“There is a general consensus that we've got an energy problem coming in Washington State,” Cascadia Renewables co-founder and managing partner Markus Virta said as he started the third session at the 2024 Solar Washington Summit in October.
We are in an incredibly fortunate position in Washington, Markus opined, in that the Columbia River has been a large “battery” system. “The dams provide an incredible source of resilience to this region and outside of this region. But it is terrifying that they're forecasting 44% less snowpack in 2040. What that means is that later into the winter, instead of snow, we're getting rain that is destabilizing hillsides, putting our transmission equipment at risk. Ultimately, it means less generation in late summer from our dams.”
At the same time, there is huge growth in demand for electricity for the first time in decades (PNUCC '24 Regional Forecast). The Forecast anticipates a surge in demand for electricity in the Pacific Northwest over the next decade that surpasses previous projections. The increase is attributed to factors such as data center expansion, high-tech manufacturing growth and the trend toward electrification. Electric utilities across the nation are projecting increases in demand for similar reasons. In addition, nighttime temperatures [in Washington] are staying high, Markus said, and we're not getting cooler evenings. One solution is a heat pump. That leads to a new peak in demand growing in late summer. We're also seeing higher costs of electricity in the middle of the day and into the evening. This trend is emerging in summer months where, historically, demand for electricity in the PNW has been low.
With the combination of a declining snowpack, glaciers shrinking, temperature increases and stream flow peak moving towards the spring, he said, Puget Sound Energy is forecasting a shortfall of about 18,000 gigawatt hours of CETA-compliant generation by 2045. “If you took all of the net metering capacity in PSE territory based on the last report from WSU, and you assume that that net metering is generating around 1100 kilowatt hours, that equals less than 1% of this shortfall.”
While solar has good capacity in the middle of the day and late summer, he said, the reality is that solar isn't a silver bullet. Solar is sharp and brilliant, he said. It's low cost, it's distributed, it's flexible in where it can be installed, but it's intermittent. “There's a misalignment in when it generates and when there's demand. There's a big issue around grid integration.” Markus also noted that there is actually a dual peak of demand. One happens mid-to-late-January, and one is emerging in late summer. Even so, he said, there is value to solar, if we get it right and site it well. “There are pathways to secure energy independence in the state through solar energy. There are pathways to supporting the high needs of our Justice40 communities. "To installers, this is an opportunity and challenge. “We know that solar generation on the west side of the Cascades isn't what it is on the east side. We have to be very intentional about where solar goes, where energy storage goes, and those distributed energy resources.
A meta-analysis in California of incentives and carbon emissions associated with the battery energy storage system showed neutral carbon emissions associated with the batteries installed in California. “We have to think about where we site energy storage, how it's constructed and what job that it does.”
When siting clean energy, Markus said, you must start by listening and hearing communities’ concerns and what they want. The next steps are being able to articulate the limitations of the technology and delivering a holistic design that empowers the needs of the host community.
Markus was involved with a project for the Washington Department of Commerce related to establishing resilience hubs around the state. “We got to work with the Tulalip tribe. They were dreaming of a future where we could network microgrids, behind the meter and create a networked, multi-node microgrid resulting in a resiliency hub in their territory.” Snohomish PUD is supporting the Tulalip Tribe and has been working on similar localized microgrid projects for a while, the Orcas Power and Light Cooperative (OPALCO) has been actively developing microgrids for its members benefit, and PSE is starting on it. When utilities begin to scale networked microgrids they are able to begin the formation of these distributed energy resources into what is known as a virtual power plant (VPP)."
VPPs typically aggregate large numbers of distributed energy resources (DER) such as, but not limited to, photovoltaics. What we're looking at, Markus said, is creating utility systems with communication over all of our energy assets and can actively balance supply and demand via the virtual power plants (VPP). “The VPP is not going to be easy to build, and it's going to take a lot of iteration.”
The Liftoff report from the Department of Energy did well at describing the benefits of the VPP, he observed. ”We can save energy when we electrify, but doing so will require really intelligent systems. What DOE is telling us is that we can use storage and the VPP for a lower net cost and higher net benefit.”
There are some barriers, he observed, especially on storage. Another part of the solution, then, is microgrids.
The United States Department of Energy Microgrid Exchange Group defines a microgrid as ‘‘a group of interconnected loads and distributed energy resources within clearly defined electrical boundaries that acts as a single controllable entity with respect to the grid. A microgrid can connect and disconnect from the grid to enable it to operate in both grid-connected or island-mode.' According to Veckta, Microgrids and VPPs share some key features such as the ability to integrate demand response (DR), generate distributed renewable energy and store energy at the distribution level but there are key differences: 1) Microgrids can connect to the traditional grid or operate independently. VPPs are strictly grid-tied systems. 2) Microgrids are self-contained systems while VPPs are a combination of resources dependent on grid infrastructure. When the grid is down, VPPs can’t deliver power to consumers. 3) Microgrids functionally require some capacity for local storage such as battery systems. VPPs can function with or without the presence of a storage system. 4) Microgrids depend on hardware technologies such as microgrid controllers, smart inverters and switches to function, while VPPs depend primarily on smart meters and information technology. 5) Microgrids consist of a fixed set of resources within a limited geographical area or location, while VPPs can combine a wide variety of resources in large geographic areas, and aggregate them together.
“Whenever we try something new, we have to learn together, and that can create complexity around information. We are helping communities develop and construct microgrids. If it's simple, the first three stages of planning, procurement and construction could take a year. If it's typical, it could take three years. This isn't an easy thing to do.” For microgrids, he said, there are not yet specific siting or zoning standards, so he looks towards the UL 9540A test method and requirements from the National Fire Protection Association (NFPA).
He also said a meta-analysis by the Electric Power Research Institute (EPRI), in coordination with Sandia and the Lawrence Berkeley National Lab, looked at utilities, scale, battery and energy storage systems worldwide. They did a root cause failure analysis to try to determine what is the failure rate and why are they failing. In 2018 there was about a 9% failure rate on large commercial and utility-scale battery systems. Today, Markus said, according to this EPRI meta-analysis, it’s down to around a quarter of a percent. Factors in 2022 and 2023, he said, included an emerging trend of the design, integration, and construction of these systems that was causing failures. “We have a lot of demand for flexibility on our bulk power system. We, as an industry, have gotten pretty good at manufacturing this battery energy storage equipment. Now we need to build it and operate it responsibly.”
There are also workforce challenges, he said. “This is new as an industry, especially for commercial, industrial, and utility-scale storage. We have an opportunity to develop an industry of niche technical ability in Washington that can be exported. What all this means, Markus explained, is that “we need to get this right, whether you're on the utility side, the installer side, or the equity side, we are all in this together. We need to reframe our attitude in this industry. We are no longer competitors. We must now focus on how we can collaborate most effectively together! Rate design is important, but it's not the whole story. We need to think about cost, energy affordability, and the role that innovative systems like VPPs can play in supporting our shared energy system in Washington.”
From a policy perspective, Markus suggested, we need to find a way to target funds from the Climate Commitment Act and our resources from the state into complex, difficult, non-market solvable problems. “We want to spur innovation, establish markets and then let those markets work.”
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