Utility and Efficiency Businesses Take Key Step on New Utility Rate Designs


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Rate Design Initiative unites utilities, regulators, and advocates to craft innovative utility rate design that boosts energy efficiency, demand response, and time-of-use pricing while safeguarding consumer protection and reliable, cleaner power.

 

Key Points

A coalition creating fair, efficient utility rate designs that reward smart energy use and ensure reliable service.

✅ Aligns prices with time-of-use and demand response

✅ Protects consumers while enabling utility cost recovery

✅ Leverages smart meters, analytics, and dynamic pricing

 

The Alliance to Save Energy announced Wednesday it has successfully completed the first round of negotiations with a group of utilities and efficiency groups to develop new recommendations that could shape how millions of Americans use and pay for energy in their homes. The group’s members agreed unanimously on a set of core principles guiding their work toward developing new utility rate designs that encourage the efficient and productive use of energy.

The Rate Design Initiative, convened by the Alliance, aims to unite utility and efficiency companies, regulatory leaders, consumer advocates, efficiency groups, and environmental organizations around innovative rate designs that incentivize energy efficiency and clean energy goals, while also addressing adequate cost recovery for utilities. The initiative was launched to support the evolution of utility rate design while balancing the need to support efficiency and environmental performance goals.

“What we’re trying to do is bring all the parties to the table to come up with models for how we can meet these broader societal goals of incentivizing efficiency and delivering cleaner, more reliable power while also making sure that the economics are structured so that consumers are protected and utilities can adequately recover their fixed costs,” said Kelly Speakes-Backman, senior vice president at the Alliance. “It’s a bit of a puzzle that people have been wrestling with for years, but there are some great ideas out there for how we can be smarter about how we’re consuming and paying for electricity. Particularly with all the innovation going on with smart meters, timed appliances and other new technologies, we felt it was time to bring everyone together and try to find some consensus for moving forward in today’s regulatory environment. I think we have the right people at the table, at the right time, to begin to solve this puzzle.”

The group’s work, aimed for completion next summer, passed a key threshold when the initial companies – including Exelon, Ingersoll Rand, Johnson Controls, Lockheed Martin, National Grid, Pacific Gas & Electric, Schneider Electric, Southern Company, Washington Gas and Whirlpool – agreed on core principles guiding the work. The principles can be found here.

For example, Alliant Energy has outlined carbon-neutral electricity plans projected to save billions for ratepayers.

In the coming months, the initiative’s participants will grow to include regulatory experts, consumer advocates and other industry leaders and advocates to continue building consensus and develop more specific recommendations. By next summer, the Alliance hopes to develop four rate design templates that utility regulators across the country could use as guides in setting rates.

Founded in 1977, the Alliance to Save Energy is the leading energy efficiency coalition in the nation – a nonprofit, bipartisan alliance of business, government, environmental and consumer leaders advocating for enhanced energy efficiency across all sectors of the economy. 

 

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Opinion: Would we use Site C's electricity?

Site C Dam Electricity Demand underscores B.C.'s decarbonization path, enabling electrification of EVs, heat pumps, and industry, aligning with BC Hydro forecasts and 2030/2050 GHG targets to supply dependable, renewable baseload power.

 

Key Points

Projected clean power tied to Site C, driven by B.C. electrification to meet 2030 and 2050 greenhouse gas targets.

✅ Aligns with 25-30% by 2030 and 55-70% by 2050 GHG cuts

✅ Supports EVs, heat pumps, and industrial electrification

✅ Provides dependable baseload alongside efficiency gains

 

There are valid reasons not to build the Site C dam. There are also valid reasons to build it. One of the latter is the rapid increase in clean electricity needed to reduce B.C.’s greenhouse gas emissions from burning natural gas, gasoline, diesel and other harmful fossil fuel products.

Although former Premier Christy Clark casually avoided near-term emissions targets, Prime Minister Justin Trudeau has set Canadian targets for both 2030 and 2050, and cleaning up Canada's electricity is critical to meeting them. Studies by my research group at Simon Fraser University and other independent analysts show that B.C.’s cost-effective contribution to these national targets requires us to reduce our emissions 25 to 30 per cent by 2030 and 55 to 70 per cent by 2050 — an energy evolution involving, among other things, a much greater use of electricity in buildings, vehicles and industry.

Recent submissions to the Site C hearing have offered widely different estimates of B.C.’s electricity demand in the decade after the project’s completion in 2025, some arguing the dam’s output will be completely surplus to domestic need for years and perhaps decades, even though improved B.C.-Alberta grid links could help balance regional demand. Some of this variation in demand forecasts is understandable. Industrial demand is especially difficult to predict, dependent as it is on global economic conditions and shifting trade relations. And there are legitimate uncertainties about B.C. Hydro’s ability to reduce electricity demand by promoting efficient products and behaviour through its Power Smart program. But some of the forecasts appear to be deliberate exaggerations, designed to support fixed positions for or against Site C.

Our university-based research team models the energy system changes required to meet national and provincial emissions targets, and we have been comparing estimates of the electricity demand implications. These estimates are produced by academics, as well as by key institutions like B.C. Hydro, the National Energy Board, and the governments of Canada and B.C.

Most electricity forecasts for B.C., including the most recent by B.C. Hydro, do not assume that B.C. reduces its greenhouse gas emissions by 25 to 30 per cent by 2030 and 55 to 70 per cent by 2050. When we adjust Hydro’s forecast for just the low end of these targets, we find that in its latest, August 30, submission to the Site C hearing, which followed the premier’s over-budget go-ahead on the project, Hydro has underestimated the demand for its electricity by about three terawatt-hours in 2025, four in 2030 and 10 in 2035. Hydro’s forecast indicates that it will need the five terawatt-hours from Site C. Our research shows that even if Hydro’s demand forecast is too high, appropriate climate policy nationally and in B.C. will absorb all the electricity the dam can produce soon after its completion.

B.C. Hydro does not forecast electricity demand to 2050. But, studies by us and others show that B.C. electricity demand will be almost double today’s levels if we are to reduce emissions by 55 to 70 per cent, even amid a documented risk of missing the 2050 target, in just over three decades while our population, economy, buildings and equipment grow significantly. Most mid- and small-sized vehicles will be electric. Most buildings will be well insulated and heated by electric resistance or electric heat-pumps, either individually or via district heating systems. And many low temperature industrial applications will be electric.

Aggressive efforts to promote energy efficiency will make an important contribution, such that energy demand will not grow nearly as fast as the economy. But it is delusional to think that humans will stop using energy. Even climate policy scenarios in which we assume unprecedented success with energy efficiency show dramatic increases in the consumption of electricity, this being the most favoured zero-emission form of energy as a replacement for planet-destroying gasoline and natural gas.

The completion of the Site C dam is a complicated and challenging societal choice, and delay-related cost risks highlighted by the premier underscore the stakes. There is unbiased evidence and argument supporting either completion or cancellation. But let’s stick to the unbiased evidence. In the case of our 2030 and 2050 greenhouse gas reduction targets, such evidence shows that we must substantially increase our generation of dependable electricity. If the Site C dam is built, and if we are true to our climate goals, all its electricity will be used in B.C. soon after completion.

Mark Jaccard is a professor of sustainable energy in the School of Resource and Environmental Management at Simon Fraser University.

 

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Coal CEO blasts federal agency's decision on power grid

FERC Rejects Trump Coal Plan, denying subsidies for coal-fired and nuclear plants as energy policy shifts toward natural gas and renewables, citing no grid reliability threat and warning about electricity prices and market impacts.

 

Key Points

FERC unanimously rejected subsidies for coal and nuclear plants, finding no grid reliability risk from retirements.

✅ Unanimous FERC vote rejects coal and nuclear compensation

✅ Cites no threat to grid reliability from plant retirements

✅ Opponents warned subsidies would distort power markets and prices

 

A decision by an independent energy agency to reject the Trump administration’s electricity pricing plan to bolster the coal industry could lead to more closures of coal-fired power plants and the loss of thousands of jobs, a top coal executive said Tuesday.

Robert Murray, CEO of Ohio-based Murray Energy Corp., called the action by the Federal Energy Regulatory Commission “a bureaucratic cop-out” that will raise the cost of electricity and jeopardize the reliability and security of the nation’s electric grid.

“While FERC commissioners sit on their hands and refuse to take the action directed by Energy Secretary Rick Perry and President Donald Trump, the decommissioning of more coal-fired and nuclear plants could result, further jeopardizing the reliability, resiliency and security of America’s electric power grids,” Murray said. “It will also raise the cost of electricity for all Americans.”

The five-member energy commission voted unanimously Monday to reject Trump’s plan to reward nuclear and coal-fired power plants for adding reliability to the nation’s power grid. The plan would have made the plants eligible for billions of dollars in government subsidies and help reverse a tide of bankruptcies and loss of market share suffered by the once-dominant coal industry as utilities' shift to natural gas and renewable energy continues.

The Republican-controlled commission said there’s no evidence that any past or planned retirements of coal-fired power plants pose a threat to reliability of the nation’s electric grid.

Murray disputed that and said the recent cold snap that hit the East Coast showed coal’s value, as power users in the Southeast were asked to cut back on electricity usage because of a shortage of natural gas. “If it were not for the electricity generated by our nation’s coal-fired and nuclear power plants, we would be experiencing massive brownouts risk and blackouts in this country,” he said.

Murray Energy is the largest privately owned coal company in the United States, with mining operations in Ohio, Illinois, Kentucky, Utah and West Virginia. Robert Murray, a Trump friend and political supporter, has been pushing hard for federal assistance for his industry. The Associated Press reported last year that Murray asked the Trump administration to issue an emergency order protecting coal-fired power plants from closing. Murray warned that failure to act could cause thousands of coal miners to be laid off and force his largest customer, Ohio-based FirstEnergy Solutions, into bankruptcy.

Perry ultimately rejected Murray’s request, but later asked energy regulators to boost coal and nuclear plants as the administration moved to replace the Clean Power Plan with a more limited approach.

The plan drew widespread opposition from business and environmental groups that frequently disagree with each other, even as some coal and business interests backed the EPA's Affordable Clean Energy rule in court.

Jack Gerard, president and CEO of the American Petroleum Institute, said Tuesday that the Trump plan was “far too narrow” in its focus on power sources that maintain a 90-day fuel supply.

API, the largest lobbying group for oil and gas industry, supports coal and other energy sources, Gerard said, “but we should not put our eggs in an individual basket defined as a 90-day fuel supply (while) unnecessarily intervening in private markets.”

 

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California just made more clean energy than it needed

CAISO Net Negative Emissions signal moments when greenhouse gas intensity of serving ISO demand drops below zero, driven by high renewable generation, low load, strong solar exports, and imports accounting in the California grid.

 

Key Points

Moments when CAISO's CO2 to serve demand is below zero, driven by renewables, exports, and import accounting.

✅ Calculated using imports and exports to serve ISO demand

✅ Occur during high solar output, low weekend load

✅ Coincide with curtailment and record renewable penetration

 

We’re a long way from the land of milk and honey, but on Easter Sunday – for about an hour – we got a taste.

On Sunday, at 1:55 PM Pacific Time the California Independent Systems Operator (CAISO) reported that greenhouse gas emissions necessary to serve its demand (~80% of California’s electricity demand on an annual basis), was measured at a rate -16 metric tons of CO2 per hour. Five minutes later, the value was -2 mTCO2/h, before it crept back up to 40 mTCO2/h at 2:05 PM PST. At 2:10 PST though it fell back to -86 mTCO2/h and stayed negative until 3:05 PM PST, even as global CO2 emissions flatlined in 2019 according to the IEA.

This information was brought to the attention of pv magazine via tweet from eagle eye Jon Pa after CAISO’s site first noted the negative values:

The region was still generating CO2 though, as natural gas, biogas, biomass, geothermal and even coal plants were running and pumping out emissions, even as potent greenhouse gases declined in the US under control efforts. CAISO’s Greenhouse Gas Emission Tracking Methodology, December 28, 2016 (pdf) notes the below calculations to create the value what it terms, “Total GHG emissions to serve ISO demand”:

Of importance to note is that to get to the net negative value, CAISO considered all electricity imports and exports, a reminder that climate policy shapes grid operations across North America. And as can be noted in the image below the CO2 intensity of imports during the day rapidly declined as the sun came up, first going negative around 9:05 AM PST, and mostly staying so until just before 6 PM PST.

During this same weekend, other records were noted (reiterating that we’re in record setting season and as the state pursues its 100% carbon-free mandate now in law) such as a new electricity export record of greater than 2 GW and total renewable electricity as part of total demand at greater than 70%.

At the peak negative moment of 2:15 PM PST, -112 mTCO2/h seen below, the total amount of clean instantaneous generation being used in the power grid region was 17 GW, a far cry from heat-driven reliability strains like rolling blackout warnings that arise during extreme demand, with renewables giving 76% of the total, hydro 14%, nuclear 13% and imports of -12% countering the CO2 coming from just over 1.4 GW of gas generation.

Also of importance are a few layers of nuance in the electricity demand charts. First off we’re in the shoulder seasons  of California – nice cool weather before the warmth of summer drives air conditioning demand. Additional the weekend electricity demand is always lower, as well, Easter Sunday might have had an affect, whereas in colder regions Calgary’s electricity use can soar during frigid snaps.

Lastly to note was the amount of electricity from solar and wind generation being curtailed. And while the Sunday numbers weren’t available yet, the below image noted Saturday with 10 GWh in total being curtailed (pdf) – peaking at over 3.2 GW of instantaneous mostly solar power even as solar is now the cheapest electricity according to the IEA, in the hours of 2 and 3 PM PST. On an annualized basis, less than 2% of total potential solar electricity was curtailed in 2018.

 

 

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Russia to Ban Bitcoin Mining Amid Electricity Deficit

Russia Bitcoin Mining Ban highlights electricity deficits, grid stability concerns, and sustainability challenges, prompting stricter cryptocurrency regulation as mining operations in Siberia face shutdowns, relocations, and renewed focus on energy efficiency and resource allocation.

 

Key Points

Policy halting Bitcoin mining in key regions to ease electricity deficits, stabilize the grid, and prioritize energy.

✅ Targets high-load regions like Siberia facing electricity deficits

✅ Protects residential and industrial energy security, limits outages

✅ Prompts miner relocations, regulation, and potential renewables

 

In a significant shift in its stance on cryptocurrency, Russia has announced plans to ban Bitcoin mining in several key regions, primarily due to rising electricity deficits. This move highlights the ongoing tensions between energy management and the growing demand for cryptocurrency mining, which has sparked a robust debate about sustainability and resource allocation in the country.

Background on Bitcoin Mining in Russia

Russia has long been a major player in the global cryptocurrency landscape, particularly in Bitcoin mining. The country’s vast and diverse geography offers ample opportunities for mining, with several regions boasting low electricity costs and cooler climates that are conducive to operating the high-powered computers used for mining, similar to Iceland's mining boom in cold regions.

However, the boom in mining activities has put a strain on local electricity grids, as seen with BC Hydro suspensions in Canada, particularly as demand for energy continues to rise. This situation has become increasingly untenable, leading government officials to reconsider the viability of allowing large-scale mining operations.

Reasons for the Ban

The decision to ban Bitcoin mining in certain regions stems from a growing electricity deficit that has been exacerbated by both rising temperatures and increased energy consumption. Reports indicate that some regions are struggling to meet domestic energy needs, and jurisdictions like Manitoba's pause on crypto connections reflect similar grid concerns, particularly during peak consumption periods. Officials have expressed concern that continuing to support cryptocurrency mining could lead to blackouts and further strain on the electrical infrastructure.

Additionally, this ban is seen as a measure to redirect energy resources toward more critical sectors, including residential heating and industrial needs. By curbing Bitcoin mining, the government aims to prioritize the energy security of its citizens and maintain stability within its energy markets and the wider global electricity market dynamics.

Regional Impact

The regions targeted by the ban include areas that have seen a significant influx of mining operations, often attracted by the low costs of electricity. For instance, Siberia, known for its abundant natural resources and inexpensive power, has become a major center for miners. The ban is likely to have profound implications for local economies that have come to rely on the influx of investments from cryptocurrency companies.

Many miners are expected to be affected financially as they may have to halt operations or relocate to regions with more favorable regulations. This could lead to job losses and a decline in local business activities that have sprung up around the mining industry, such as hardware suppliers and tech services.

Broader Implications for Cryptocurrency in Russia

This ban reflects a broader trend within Russia’s approach to cryptocurrencies. While the government has been cautious about outright banning digital currencies, it has simultaneously sought to regulate the industry more stringently. Recent legislation has aimed to establish a legal framework for cryptocurrencies, focusing on taxation and oversight while navigating the balance between innovation and regulation.

As other countries around the world grapple with the implications of cryptocurrency mining, Russia’s decision adds to the narrative of the challenges associated with energy consumption in this sector. The international community is increasingly aware of the environmental impact of Bitcoin mining, which has come under fire for its significant energy use and carbon footprint.

Future of Mining in Russia

Looking ahead, the future of Bitcoin mining in Russia remains uncertain. While some regions may implement strict bans, others could potentially embrace a more regulated approach to mining, provided it aligns with energy availability and environmental considerations. The country’s vast landscape offers opportunities for innovative solutions, such as utilizing renewable energy sources, even as India's solar growth slows amid rising coal generation, to power mining operations.

As global attitudes toward cryptocurrency evolve, Russia will likely continue to adapt its policies in response to both domestic energy needs and international pressures, including Europe's shift away from Russian energy that influence policy choices. The balance between fostering a competitive cryptocurrency market and ensuring energy sustainability will be a key challenge for Russian policymakers moving forward.

Russia’s decision to ban Bitcoin mining in key regions marks a pivotal moment in the intersection of cryptocurrency and energy management. As the nation navigates its energy deficits, the implications for the mining industry and the broader cryptocurrency landscape will be significant. This move not only underscores the need for responsible energy consumption in the digital age but also reflects the complexities of integrating emerging technologies within existing frameworks of governance and infrastructure. As the situation unfolds, all eyes will be on how Russia balances innovation with sustainability in its approach to cryptocurrency.

 

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Energy Efficiency and Demand Response Can Nearly Level Southeast Electricity Demand for More than a Decade

Southeast Electricity Demand Forecast examines how energy efficiency, photovoltaics, electric vehicles, heat pumps, and demand response shape grid needs, stabilize load through 2030, shift peaks, and inform utility planning across the region.

 

Key Points

An outlook of load shaped by efficiency, solar, EVs, with demand response keeping usage steady through 2030.

✅ Stabilizes regional demand through 2030 under accelerated adoption

✅ Energy efficiency and demand response are primary levers

✅ EVs and heat pumps drive growth post 2030; shift winter peaks

 

Electricity markets in the Southeast are facing many changes on the customer side of the meter. In a new report released today, we look at how energy efficiency, photovoltaics (solar electricity), electric vehicles, heat pumps, and demand response (shifting loads from periods of high demand) might affect electricity needs in the Southeast.

We find that if all of these resources are pursued on an accelerated basis, electricity demand in the region can be stabilized until about 2030.

After that, demand will likely grow in the following decade because of increased market penetration of electric vehicles and heat pumps, but energy planners will have time to deal with this growth if these projections are borne out. We also find that energy efficiency and demand response can be vital for managing electricity supply and demand in the region and that these resources can help contain energy demand growth, reducing the impact of expensive new generation on consumer wallets.

 

National trends

This is the second ACEEE report looking at regional electricity demand. In 2016, we published a study on electricity consumption in New England, finding an even more pronounced effect. For New England, with even more aggressive pursuit of energy efficiency and these other resources, consumption was projected to decline through about 2030, before rebounding in the following decade.

These regional trends fit into a broader national pattern. In the United States, electricity consumption has been characterized by flat electricity demand for the past decade. Increased energy efficiency efforts have contributed to this lack of consumption growth, even as the US economy has grown since the Great Recession. Recently, the US Energy Information Administration (EIA – a branch of the US Department of Energy) released data on US electricity consumption in 2016, finding that 2016 consumption was 0.3% below 2015 consumption, and other analysts reported a 1% slide in 2023 on milder weather.

 

Five scenarios for the Southeast

ACEEE’s new study focuses on the Southeast because it is very different from New England, with warmer weather, more economic growth, and less-aggressive energy efficiency and distributed energy policies than the Northeast. For the Southeast, we examined five scenarios: a business-as-usual scenario; two alternative scenarios with progressively higher levels of energy efficiency, photovoltaics informed by a solar strategy for the South that is emerging regionally, electric vehicles, heat pumps, and demand response; and two scenarios combining high numbers of electric vehicles and heat pumps with more modest levels of the other resources. This figure presents electricity demand for each of these scenarios:

Over the 2016-2040 period, we project that average annual growth will range from 0.1% to 1.0%, depending on the scenario, much slower than historic growth in the region. Energy efficiency is generally the biggest contributor to changes in projected 2040 electricity consumption relative to the business-as-usual scenario, as shown in the figure below, which presents our accelerated scenario that is based on levels of energy efficiency and other resources now targeted by leading states and utilities in the Southeast.

To date, Entergy Arkansas has achieved the annual efficiency savings as a percent of sales shown in the accelerated scenario and Progress Energy (a division of Duke Energy) has nearly achieved those savings in both North and South Carolina. Sixteen states outside the Southeast have also achieved these savings statewide.

The efficiency savings shown in the aggressive scenario have been proposed by the Arkansas PSC. This level of savings has already been achieved by Arizona as well as six other states. Likewise, the demand response savings we model have been achieved by more than 10 utilities, including four in the Southeast. The levels of photovoltaic, electric vehicle, and heat pump penetration are more speculative and are subject to significant uncertainty.

We also examined trends in summer and winter peak demand. Most utilities in the Southeast have historically had peak demand in the summer, often seeing heatwave-driven surges that stress operations across the Eastern U.S., but our analysis shows that winter peaks will be more likely in the region as photovoltaics and demand response reduce summer peaks and heat pumps increase winter peaks.

 

Why it’s vital to plan broadly

Our analysis illustrates the importance of incorporating energy efficiency, demand response, and photovoltaics into utility planning forecasts as utility trends to watch continue to evolve. Failing to include these resources leads to much higher forecasts, resulting in excess utility system investments, unnecessarily increasing customer electricity rates. Our analysis also illustrates the importance of including electric vehicles and heat pumps in long-term forecasts. While these technologies will have moderate impacts over the next 10 years, they could become increasingly important in the long run.

We are entering a dynamic period of substantial uncertainty for long-term electricity sales and system peaks, highlighted by COVID-19 demand shifts that upended typical patterns. We need to carefully observe and analyze developments in energy efficiency, photovoltaics, electric vehicles, heat pumps, and demand response over the next few years. As these technologies advance, we can create policies to reduce energy bills, system costs, and harmful emissions, drawing on grid reliability strategies tested in Texas, while growing the Southeast’s economy. Resource planners should be sure to incorporate these emerging trends and policies into their long-term forecasts and planning.

 

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A Snapshot of the US Market for Smart Solar Inverters

Smart solar inverters anchor DER communications and control, meeting IEEE 1547 and California Rule 21 for volt/VAR, reactive power, and ride-through, expanding hosting capacity and enabling grid services via secure real-time telemetry and commands.

 

Key Points

Smart solar inverters use IEEE 1547, volt/VAR and reactive power to stabilize circuits and integrate DER safely.

✅ Meet IEEE 1547, Rule 21 ride-through and volt/VAR functions

✅ Support reactive power to manage voltage and hosting capacity

✅ Enable utility communications, telemetry, and grid services

 

Advanced solar inverters could be one of the biggest distributed energy resource communications and control points out there someday. With California now requiring at least early-stage “smart” capabilities from all new solar projects — and a standards road map for next-stage efforts like real-time communications and active controls — this future now has a template.

There are still a lot of unanswered questions about how smart inverters will be used.

That was the consensus at Intersolar this week, where experts discussed the latest developments on the U.S. smart solar inverter front. After years of pilot projects, multi-stakeholder technical working groups, and slow and steady standards development, solar smart inverters are finally starting to hit the market en masse — even if it’s not yet clear just what will be done with them once they’re installed.

“From the technical perspective, the standards are firm,” Roger Salas, distribution engineering manager for Southern California Edison, said. In September of last year, his utility started requiring that all new solar installations come with “Phase 1" advanced inverter functionality, as defined under the state’s Rule 21.

Later this month, it’s going to start requiring “reactive power priority” for these inverters, and in February 2019, it’s going to start requiring that inverters support the communications capabilities described in “Phase 2,” as well as some more advanced “Phase 3” capabilities.

 

Increasing hosting capacity: A win-win for solar and utilities

Each of these phases aligns with a different value proposition for smart inverters. The first phase is largely preventative, aimed at solving the kinds of problems that have forced costly upgrades to how inverters operate in solar-heavy Germany and Hawaii.

The key standard in question in the U.S. is IEEE 1547, which sets the rules for what grid-connected DERs must do to stay safe, such as trip offline when the grid goes down, or avoid overloading local transformers or circuits.

The old version of the standard, however, had a lot of restrictive rules on tripping off during relatively common voltage excursions, which could cause real problems on circuits with a lot of solar dropping off all at once.

Phase 1 implementation of IEEE 1547 is all about removing these barriers, Salas said. “They need to be stable, they need to be connected, they need to be able to support the grid.”

This should increase hosting capacity on circuits that would have otherwise been constrained by these unwelcome behaviors, he said.

 

Reactive power: Where utility and solar imperatives collide

The old versions of IEEE 1547 also didn’t provide rules for how inverters could use one of their more flexible capabilities: the ability to inject or absorb reactive power to mitigate voltage fluctuations, including those that may be caused by the PV itself. The new version opens up this capability, which could allow for an active application of reactive power to further increase hosting capacity, as well as solve other grid edge challenges for utilities.

But where utilities see opportunity, the solar industry sees a threat. Every unit of reactive power comes at the cost of a reduction in the real power output of solar inverters — and almost every solar installation out there is paid based on the real power it produces.

“If you’re tasked to do things that rob your energy sales, that will reduce compensation,” noted Ric O'Connell, executive director of the Oakland, Calif.-based GridLab. “And a lot of systems have third-party owners — the Sunruns, the Teslas — with growing Powerwall fleets — that have contracts, performance guarantees, and they want to get those financed. It’s harder to do that if there’s uncertainty in the future with curtailment."

“That’s the bottleneck right now,” said Daniel Munoz-Alvarez, a GTM Research grid edge analyst. “As we develop markets on the retail end for ...volt/VAR control to be compensated on the grid edge and that is compensated back to the customer, then the customer will be more willing to allow the utility to control their smart inverters or to allow some automation.”

But first, he said, “We need some agreed-upon functions.”

 

The future: Communications, controls and DER integration

The next stage of smart inverter functionality is establishing communications with the utility. After that, utilities will be able use them to monitor key DER data, or issue disconnect and reconnect commands in emergencies, as well as actively orchestrate other utility devices and systems through emerging virtual power plant strategies across their service areas.

This last area is where Salas sees the greatest opportunity to putting mass-market smart solar inverters to use. “If you want to maximize the DERs and what they can do, the need information from the grid. And DERs provide operational and capability information to the utility.”

Inverter makers have already been forced by California to enable the latest IEEE 1547 capabilities into their existing controls systems — but they are clearly embracing the role that their devices can play on the grid as well. Microinverter maker Enphase leveraged its work in Hawaii into a grid services business, seeking to provide data to utilities where they already had a significant number of installations. While Enphase has since scaled back dramatically, its main rival SolarEdge has taken up the same challenge, launching its own grid services arm earlier this summer.

Inverters have been technically capable of doing most of these things for a long time. But utilities and regulators have been waiting for the completion of IEEE 1547 to move forward decisively. Patrick Dalton, senior engineer for Xcel Energy, said his company’s utilities in Colorado and Minnesota are still several years away from mandating advanced inverter capabilities and are waiting for California’s energy transition example in order to choose a path forward.

In the meantime, it’s possible that Xcel's front-of-meter volt/VAR optimization investments in Colorado, including grid edge devices from startup Varentec, could solve many of the issues that have been addressed by smart inverter efforts in Hawaii and California, he noted.

The broader landscape for rolling out smart inverters for solar installations hasn’t changed much, with Hawaii and California still out ahead of the pack, while territories such as Puerto Rico microgrid rules evolve to support resilience. Arizona is the next most important state, with a high penetration of distributed solar, a contentious policy climate surrounding its proper treatment in future years, and a big smart inverter pilot from utility Arizona Public Service to inform stakeholders.

All told, eight separate smart inverter pilots are underway across eight states at present, according to GTM Research: Pacific Gas & Electric and San Diego Gas & Electric in California; APS and Salt River Project in Arizona; Hawaiian Electric in Hawaii; Duke Energy in North Carolina; Con Edison in New York; and a three-state pilot funded by the Department of Energy’s SunShot program and led by the Electric Power Research Institute.

 

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