Energy Independence Problem-Solving: Critical Talking Points for Virtual Power Plants
Policy Principles and Strategies for Conservative Energy Advocates
Wattsmart Program: Utility-Operated VPP with Third-Party Service and DERMS in Utah - the largest (i) utility-controlled (ii) behind-the-meter residential sites VPP in the country today. Today the program allows selected choice of battery brands purchased by customers and provides a combination of purchase incentives and ongoing rebates and bill credits and is also available in Idaho. Read more: VPP Program Details - Wattsmart Utah and my piece on the project under Conservative Principles and Clean Energy.
Developed as a primer and syllabus for State Energy Offices, State Regulatory Commissions, and Advocates in attendance at the National Conservative Energy Network Summit, 2024, Houston, Texas.
Contact via Substack or LinkedIn for workshops and trainings.
Virtual Power Plant - State Advocacy Principles
I. Virtual Power Plant programs must be advocated for in non-partisan terms and examples of these programs from conservative jurisdictions must be widely shared to break myths about their critical role in electrification-driven economic growth, electric ratepayer welfare and states’ energy independence.
II. Given recent data reports about central grid power supply risks from independent reliability organizations like NERC, conservative-leaning states face material risks of the loss of centralized generation and stand to benefit substantially from distributed grid policies.
III. Virtual Power Plant programs are energy security programs, and therefore national security programs.
IV. Distributed energy as a strategic grid security objective is directly analogous to the evolution in the Department of Defense’s strategy to move away from centralized and concentrated intelligence infrastructure to a distributed, dispersed, adaptive, decentralized model in the U.S. and globally and employ self-supply redundancy options at US base installations to reduce reliance on commercially sourced power. Testimony before the House Armed Services Committee in 2019 from the Acting Asst. Secretary of the Navy (Energy, Installations, and Environment) is a fitting narrative of this phenomenon.
V. Whether or not state policy and utility policy moves quickly, people will move quickly to create their own home microgrids with distributed energy. Even mild-weather events, in addition to more severe new weather patterns, are causing longer outages on the distributed poles-and-wires that connect customers to their utility local substations.
VI. Voters seeking energy security and energy independence should be the primary drivers of consensus-building among utility companies and industry partners - all advocates and policy experts in this space must actively connect them with legislative bodies who are non-experts and are hearing staid messages about “utility safety” and “least cost generation planning” without hearing the whole story and understanding what their voters really want and need.
DETAILS AND LINKS
I. Virtual Power Plant programs must be advocated for in non-partisan terms and examples of these programs from conservative jurisdictions must be widely shared to break myths about their critical role in electrification-driven economic growth, electric ratepayer welfare and states’ energy independence. Virtual Power Plant programs have developed in both Red and Blue-leaning states and territories in the U.S. due to (i) presence of force majeure weather conditions, (ii) health & safety risks associated with regular power loss and power grid instability, (iii) economic development goals, and (iv) free market environmental conservation objectives.
Wattsmart Utah, now also available in Idaho, is an incredible story of (iii) and (iv). This is a utility-owned, grid-integrated virtual power plant program delivered under conservationist principles with support from the government of Gov. Gary R. Herbert (R). 17th Governor. More on this story here: Conservative Foundations Lead to Largest Utility-Run Behind-the-Meter Solar-Battery Virtual Power Plant in the US.
In a Rocky Mountain consortium speech in 2019, Gov. Herbert described the 50 states as “laboratories of democracy” piloting solutions for the betterment of the people. That certainly describes the utility’s program - which grew from one multifamily housing project pilot to a statewide and now multistate program incenting residential solar and batteries to provide grid stability to the utility network.
Gov. Herbert also signed into law, a bill to expand Utah’s network of electric vehicle charging stations, a “public-private partnership that establishes Utah as a market-based electric vehicle state and positions Utah as a national leader in clean energy,” per Senate President J. Stuart Adams.
II. Given recent data reports about central grid power supply risks from independent reliability organizations like NERC, conservative-leaning states face material risks of the loss of centralized generation and stand to benefit substantially from distributed grid policies. In 2023 NERC singled out the Midwest (MISO) states and SERC-Central states as “the two highest-risk areas, where power supplies could prove inadequate under normal peak conditions.” Utility Dive. These states are: Montana, North Dakota, South Dakota, Minnesota, Iowa, Wisconsin, Michigan, Indiana, Illinois, Missouri, Kentucky, Arkansas, Mississippi, Louisiana, and part of Texas; all of Tennessee and portions of Alabama, Georgia, Kentucky, Mississippi, Missouri.
III. Virtual Power Plant programs are energy security programs, and therefore national security programs. In several states assessing risks of physical utility substation attacks, compromised physical or cybersecurity natural gas infrastructure attacks (gas infrastructure feeding large gas-powered electric power plants), policymakers have looked to distributed energy resources as a redundancy and crisis management solution. While individual home systems or local community or utility-owned islanded/paralleled microgrids also need serious cybersecurity protection, the spread-out nature of power facilities that are not reliant on a single point of failure like a large generator or a large substation, and do not depend on a singular large system of poles and wires, creates a phenomenal layer of energy security for local governments and states - in addition to heightened personal security for residents. When there are thousands of small targets with small spread effects of infiltration adn resulting damage to software or hardware systems, there is security in the strength of numbers, redundant de minimis impact points of failure, and reduced “pay-off” for cyber or physical hackers. Importantly, remember that home or building connectivity to the highly energize local grid also has a physical, analog disconnect put in place by the local utility services provider. So unintentional injection to the system, potentially caused by a hacking effort on a local cloud or control system impacting multiple customers’ solar or battery inverter, is also limited in spread effects by the disconnect capabilities already in place from the local utility infrastructure installed at the home to prevent reverse power flow in all cases. This is why, for example, home solar shuts down to prevent reverse power flow when a utility service line de-energizes in an outage. [Note: batteries on home solar systems turns them into continuously functioning islands, allowing solar to ride the customer through the outage. More Americans are adding home batteries to existing solar (retrofit) and sizing them to (i) meet solar generation capacity (ii) take advantage of utility time-of-use rates that allow them to store grid-charged power and use it during higher priced hours under those rates, and/or (iii) participate in grid injection programs (Virtual Power Plant). A fantastic solar - battery calculator overview here:
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IV. Distributed energy as a strategic grid security objective is directly analogous to the evolution in the Department of Defense’s strategy to move away from centralized and concentrated intelligence infrastructure to a distributed, dispersed, adaptive, decentralized model in the U.S. and globally and employ self-supply redundancy options at US base installations to reduce reliance on commercially sourced power. Testimony before the House Armed Services Committee in 2019 from the Acting Asst. Secretary of the Navy (Energy, Installations, and Environment) is a fitting narrative of this phenomenon. Acting Asst. Secretary Lucian Niemeyer stated, “Our adversaries also have the ability to strike the large centralized concentrations of forces we have assembled around the world. In response, we are prioritizing the authorities, policies, and resources needed to transition from large, centralized, unhardened infrastructure to smaller, dispersed, resilient, adaptive basing in multiple theaters that includes active and passive defenses.” “We are in the process of prioritizing facility requirements for prepositioned forward fuel, stocks, and munitions, as well as non-commercially dependent distributed logistics and maintenance to ensure logistics sustainment while under persistent multi-domain attack.” His testimony included descriptions of bases that are capable of operating as self-sustaining microgrids and self-supplied, redundant power sources: “Installation resilience depends on innovation and flexibility to use a vast array of fuel resources effectively and efficiently. We are pursuing all types of energy sources and have reached out to local utility service providers and experts in the private sector to collaborate on initiatives to reduce vulnerabilities, add redundancy, or improve energy management.”
V. Whether or not state policy and utility policy moves quickly, people will move quickly to create their own home microgrids with distributed energy. Even mild-weather events, in addition to more severe new weather patterns, are causing longer outages on the distributed poles-and-wires that connect customers to their utility local substations. “Higher numbers of people are experiencing [local grid] outages that are lasting longer than they did in the past.” That is more than enough, to enable a future of distributed grid assets that cannot be networked to support the highest number of grid needs and community needs if states do not move quickly to figure out the VPP programs that best serve the market growth already occurring.
VI. Voters seeking energy security and energy independence should be the primary drivers of consensus-building among utility companies and industry partners - all advocates and policy experts in this space must actively connect them with legislative bodies who are non-experts and are hearing staid messages about “utility safety” and “least cost generation planning” without hearing the whole story and understanding what their voters really want and need. When there are impasses with incumbents, including but not limited to electric utility companies regarding the creation of VPP and distributed energy access-enabling law or policies, advocates for technology-based market solutions must employ the power of voters who live in these electric service areas to reframe the mission statement for these programs. There are many codes, standards, electric service rules, tariffs, market design elements, local AJH permitting practices, all which may need to be changed or improved, or streamlined for consistency, to enable VPP programs. It is unacceptable for any utility engineering group or municipal/city/county permitting entity today to argue that the “status quo” is the only solution, particularly before legislative bodies who do not have the technical know-how or experience to understand the immediate and direct harm of said “status quo.” Pushing forward on policies promoting market access and voter access to distributed devices and VPP program access for their homes and businesses is the only conscionable outcome, but legislators and other non-technical decisionmakers need the public to educate them quite directly.
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Literature Review for State Energy Offices and State Regulatory Practioners and Commissions
— Arushi Sharma Frank