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Now is the Time to Embrace ‘Virtual Power Plants’: Here’s Why

February 22, 2024

VPP Diagram

The energy transition is one of the most complex undertakings in human history, but one thing is clear — the grid of the future will be cleaner, more decentralized and more flexible.

This vision has been coming into focus for several years now, as price declines and unprecedented public and private investment in solar, storage, electric vehicles and other distributed energy resources have enabled exponential adoption curves. And most signs suggest that the trajectory will continue.

This will entail a monumental change in the physicality of the grid and how customers interact with it. More and more customers generate or store more of their energy instead of buying it from the grid. Also, utilities and grid operators must balance increasing demand growth, even as extreme weather events become more frequent.

Leading the Charge for VPPs

CPower has prepared for this moment since its start in 2014. Founded with a focus on legacy demand response, CPower has always sat at the intersection of customers and the grid. As the use and capabilities of DERs have expanded over time, our leadership in demand response has made us a trusted resource for helping customers, utilities and grid operators navigate the new opportunities that DERs provide.

Our more recent emphasis on virtual power plants may come off as a pivot but it’s just a matter of semantics. The industry itself hasn’t coalesced around the term “VPP” until recently and even now some debate remains around how VPPs are defined.

However, there is a clear throughline from the demand response programs that CPower has always offered to VPPs, which are aggregations of DERs that provide grid services via coordinated dispatch. Regardless of how you define VPPs, CPower has been a leader in the space since long before the industry widely adopted the term. We have been aggregating customer assets and dispatching them to help the grid for years.

The importance of our position between energy users and the grid has grown alongside the increasing adoption of DERs. We aim to distill the mind-boggling complexity of the grid and energy markets so that everyone from facility managers to asset portfolio managers can recognize the full potential of their DERs through a VPP.

The growing embrace of the VPP — both the term and the concept — makes that work easier. This embrace is exemplified by the Department of Energy’s push to triple VPP deployments by 2030, which dovetailed with the launch of industry coalitions like the VP3 partnership.

Helping Customers Help the Grid

We also felt it was important for CPower to go all-in on VPPs because — given our primary focus on commercial and industrial energy users — we’re in a good position to paint an accurate picture of their potential. For instance, many think of them only in terms of residential assets, but commercial and industrial DERs are the heavy hitters in terms of benefits that VPPs can provide to the grid — both now and into the future.

As a longstanding leader in the evolving VPP industry, we are well-poised to help turn the potential of VPPs into reality. We are helping regulatory stakeholders understand how to fit VPPs into existing regulatory models, leveraging AI to make hourly DER optimization across multiple markets and programs a breeze and demonstrating the impact of VPPs in maintaining reliability when it matters most.

We have also convened industry stakeholders to tackle the top issues and trends in VPPs and the energy transition, including leaders from the DOE, DER providers and commercial and industrial energy users. In doing so, we have paved the way for a better tomorrow by turning knowledge into action.

As one of the first companies to monetize DERs — and with more than a decade of experience aggregating and managing customer assets — CPower is the connective tissue that our energy system needs to scale VPPs and realize our clean energy and reliability goals.

Every day, in everything we do, we enable the larger, more decentralized and more flexible grid of the future. The vision is increasingly clear — and VPPs are bringing it into focus.

 

Michael Smith

Michael Smith is a visionary and innovative leader who brings more than 25 years of leadership experience in the energy industry to CPower as its CEO. Michael joined CPower from ForeFront Power, where he was the CEO of the company’s North American solar and energy storage business, responsible for strategy and all business areas across the U.S. and Mexico.

Prior, Michael served as Senior Vice President, Distributed Energy, at Constellation, the retail energy subsidiary of Exelon Corp., where he was responsible for Constellation’s distributed solar, energy efficiency, and energy asset operations businesses across the U.S. He also served as Vice President, Innovation and Strategy Development, for Exelon Generation, and led Constellation Technology Ventures, Exelon’s venture investing organization. Earlier, Michael was Vice President and Assistant General Counsel for Enron Energy Services and a trial lawyer at Bricker & Eckler, LLP.

Super Bowl Offers Lesson on Grid Flexibility

February 09, 2024

Super Bowl

The Super Bowl has been described in many ways, primarily according to one’s opinion of the National Football League’s annual championship game.

Grand. Spectacular. Hyped. Excessive.

And, just when you think you have heard them all, we humbly add another description. At CPower, we see the Super Bowl as: “A lesson in the electric grid’s need for championship-defense-like flexibility, and the supportive might of the Customer-Powered Grid®.” Rolls right off the tongue, doesn’t it?

All joking aside, Super Bowl Sunday is a microcosm of macro energy trends. That is: Our power grid needs more flexibility to balance supply and demand, and customer-sided resources, aggregated into Virtual Power Plants (VPPs) can help.

Customers drive electricity demand.

In recent years, PJM, the nation’s largest grid operator, has published blog posts detailing the ebbs and flows of electricity demand on Super Bowl Sunday and PJM’s management of those shifts. Its most recent post about how the Super Bowl plays into electricity use notes, “ On the day of the Super Bowl and every day, PJM is constantly forecasting customers’ needs. After weather and historical usage comparisons, human behavior is the biggest factor in this equation.”

PJM goes on to explain that “like any other Sunday in February,” electricity usage gradually increases as people begin the day before plateauing at lunchtime. Demand ramps up again in the late afternoon as people finish chores and cooking before the game, then dips after the game starts.

Although the game is regularly one of the most watched TV events, it also is “mostly about collective watching,” Popular Science noted in an article about how we may not use more electricity than usual on Super Bowl Sunday.

So, while you may think that electricity would surge during the game as more people tune in, in fact, it drops as friends and family gather to watch the game together and—glued to their couches and barstools–keep their refrigerators shut and other more energy-intensive devices off. Think more people around fewer TVs.

Enter grid flexibility.

Grid flexibility critical for handling variability in demand.

Analyses of Super Bowl Sunday and electricity demand have found somewhat predictable patterns like those that PJM points to, with enough variability to keep grid operators on their toes. This combination of predictable and unpredictable variability in power use underscores why flexibility is only becoming more critical to support how we work and play.

Flexibility refers to the grid’s ability to maintain balance in uncertain conditions through rapid adjustments in supply and demand, as in unexpected, extreme weather that may force power plants offline or more-predictable behavioral changes—like the daily commute, or a big football game.

These rapid changes are challenging because if power supply and demand are unequal, the resulting imbalance could cause brownouts or blackouts. Or, put more simply: the lights go off.

Super Bowl Sunday or not, balancing the grid is increasingly hard because electric demand—from EVs, new industrial and computing loads and heat pumps—is expected to rapidly rise, just as aging, primarily fossil fuel plants are reaching their end-of-life and being replaced by intermittent renewable supply like wind and solar. Grid operators need flexible resources that can ramp up quickly to meet these changing needs.

Grid flexibility will continue to come in several forms; but distributed, demand-side solutions—dubbed DERs (distributed energy resources) and VPPs—are key to a smooth energy transition. In aggregating customer DERs and dispatching them together, VPPs offer a path to a clean, flexible and dependable energy future.

That future is not necessarily far off either. One could imagine that the variability of customer needs on Superbowl Sunday could soon be further balanced and smoothed by DERs like smart appliances and EVs that take a timeout for the busy pre-game prep, but run the hurry-up during the grid’s in-game lull— invisibly optimizing grid use to deliver more reliable, more affordable and clean energy for all.

As the nation’s largest DER monetization and VPP operator, CPower is creating the Customer-Powered Grid® that will enable a flexible, clean and dependable energy future. Call us at 844-276-9371 or visit CPowerEnergy.com/contact to learn how we can help you most effectively invest in DERs and participate in VPPs to support sustainability, improve grid reliability and increase energy resiliency.

 

Mathew Sachs
Senior Vice President, Strategy & Business Development

Over the last 15 years, Mathew has developed a proven track record of building cleantech businesses through investment, partnership, and organic sales growth. He served with National Grid Ventures as Vice President for Distributed Energy, and has led originations for KRoad DG, a private equity platform focused on energy; Yingli Green Energy as Vice President, Corporate Development; Vice President, Sales & Commercial Operations; and Director, Business Development. Mathew graduated With Distinction from Cornell University’s Johnson Graduate School of Management Master of Business Administration. He graduated Magna Cum Laude from SUNY Buffalo with a B.S. in Mechanical Engineering

 

VPPs: GridFuture Turns Knowledge into Action

February 06, 2024



Energy industry stakeholders recently convened at CPower’s GridFuture conference to pave the way for a better tomorrow for generations to come.

Path-blazing customers and partners, government officials and executives from companies accelerating the trajectory of the energy transition explored ways to create a clean, flexible and dependable energy future with distributed energy resources and virtual power plants.

“Our goal with this event is to serve as a catalyst for progress, fostering an environment where ideas converge, partnerships are forged and knowledge is turned into action. As far as the energy transition is concerned, collaboration will be the driving force behind success,” CPower CEO Michael Smith said in opening remarks at the MGM National Harbor just outside of Washington, D.C. on Jan 23.

GridFuture participants collaborated across a mix of meetings, panel discussions and presentations over two days. Here are three key takeaways.

1. The grid needs flexibility.

Merely responding to grid disruption is no longer sufficient because our existing grid infrastructure will not carry us into a clean energy future, warned a panel of industry CEOs.

The grid needs more flexibility to balance supply and demand as traditional “peaking” generators retire, renewable generation DERs increase, load from artificial intelligence technology soars, electrification expands and extreme weather events multiply.

Additionally, an estimated 1,250 GW of “unbuilt” clean energy is tied up in regulatory queues awaiting approval to be connected to the grid, which is an amount of capacity roughly equivalent to every generator currently in operation.

What’s more, when electricity demand on the grid is high, utilities and grid operators turn on peaker plants to meet demand. These centralized generators rely on large, remotely located power plants connected by transmission lines that may be susceptible to disruptions from extreme weather, cybersecurity and equipment issues. Therefore, they may not be available during peak times.

Ultimately, LS Power CEO Paul Segal said, “Our grid has become less reliable exactly when we need it to be more reliable than ever.”

2. VPPs provide grid flexibility.

Jen Downing
Credit: Jon Armstrong
U.S. Department of Energy Loan Programs Office Engagement Officer Jen Downing discusses the future of VPPs.

In aggregating customer DERs and dispatching them together, VPPs offer fast, reliable and affordable ways to balance the grid. “[VPP] technology is a solution that is real today and that will redefine how we generate, distribute, and consume electricity. The benefits to energy users, our communities and our planet will only be more enhanced as we continue in scale,” Smith said.

Smith likened the potential of VPPs to the values of networks in telecommunications. According to Metcalfe’s Law, a network grows more valuable as its connections increase, Smith noted.

“The number of DERs that could be used in VPPs is projected to grow by 15 times over between now and 2035. This will create tremendous value and opportunity both for the grid and energy users,” Smith said.

Tripling current VPP scale by 2030 could address 10-20% of peak load nationally while saving $10 billion per year in grid spending, said Jen Downing, E at the U.S. Department of Energy (DOE) Loan Programs Office, who detailed the value and opportunity that VPPs presents in a keynote address at GridFuture.

Pulling from the DOE’s Pathways to Commercial Liftoff for Virtual Power Plants report, Downing explained how VPPs provide resource adequacy at a low cost while building, reducing emissions, alleviating transmission and distribution congestion and empowering communities.

3. Customers balance the grid through VPPs.

Customer Flexibility Panel
Credit: Jon Armstrong
Quinn Laudenslager of Energy Toolbase, left, and Metal Technolgies’ Nick Heiny shared examples of how their companies help the grid.

Large energy users with DERs enrolled in VPPs, such as commercial and industrial customers, know that they can help the grid by flexing their loads as needed.

“Flexibility can be minimally disruptive, like participating in a synchronized reserves program, or a major disruption like an emergency demand response event,” said Nick Heiny, vice president of Administration and General Counsel for Metal Technologies, an Indiana-based metal casting company with five foundries and two machining centers in the US and Mexico.

Heiny joined Quinn Laudenslager, vice president of Product for Energy Toolbase, for a CPower customer panel discussing what “flexibility” means on the demand-side and how energy users can use their flexible DERs to address resilience, reliability, sustainability or other business goals.

“There’s always a balance between operating and curtailment, and large energy users need to be mindful of their loads,” Heiny said. Thus, Metal Technologies uses CPower’s EnerWise® Site Optimization to maximize grid revenue and on-bill savings while minimizing disruptions.

“Flexibility also lowers our effective cost per kWh, which allows us to compete with overseas competitors that are adding significant amounts of inexpensive coal generation,” Heiny said.

The communities that surround Metal Technologies’ plants view the company as a good neighbor as well. Commercial and industrial energy users like Metal Technologies reduce carbon emissions when they curtail their loads, Heiny noted. Therefore, they can help their communities while benefiting financially.

Recognizing their contributions to decarbonization, grid flexibility and industry innovations, CPower honored Metal Technologies, Energy Toolbase and other customers and partners at its Customer-Powered Grid® Awards during GridFuture.

Check The Current again soon for more from the Customer-Powered Grid Awards and additional recaps and videos from GridFuture.

Join us on the journey to the Customer-Powered Grid—and the flexible, clean and dependable energy future that it will enable. Call us at 844-276-9371 or visit CPowerEnergy.com/contact to learn how we can help you most effectively invest in DERs and participate in VPPs to support sustainability, improve grid reliability and increase energy resiliency.

 

Glenn Bogarde
Since becoming CPower’s Senior Vice President of Sales, Marketing and Customer Experience, Glenn has led the company’s sales team on a nationwide mission to help customers get the most from their DER monetization participation. Glenn brings to CPower more than 20 years of sales experience in the enterprise software and energy industries.

CPower Writes ‘Big Checks’ to Education Customers in Texas

February 05, 2024

Two large Texas energy users recently shared how much revenue they have earned for improving grid reliability. In separate public events, CPower recently presented San Jacinto College and the Houston Independent School District (HISD) with more than $160,000 in demand response revenue.

“HISD and San Jacinto College exemplify how schools and educational institutions of all levels can make money while keeping the lights on for their communities by reducing loads when demand peaks on the grid,” said James Vasquez, Account Executive, Texas, for CPower.

Both customers participate in Texas grid services programs available through the state’s grid operator, Electric Reliability Council of Texas (ERCOT). HISD and San Jacinto College’s most recent earnings came from ERCOT’s Emergency Response Services (ESR) program, which pays customers for being available to curtail their electricity loads within 10 or 30 minutes.

 

San Jacinto College

SJC Check Presentation
CPower Account Executive James Vasquez, far left, presents a “big check” to representatives of San Jacinto College.

San Jacinto College received a “big check” for $48,000 for the ERS 2023 Summer Season. The college has five campuses in metropolitan Houston and has earned a total of $434,000 since it enrolled in demand response in February 2016.

The college began working with CPower in late 2022, after a turnover in key facility personnel, Vasquez said. At the time, the college was enrolled for 400 kW between two buildings. After several discussions, including a site visit by a CPower engineer, the college increased its demand response participation by 2,600 kW across nine more buildings.

Depending on the season, San Jacinto College now has 2-3 MW enrolled in demand response. Currently, it is enrolled in the ERS Winter Season (December 2023-March 2024) with a projected revenue payout of $75,000.

 

Houston Independent School District

HISD Check Presentation
From left: Stephanie Walker, HISD; Jeffrey Norman, CPower; Kirby Williams, HISD; and James Vasquez, CPower

CPower presented Houston Independent School District with a “big check” for $114,753, which reflected its combined earnings from enrollment in CenterPoint Energy and ERS Summer Season (June-September) demand response programs. “We were told that this check represented the salaries for two teachers—plus more,” Vasquez said.

With more than 189,934 students and 274 schools across 333 square miles within greater Houston, HISD is the largest public school system in Texas and the eighth largest in the nation. Fourteen percent of the district’s buildings are enrolled in ERS.

HISD has been paid approximately $200,000 since it started participating in demand response in October 2021. It is projected to receive another $44,000 in revenue for the ERS Winter Season that ends in March.

 

HISD and San Jacinto College are just two examples of large Texas energy users benefiting from helping the grid while ensuring the comfort and safety of their students and faculty. In addition to the ERS program, ERCOT offers a mix of other grid services opportunities for commercial, industrial and institutional customers in Texas, including different ways to reduce energy charges and earn revenue.

If you would like to learn more about how your Texas organization could save money, get paid and help the grid, visit our Texas demand response page.

ChatGPT on Optimizing DERs: What It Got Right and What We Would Add

January 04, 2024

AI

Contrary to what it may seem, artificial intelligence has not taken over the world, or at least not yet. But you can be excused for believing that AI is in control given the buzz surrounding the technology’s rapidly expanding reach into everything, everywhere – and the world of energy is no exception.

Curious as to how AI views the optimization of distributed energy resources, we asked ChatGPT how AI can be used to optimize DERs. Although ChatGPT summarized available information nicely, the popular, AI-powered natural language processing tool stopped short of telling an energy user how they can optimize their DERs and how they would benefit.

Here are four ways that AI can optimize DERs, according to ChatGPT, along with CPower’s comments on each.

1) Optimizing DERs for Demand Response

ChatGPT says: AI can analyze energy consumption patterns and predict demand fluctuations. By considering factors like weather, time of day and user preferences, AI algorithms can optimize the timing and magnitude of energy generation and storage to match demand. This helps balance supply and demand, reducing peak loads and optimizing the utilization of DERs.

CPower adds: Flexible DERs are ideal for balancing supply and demand and avoiding blackouts or brownouts because they can provide a range of valuable grid services. AI can help customers optimize participation in demand response programs for the good of their organization and the grid. For example, in working across multiple DERs, customer sites and DR programs in real-time, CPower’s EnerWise® Site Optimization helps energy users make money, reduce costs or both by providing grid services that improve reliability.

2) Forecasting Energy

ChatGPT says: AI can leverage historical data, weather patterns and other relevant information to accurately predict future energy generation and consumption. This enables proactive planning and scheduling of DERs, allowing for better integration with the grid and avoiding potential imbalances.

CPower adds: Given that the grid often struggles to maintain balance through challenges, like extreme weather or unexpected changes in supply or demand, AI’s ability to forecast accurately is vital in enabling the fast and flexible grid that we need to power the clean energy transition. Real-time insight into demand is increasingly critical as intermittent renewable generation resources, like solar and wind, account for an ever-larger percentage of the nation’s power mix.

3) Allocating Resources

ChatGPT says: AI can optimize the allocation of energy resources in a distributed network. By considering factors like energy prices, load profiles and system constraints, AI algorithms can determine the most efficient distribution of energy generation, storage and consumption across DERs. This leads to better utilization of available resources and reduces energy waste.

CPower adds: The ability to quickly dispatch DERs in response to shifts in supply or demand is essential to keeping the grid balanced. EnerWise helps maintain balance by automatically allocating each asset at a site to available programs on an hourly basis within the constraints of the hardware or associated permitting/ incentive structures.

4) Participating in Energy Markets and Trading

ChatGPT says: AI can facilitate the participation of DER owners in energy markets. By analyzing market conditions, price signals and regulatory requirements, AI algorithms can guide decision-making for optimal energy trading. This enables DER owners to sell excess energy back to the grid or participate in peer-to-peer energy trading platforms, maximizing their economic benefits.

CPower adds: Combining technology with human know-how remains essential to fully unlocking the value of DERs. For example, while EnerWise efficiently enables DER participation across all available on-bill cost avoidance options and grid services programs, CPower’s experts mitigate revenue complexity and minimize risk for customers by managing changes in more than 60 solutions nationwide, including automated DR solutions.

Looking ahead, ChatGPT noted that optimizing DERs with AI enhances their efficiency, reliability and sustainability while unlocking the full potential of renewable energy sources. At CPower, we would add that we are enabling a flexible, clean and dependable energy future by forming the nation’s largest virtual power plant. In aggregating 6.4 GW of flexible DER capacity across more than 24,000 customer sites, we are helping to create the Customer-Powered Grid™ that will smooth the energy transition while helping energy users earn the most value from their resources.

If you would like to learn more about EnerWise or other ways to optimize your energy assets, call us at 844-276-9371 or visit CPowerEnergy.com/contact to find out how we can help you create and implement a DER strategy that works.

 

Kyle Harbaugh

Senior VP | Technology

Kyle is a results-driven leader with a track record of delivering high-value products that increase revenue, improve organizational productivity and create large-scale cost savings. A motivated executive who desires to lead fast-paced teams through the creative and challenging process of bringing products to life, from whiteboard to launch.

As Senior Vice President at CPower, he is responsible for Information Technology and Product Management. Previously, he held several technology leadership positions at Constellation Energy. He is also an AEE Certified Energy Manager (CEM) and an AEE Certified Demand Side Management professional (CDSM).

Rising Capacity Prices Boosting Demand Response Earnings in New York

December 19, 2023

NYISO SCR ICAP Prices

Surging capacity prices present swelling opportunities for commercial, industrial and institutional energy consumers willing to shed load in New York.

With prices up 300% since 2019, participants in the New York Independent System Operator (NYISO)’s Special Case Resources (SCR) Program can earn revenue while reducing costs—without compromising their operations. Customers can also further boost their financial benefits by capitalizing on demand response programs through the state’s utilities, thereby maximizing revenue streams to lower costs.

Seizing the opportunities available begins with enrolling in the SCR Program. Customers who enroll by the end of the month could begin participating as soon as February and earn three months of revenue in the Winter SCR Program, which spans from November to April. The Summer SCR Program will last from May to October.

Program prices typically average $4 per KW in winter and $6 per KW in summer. At Multiple Intervenors Annual Meeting in October, CPower shared how some industrial customers earn $46,000 per MW of curtailable load for two hours of annual curtailment in SCR.

Customers earn passive revenue in SCR for 10 months out of the year just by being ready to help the grid. Except for a one-hour Summer test commitment in August and a one-hour Winter test commitment in February, customers have not been asked to curtail loads for any grid emergencies in recent years.

Additionally, there are several demand response programs available to C&Is in New York through local utilities, such as the Commercial System Relief Program (CSRP) and Distribution Load Relief Program (DLRP). Customers can reap more revenue by using the same curtailment practices to participate in more than one program because SCR, CSRP and DLRP can be combined, or “stacked.”

The value of demand response programs will likely continue to rise as well. The same factors that have driven prices up in recent years should remain contributors, such as the retirement of electricity-generating power plants amidst increasing demand for electricity due to the electrification of heating and transportation.

Prices will rise further if demand outpaces supply, which can cause brownouts or blackouts. For example, NYISO has warned that a possible 446 MW shortfall threatens grid reliability in New York City for Summer 2025.

If an energy consumer would like to support grid reliability while earning revenue, CPower can project how much revenue a customer could earn through demand response programs based on market conditions. Beginning with the SCR program, the longest-running demand response program in New York, CPower can estimate earnings for any combination of SCR, CSRP and DLRP participation.

If you would like more information, please contact me at 860-371-5518 or at keith.black@cpowerenergy.com.


Keith Black

As CPower’s Regional Vice President and General Manager for the Northeast, Keith has leveraged his unique combination of sales and operations expertise, energy business relationship development, channel development, sales opportunity identification and solutions management, backed by his intrinsic talent for building winning business strategies, to help the company and its customers achieve strong and sustainable financial gains.

In leading CPower’s business and growth strategy for New England and New York, he has helped expand New England’s leading edge of solar, storage, and residential monetization and captured market share in all aspects of the evolving DER landscape in New York. Succeeding in these exciting and cutting-edge DER opportunities has come with a complex array of technologies, controls and partner integrations, as well as a demanding and high touch for his team.

A versatile, high-energy executive, he has extensive experience in leading high-performing teams, at businesses from Fortune 500 organizations through start-ups, and guiding companies to profitable growth. With more than 30 years of experience in the energy industry, he has become a trusted energy advisor to both prospects and customers, enabling them to reduce risk, lower costs and use renewable resources when possible.

New Report Validates DERs and VPPs are Key to Smooth Energy Transition

October 24, 2023

Customer-Powered Grid White Paper

The steadily declining costs of solar, wind, batteries, EVs and other key technologies—borne by market forces and big policy initiatives like the Inflation Reduction Act—seem all but certain to transform America’s energy system from one primarily reliant on oil and gas to one that is increasingly electrified and renewable—a process often referred to as the energy transition.

To make this energy transition a smooth one, policymakers are increasingly clamoring for grid flexibility: resources that can quickly respond to rapidly changing conditions to keep the grid in balance. Grid flexibility will continue to come in several forms; but distributed, demand-side solutions—dubbed DERs (distributed energy resources) and VPPs (virtual power plants)—are gathering more and more interest, from town halls and statehouses all the way up to the White House.

And believe it or not, if you are a demand response participant, you are a valuable component of the nation’s fleet of DERs and VPPs.

In a new whitepaper, Mathew Sachs, CPower’s Senior Vice President of Strategic Planning and Business Development, and I break down what is driving this growing need for grid flexibility; what all these new terms mean (in plain English) and how they relate to more-familiar concepts like demand response, capacity and energy; and why this creates significant long-term opportunity for energy users in what  we call the Customer-Powered Grid™.

We aimed to keep this short whitepaper informative, constructive to the latest research and policy work, and with your ‘so what?’ in mind. Ultimately, we wrote it to start a conversation with you.

The energy transition is already in motion, but the smoothness or rockiness of this massive shift—compounded by an aging grid and extreme weather—is an open question. It’s a question that CPower wants to work on with customers, policymakers, grid operators, utilities and other key stakeholders to resolve for our common safety and prosperity.

We hope you’ll give the whitepaper a read, and reach out at vpps@cpowerenergymanagment.com with thoughts, comments and questions.

Read our full whitepaper to learn more: Creating the Customer-Powered Grid™: Enabling the Energy Transition with Distributed Energy Resources and Virtual Power Plant.


Ben Pickard

Ben Pickard manages strategic M&A and new growth initiatives for CPower as its Vice President of Corporate Development. Prior, Ben was a Director at National Grid, where he developed and executed strategic applications of venture-backed technology to some of the utility company’s most challenging problems; as well as non-regulated distributed energy investments and partnerships including with EnerNOC, Enbala and Sunrun, and scaled entry into renewable project development via Geronimo Energy.

Earlier roles include infrastructure principal investing with the Macquarie Group, urban climate policy with the Clinton Foundation and distributed energy business creation spanning lighting retrofits, rooftop solar, energy storage, and backup generation. His market and policy analysis on electric utilities has appeared in Greentech Media and the New York Times. Ben is based in New York City and earned an AB magna cum laude in Social Studies from Harvard.

The Booming Potential of Virtual Power Plants

October 05, 2023

VPP

A recent Bloomberg opinion piece contrasted the massive growth in distributed energy resources (DERs), such as rooftop solar and electric vehicles, with sluggish deployment of other clean energy solutions, such as wind power and transmission upgrades, as the world races to reach net zero emissions. While the author was spot on in many respects, the piece failed to account for the role that Virtual Power Plants (VPPs) can play in augmenting the ability of DERs to support the entire grid, and how utility mindsets are shifting.

VPPs aggregate and coordinate distributed energy assets like flexible load assets, rooftop solar, stationary batteries and electric vehicle chargers. This turns these DERs into a reliable block of flexible capacity that can support a variety of grid needs. With VPPs we can harness the rapid expansion of DERs for the benefit of all and continue driving greater decarbonization and energy reliability while we work through longer timelines for other necessary pieces of the new energy economy.

Furthermore, VPPs provide grid benefits at a far lower cost than alternatives. A study released earlier this year found that the net cost to a utility of providing resource adequacy from a VPP is roughly 40% to 60% of the cost of alternatives, which translates into a 60 GW VPP deployment meeting future resource adequacy needs while saving $15 billion to $35 billion.

There is growing public and private support for VPPs. Recently, the day before the opinion piece was published, the U.S. Department of Energy released its Pathways for Commercial Liftoff report for VPPs. The report found that tripling the current scale of VPPs to 80-160 GW by 2030 could expand the U.S. grid’s capacity to reliably support rapid electrification while reducing overall grid costs by $10 billion per year. Not only that, but there are up to $100 Billion in loans available to support VPP deployment.

Utilities can’t afford to ignore these cost savings, and are highly motivated to gain better visibility and control of DERs to maintain the stability of the grid. Therefore, we have many reasons to be optimistic about the rapid growth in VPPs over the next decade. Any forward-looking energy system analysis that doesn’t include VPPs is incomplete.

VPPs can increase the impact of DERs and buy precious time for technologies like wind generation and transmission upgrades to progress. VPPs won’t solve the climate crisis alone, but they are a promising tool to accelerate the clean energy transition. With their flexible capacity, they can bridge the gap created by the sluggish deployment of technologies such as wind power by leveraging existing resources until large-scale renewables can fully deliver.


Michael Smith

Michael Smith is a visionary and innovative leader who brings more than 25 years leadership experience in the energy industry to CPower as its CEO. Michael joined CPower from ForeFront Power, where he was the CEO of the company’s North American solar and energy storage business, responsible for strategy and all business areas across the U.S. and Mexico.

Prior, Michael served as Senior Vice President, Distributed Energy, at Constellation, the retail energy subsidiary of Exelon Corp., where he was responsible for Constellation’s distributed solar, energy efficiency, and energy asset operations businesses across the U.S. He also served as Vice President, Innovation and Strategy Development, for Exelon Generation, and led Constellation Technology Ventures, Exelon’s venture investing organization. Earlier, Michael was Vice President and Assistant General Counsel for Enron Energy Services and a trial lawyer at Bricker & Eckler, LLP.

Possible 446 MW Shortfall Threatens Grid Reliability in NYC for Summer 2025

September 19, 2023

Demand Response
Photo Credit: New York Independent System Operator

A summer like this year’s could be trouble for New York City in 2025.

Earth’s hottest summer on record lingered into early September in the Big Apple, as the city posted its first official heatwave of the year with three consecutive days of high temperatures exceeding 90 degrees Fahrenheit.

Should the summer two years hence also be especially hot, New York City could grapple with blackouts or brownouts. The New York Independent System Operator (NYISO) has projected a deficit of as much as 446 MW on the peak day during expected weather conditions (95 degrees Fahrenheit).

The baseline summer coincident peak demand forecast for New York City (Zone J) in 2025 increased by 294 MW in the past year, primarily due to the increasing electrification of transportation and buildings, NYISO noted, in identifying a “reliability need” in its Q2 Short-Term Assessment of Reliability (STAR).

Also, NYISO noted, as of May 1, 2023, 1,027 MW of affected peak generation plants have deactivated or limited their operations under the New York State Department of Environmental Conservation’s (DEC’s) “Peaker Rule,” which provides for a phased reduction in emission limits, in 2023 and 2025, during the ozone season (May 1-September 30). An additional 590 MW of peakers are expected to become unavailable for summer 2025, all of which are in New York City, thereby resulting in a total unavailability of 1,617 MW of peaker generation capability.

In terms of possible relief, the DEC regulations include a provision to allow an affected generator to continue to operate for up to two years, with a possible further two-year extension, after the compliance deadline if the generator is designated by the NYISO or by the local transmission owner as needed to resolve a reliability need until a permanent solution is in place. So, at least some of the peaker generation capacity that is currently expected to be unavailable could instead remain available through a two-year extension, and an additional two years thereafter if an additional extension were granted, thus perhaps mitigating the near-term reliability need for New York City.

Also, “The New York City transmission security margin is expected to improve in 2026 if the Champlain Hudson Power Express (CHPE) connection from Hydro Quebec to New York City enters service on schedule in spring 2026, but the margin gradually erodes through time thereafter as expected demand for electricity grows,” according to NYISO’s STAR report.

Looking beyond 2025, NYISO warned that the forecasted reliability margins within New York City may not be sufficient if the opening of the CHPE, which will deliver 1,250 MW of renewable power into the New York metro area, is significantly delayed. Reliability margins also may not be sufficient if additional power plants become unavailable or demand significantly exceeds current forecasts, NYISO noted.

“Without the CHPE project in service or other offsetting changes or solutions, the reliability margins continue to be deficient for the ten-year planning horizon. In addition, while CHPE is expected to contribute to reliability in the summer, the facility is not expected to provide any capacity in the winter,” according to NYISO.

In the meantime, Con Edison, as the Responsible Transmission Owner, is solely responsible for developing a regulated solution to the near-term reliability need that NYISO has identified for summer 2025. NYISO has also solicited market-based solutions.

Per NYISO: “If proposed regulated or market-based solutions are not viable or sufficient to meet the identified reliability need, interim solutions must be in place to keep the grid reliable. One potential outcome could include relying on generators that are subject to the DEC’s Peaker Rule to remain in operation until a permanent solution is in place.”

A reliability need could also drive up capacity prices for New York City in summer 2025, if the possible conditions that NYISO has warned could be created by a combination of escalating demand and the retirement of generators come to fruition.

As this is an emerging and evolving situation, CPower will follow it closely. If you have immediate questions or would like information in the meantime, please contact us online or at 844-276-9371.


Keith Black

As CPower’s Regional Vice President and General Manager for the Northeast, Keith has leveraged his unique combination of sales and operations expertise, energy business relationship development, channel development, sales opportunity identification and solutions management, backed by his intrinsic talent for building winning business strategies, to help the company and its customers achieve strong and sustainable financial gains.

In leading CPower’s business and growth strategy for New England and New York, he has helped in expanding New England’s leading edge of solar, storage, and residential monetization and capturing market share in all aspects of the evolving DER landscape in New York. Succeeding in these exciting and cutting-edge DER opportunities has come with a complex array of technologies, controls and partner integrations, as well as a demanding and high touch for his team.

A versatile, high-energy executive, he has extensive experience in leading high-performing teams, at businesses from Fortune 500 organizations through start-ups, and guiding companies to profitable growth. With more than 30 years of experience in the energy industry, he has become a trusted energy advisor to both prospects and customers, enabling them to reduce risk, lower costs and use renewable resources when possible.

Report: Demand response is critical to enabling the energy transition and ensuring a reliable grid

September 11, 2023

Demand Response

Recently released research shows that mounting reliability risks make demand response (DR) increasingly important as the grid transforms. An aging grid dominated by solar and wind power, battered by storms and fires and struggling to supply new needs like EVs and electric heat pumps, needs the flexibility that DR provides.

“Paradigms for the generation and delivery of electricity are evolving away from a centralized network with predictable power flows toward a distributed and dynamic grid, creating many challenges and opportunities for utilities and other entities involved in the electricity value chain,” according to a new report about grid reliability challenges published by Wood Mackenzie and CPower. “At the heart of these changes is how reliability is assured when the grid is most stressed, like when customer demand peaks during heat waves, natural disasters or extreme weather events.”

Based on insights from analysts at Wood Mackenzie, the report shows that DR programs have proven to be an important resource for ensuring reliability amidst grid challenges in the past, but that such support may not always be available. Analysts explain how low capacity pricing and cumbersome rules on DR participation threaten the future of DR programs and the ability to use distributed energy resources (DERs) to help the grid.

If energy users were to stop participating in DR, analysts note, utilities and grid operators would lose their most reliable resource during emergencies as well as a resource that can provide much-needed flexibility year-round.

Such year-round flexibility is imperative because the proliferation of intermittent renewable resources, the retirement of fossil-fuel generators, and the electrification of vehicles, heating and other key energy needs are straining the grid, making it difficult to balance supply and demand.

“As the grid’s needs continue to evolve, particularly with the growth of other types of distributed energy resources (DERs) besides DR, such as solar generation, battery storage, and electric vehicles, DR is an increasingly important part of the resource stack in energy markets,” according to the report from Wood Mackenzie and CPower.

The North American Reliability Corp. recently issued a similar warning about the importance of flexibility in mitigating risks to grid reliability.

“System operators and planners should ensure that sufficiently flexible ramping/balancing capacity is available to meet the needs of changing patterns of variability and new characteristics of system performance. In future decades, growing storage and demand-side flexibility may help mitigate the concerns for flexibility and attention will turn to multi-day energy concerns, but intraday flexibility remains important during this transition,” according to NERC’s 2023 Electric Reliability Organization (ERO) Reliability Risks Priorities Report.

Today’s tech-enabled DR can play a key role in energy, ancillary services and other flexibility markets. But policymakers must eliminate barriers like unsustainably low pricing and unworkable administrative complexities to unlock the full flexibility of DERs, according to Wood Mackenzie and CPower’s report. To do so, the paper’s authors suggest market reforms such as revising compensation methods for DR resources, fixing capacity accreditation and introducing a price floor for DR.

If you would like to learn more about the research and recommendations from Wood Mackenzie and CPower, you can download a copy of the report here: Ensuring Grid Reliability with DERs.

 

Kenneth Schisler
Ken leads CPower’s regulatory and government affairs team, having previously served in similar roles at both Vicinity Energy and EnerNOC/Enel. He brings nearly three decades of policy leadership on innovation in clean and advanced energy technologies and collaborates with public officials, regulators, power exchange and system operators, academia and industry peers to unleash the potential of demand-side resources.

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