Overheard at TREIA GridNEXT 2018

By Tom Kleckner

Panel Discusses 50% Renewable Energy by 2030 Goal

GEORGETOWN, Texas — The Texas Renewable Energy Industries Alliance’s (TREIA) 2018 GridNEXT Conference attracted a devoted group of renewable energy developers and marketers to a three-day discussion of how renewable technologies in Texas are transforming the “grid of the future.” Attendees participated in panel discussions on building sustainability with renewables, planning for a resilient system and recoverability, and building community engagement.

TREIA board of directors member Ingmar Sterzing, a partner in renewable project developer Skaia Energy, moderated a leadoff panel that looked at the organization’s vision of reaching 50% renewable energy in Texas by 2030. He said the state, which already leads the nation with more than 18% of renewable-generated electricity, can produce enough power from additional wind (15.5 GW), solar (43.3 GW) and storage (550 MW) resources to reach that 50% figure.

ERCOT renewable energy supply 2008 to 2030 |  TREIA

ERCOT renewable energy supply 2008 to 2030 | TREIA

I’m told current plans for batteries already exceed this capacity. These capacity values seem high, but they are in line with recent trends in new wind development,” he said.

Tom “Smitty” Smith | © RTO Insider

Sterzing said regulators and traditional utilities could find themselves subject to “disintermediation” — in which the middleman in a transaction gets cut out of a process — if they don’t adjust quickly to new products and services.

“You figure it takes 10 years to build a coal plant. The old utility moves at that pace because of big, chunky additions that take advantage of centralization and economies of scale,” he said. “The retail consumers are not going to wait around when scarcity presents itself. There are substitute products on the market that are economic, and if we don’t get out in front of it, the consumers are going to do what they’re going to do, without concern for stranded costs or integrated operations. The regulators are going to have to pick it up, or the industry won’t be able to get out in front with integrated products and services that interface with batteries, distributed generation and electric vehicles.”

Tom “Smitty” Smith | ©  RTO Insider

Tom “Smitty” Smith | © RTO Insider

“It’s that process by where we set a vision, then come together to determine the technical problems that keep us from getting there, that has Texas in the lead,” said Tom “Smitty” Smith, a prominent Texas environmental activist and executive director of the Texas Electric Transportation Resources Alliance (TxETRA). “We’ve done well to tie ourselves with the vision of the future. We can move on to other things, because wind is now cool. We have to continue to capitalize on renewables.”

Dean Tuel, global vice president of sales for Younicos, an energy storage company, said economics will be the limiting factor in TREIA’s “50% by 2030” goal.

“It’s always economics. The cost of new technologies are always a challenge in the early phase,” said Tuel, whose company was acquired this month by Aggreko, a provider of mobile and modular power.

“We need to get to where we’re seeing 4- to 5-MW land-based turbines until we get the economics to where they should be,” ATG Energy founder Patrick Woodson said.

“The key is simply getting people to adopt new technologies and move away from their old way of thinking,” Tuel said. “How do you pull them in? Make the economic case.”

Younicos’ Dean Tuel (center) and ATG Energy’s Patrick Woodson listen as Skaia Energy’s Ingmar Sterzing explains TREIA’s 50% by 2030 plan. | ©  RTO Insider

Younicos’ Dean Tuel (center) and ATG Energy’s Patrick Woodson listen as Skaia Energy’s Ingmar Sterzing explains TREIA’s 50% by 2030 plan. | © RTO Insider

AEP Texas cited cost effectiveness in attempting to install two battery storage facilities in West Texas and classify them as distribution assets, the panel noted. The Texas Public Utility Commission rejected the utility’s proposal in January, but it opened a rulemaking to address “non-traditional technologies in electric delivery service” (Project 48023). (See PUC Opens Rulemaking on Distributed Battery Storage.)

Smith said the three-person PUC may be the best commission since Pat Wood III and Judy Walsh were among the vanguard deregulating Texas’ electric industry in the late 1990s. However, Smith said, the commissioners, who have all been appointed since September 2017, “don’t want to issue policy statements” and would prefer to see what develops during the 86th Texas Legislature when it convenes in January.

New energy policy is unlikely, Smith said, with a new House speaker and new chairs on its energy policy-setting committees.

“We’re at a point where not much may happen this session,” he said.

Skaia Energy’s Ingmar Sterzing moderates a panel including (left to right) TxETRA’s Tom “Smitty” Smith, Younicos’ Dean Tuel and ATG Energy’s Patrick Woodson. | © RTO Insider

‘Imminent Grid’: Job Market of the Future?

Ken Donohoo, a director with the Electric Power Engineers consulting firm after 25 years with Oncor, said what he called the “imminent grid” presents a crossroads for the transmission and distribution sector. He said decisions on the grid made today will affect how power is supplied for decades to come.

“The traditional grid is a one-way system. We’re headed to a multi-way system,” said Donohoo, pointing to distributed energy resources, two-way power flows, block chain and other new technologies changing the market dynamics.

“It isn’t just the power systems anymore,” he said. “It’s the communications; it’s the control. It’s the Internet.”

Electric Power Engineers’ Ken Donohoo address TREIA attendees. | © RTO Insider

Donohoo described the imminent grid as being digitized, with remote control, self-regulation and a heavy emphasis on sensors collecting data.

“T&D planning must change and adapt. It’s full employment for planning engineers. If you have a son or a daughter, send them to [learn] planning and call me when they graduate,” he said.

“The decisions we make today will affect how power is supplied for decades. Whatever we are going to build today, we are going to have to live with it for the next 25 years. We have to understand what the future is bringing, and not blindly go with everyday reactions to what is cost-effective today.”

Cities Have Strategies to Meet Renewable Energy Goals

Representatives from host Georgetown and other Texas municipalities said their early investments in renewable energy have paid off — Georgetown officially reached 100% renewable power in July, while Austin is on track to meet its goal of 55% renewable energy by 2025.

Under a new “flexible path” strategy, San Antonio plans to generate about half of its power from renewable energy sources by 2040. Wind and solar energy currently account for about 22% of the city’s power.

“Our flexible path strategy is to make strategic decisions, but on a smaller scale,” said John Bonnin, vice president of energy supply and market operations for the city’s CPS Energy. “We want to plot a course that results in rates affordable for our community but avoid making multibillion-dollar mistakes.”

Bonnin said the strategy has already resulted in retiring 800 MW of coal-fired generation, with another 1.6 GW to come offline before 2026.

“Over the next several years, we have to develop and get consensus around a step-by-step approach to meeting customers’ needs 10 years from now, and meeting their needs in an acceptable way,” he said. “The flexible path is going to have to be just that, to satisfy all the affordability and sustainability criteria we have. We can shore up capacity with solar and wind. There will definitely be cheap power for sale over the next few years.”

City of Georgetown’s Jim Briggs makes a point as Austin Energy’s Khalil Shalabi takes it in. | © RTO Insider

“Georgetown has been a benefactor of the market, but when you start hearing about 800-MW, 600-MW drops in capacity, it begins to make you feel a little nervous,” said Jim Briggs, general manager of the city’s utility. “Will we be able to get new strategies into the market fast enough to make up the difference? In looking at batteries and distributed generation, the costs are moving targets.”

Khalil Shalabi, vice president of strategy, technology and markets for Austin Energy, said the city will be retiring the “lion’s share” of its thermal generation between 2020 and 2023. That means the utility will need DER, DG, storage and other “new tools” to pick up the slack.

“We can’t run [steam generation] forever,” Shalabi said. “It’s a problem, but it’s also exciting for us to deal with.”

Renewable Development Getting High Marks from Communities

Speaking on a panel discussing community-engagement strategies and lessons learned, Duke Energy’s Scott Macmurdo said the corporate renewable energy market is “going gangbusters,” pointing to a near doubling of last year’s 2.7 GW in deals because of consumer preferences.

“Companies are being held to account for what happens in their supply chains,” Macmurdo said. “Companies are taking ownership, and that’s one of the main drivers behind corporate renewable energy purchasing. The consumers care more and more about where they are sourcing these electrons. It matters with community engagement, because corporations are more sensitive about these issues.”

AWEA’s Susan Sloan | © RTO Insider

Susan Sloan, vice president of state affairs for the American Wind Energy Association, said consumer preference is one reason wind energy is still getting a favorable reaction in the state.

“We’re at a point now where we’re ready to start building again,” Sloan said, noting 5 GW of wind energy is currently under construction in Texas. “People are still interested in seeing more wind and using more wind. They’ve seen wind as a good neighbor and partner with oil and gas. It’s good for the economy; it’s good for the environment.”

Jeff Risley, chief strategy officer for Oklahoma-based consultancy Saxum, said whereas the industry generally receives strong community support, organized opposition has become more prevalent.

“There are organized players in this industry attempting to derail what’s happening with renewables. There’s lots of money behind them,” he said. “We deal with this all the time in Oklahoma. You have to combat those messages with the positives … about solar and wind development.

“We’re in the community, talking to people,” Risley said. “Then it’s figure out if they’re pro, con or in the middle. The middles are the ones we’re looking for.”