minute wholesale prices.
          Just google. No guessing is required.
          Very rarely do prices exceed 8c/kWh.
          Why not verify it yourself.

        • Willem Post

          No, Moshe, the ISo-NE spreadsheet shows minute by minute prices.

          Crushing the goddamn peak is typically done by starting up some diesel generators once a month for a few hours to minimize ISO grid charges. GMP has been doing that for decades.

          Time of day pricing can also be used to reduce the peak.

          I do not know why Powell is cursing in public.

  • Willem Post

    Matthew,

    You asked that question before.

    GMP is the source for the 9.8 c/kWh (heavily subsidized.

    5-6 c/kWh in the Great Plains with tall wind turbines and steady, good to excellent winds.

    Please do some googling, as I do.

  • Willem Post

    John,
    By financial gimmicks the Deerfield cost to GMP of 8.8 is lowered to 4.8 due to GMP selling RECs; that energy cannot be counted to Vermont RE goals.

    What rate payers pay is another issue.

    Caveat: Deerfield is not built.

  • Paul Drayman

    Sorry if I seem like a pest. When you say that GMP gets wind power from GRW in New Hampshire, in reality they have a purchase contract which is on paper. I believe that I am correct on this point. It is very unlikely that there are transmission lines bringing that wind power to GMP.
    Additionally, companies like GMP or any other or a power consumer can purchase REC’s and can and do then claim that percent of RE as part of their energy profile. All they are doing is buying the privilege to claim that. It is one of the RE industry’s “financial gimmicks” to which Willem Post refers. Maybe Willem can explain it better if any part of what I just wrote isn’t quite correct.

  • Paul Drayman

    Yes, to be sure, the REC system provides much incentive to the industry to build these wind fields anywhere, especially in areas that do not need the added electricity. These REC’s can then be bought by any entity that wishes to claim that they are using quantities of renewable energy either to improve their image or to meet standards. The actual amount of solar and wind they are using if they are part of the NE Grid is about 5% or a total of 15% if you include hydro.
    The idea that the REC system was developed by the states is suspect since it is a worldwide market. I have no problem with incentives for the RE industry. If you think, though, that the RE industry was just an accidental beneficiary of the REC system, then you must be naive, which you are not.

  • Matthew Davis

    “The actual amount of RE from wind and solar in the grid, not just from
    GMP, but from all sources is around 5% and will remain around that
    amount”

    You have been saying this but provide no factual evidence. Are you considering this an average? At this moment according to the ISO-NE real time data, the current fuel mix for RE is 8% and it will go higher. This likely does not show behind the meter RE. Hydro is an additional 10% if you consider that RE.

    “RE projects are adding electricity where they are not needed.”

    Still no factual evidence for this either. Furthermore, why not become an exporter when there is a demand? We are part of a regional grid…..should MA not export its electricity to us? What about HQ? Should they not export to us? Your argument makes no sense in the current market.

    “These efforts by citizens are what have temporarily slowed the development of RE in rural areas as of late.”

    This is the irony in VT…we want RE, but just don’t put it in my backyard.

  • Matthew Davis

    “ISO N.E. expects trends to continue for dramatic increases in the use of natural gas.”

    This is misleading. N. Gas generation is expanding to replace closing coal,oil and nuke plants. The more RE added to the grid the less gas that will be used. This is the grid of the future and ISO NE sees that.

    It’s already happening: https://www.sciencealert.com/california-grid-smashes-record-gets-67-of-energy-from-renewables