With all eyes on the California Public Utility Fee’s (CPUC) internet vitality metering (NEM 3) resolution final yr, and the way that call may devalue photo voltaic programs for householders, nationwide photo voltaic installer and repair supplier Sunnova set its sights on a completely completely different distributed vitality framework for California householders.
In September, Sunnova Neighborhood Microgrids California LLC (SCMC) utilized for a Certificates of Public Comfort and Necessity (CPCN) from the CPUC “to assemble and function public utility microgrids” and to “set up charges for service.” Mentioned one other manner: Sunnova established a brand new division, SCMC, to perform within the position of “micro” electrical utility for deliberate new residential developments below 2,000 houses and has sought approval from the CPUC for its proposal.
The plan is for SCMC to work at the side of homebuilders to put in photo voltaic PV and vitality storage programs in each dwelling in a brand new growth, set up extra neighborhood vitality storage and photo voltaic assets (when possible), in addition to backup technology inside the neighborhood, and set up grid infrastructure akin to transformers and substations in order that the entire thing features as a microgrid that may be operated individually from the broader grid. SCMC will service all the gear. Buyer charges and billing shall be dealt with by way of SCMC.
It is a novel strategy by Sunnova, and it may set up a welcome precedent within the state’s electrical utility sector.
“California has publicity to grid instability, excessive prices of energy all through the state, and a requirement for rooftop photo voltaic for brand new builds – so it has a very good setup,” says Adam Miller, VP of microgrids for Sunnova, explaining why California is the best state to debut the SCMC idea.
What’s not preferrred is CPUC code 218, referred to as the “over the fence rule,” that claims an entity that needs to promote energy to a couple of finish consumer must change into {an electrical} company, which is shorthand for a regulated utility. Therefore, the submitting with the CPUC.
The remark interval on the submitting has ended, and the ball is now in CPUC’s courtroom.
Is there precedent?
The remark interval, which lately concluded, drew in protests from investor-owned utilities (IOU), that largely centered on procedural questions and never the feasibility of the idea, though one protestor did declare that the Fee shouldn’t allow one other utility to serve prospects in an space that a big IOU regards as its service territory.
“If that’s the primary concern, we’re able to go very deep on that,” Miller says. “We’ve executed the authorized analysis on new suppliers being allowed into the marketplace for the good thing about shoppers, and we consider that new market entrants will assist result in the advantages of microgrids that the California legislature envisioned in passing microgrid laws again in 2018.”
A “micro utility” will not be new, nevertheless it has up to now been utilized in very restricted circumstances, like the place a neighborhood can’t get energy in any respect. Sunnova additionally factors to different utilities by which current judicial and CPUC precedent permits for brand new suppliers to come back into the market.
“The CPCN is the trail to establishing a utility, and we expect this permits for brand new entrants,” Miller says. “The micro utility strategy proposed by SCMC is extra about eradicating the obstacles for small utilities to pursue microgrids in order that it doesn’t value a 2,000-home neighborhood thousands and thousands of {dollars} to arrange service. . We’re not asking for a brand new rule; we’re asking for permission to make use of what exists.”
Keys to the proposal.
Sunnova is making use of to fund and function neighborhood microgrids the identical manner a utility would, and in some circumstances exceeding what’s commonplace.
“The use case within the utility is a trenched underground distribution community,” Miller explains. “We suggest to pursue environment friendly, however dependable microgrid designs.. For instance a typical neighborhood assemble permits for 1 transformer for as many as 8 homes. However we’re designs that add resiliency with one transformer per each 4 homes, to take care of our promise of getting reliability, in order that if one goes down one other close by may carry the load till it’s serviced.”
Every venture would even have a devoted substation, permitting imports from the transmission system, when needed, though nearly all of the vitality shall be produced by the microgrid. When there’s further vitality that the neighborhood doesn’t want, it could use the connection to the bigger grid to offer that vitality to the marketplace for use by others.
In the meantime, a developer and a microgrid operator purposefully constructing and optimizing a neighborhood to share its vitality assets has inherent benefits. Improvements like sensible meters, communication gadgets and geo fencing are possible when a neighborhood opts to work with a supplier on the outset, and when the main target is strictly smaller in scale.
These communities additionally would have a service stage assure as a part of the settlement with the neighborhood “to make sure we’re doing our job,” Miller says. “If we’re not, we’re placing some type of assure in place till the service stage is again as much as the place it must be. We expect that’s an thrilling worth proposition for homebuilders and client alternative that’s overdue.”
The main focus is absolutely on new developments, the place no service presently exists.
By specializing in new communities, SCMC goals to keep away from any impacts on the present utility programs and prospects. As Ben Schwartz, coverage supervisor with the Clean Coalition, put it in his submitting in favor of the appliance, “As a result of the housing communities shall be newly constructed, there isn’t any current load being transferred away from the distribution grid that might be construed as a lack of gross sales.”
Because the NEM 3 proceedings present, IOUs and the CPUC appear further nervous about transmission and distribution (T&D) prices incurred from including extra distributed photo voltaic and storage property. A brand new neighborhood constructed to fulfill over 80% of its personal wants ought to be a welcome growth as a result of it might require much less extra grid infrastructure to serve the demand.
Proposal feedback
The California Solar and Storage Association (CALSSA) additionally strongly helps the SCMC Software for the way it enhances different CPUC rulemakings. “Integrating the microgrid and electrical infrastructure within the design and new building course of, as proposed, is a really environment friendly and cost-effective solution to deploy and scale these applied sciences,” writes Kate Unger, Senior Coverage Advisor with CALSSA. “It will allow the broader commercialization of microgrids over time, as contemplated by Senate Invoice (SB) 1339 and Rulemaking (R.) 19-09-009, and can permit many extra communities to construct and profit from microgrids.”
Unger continues, “[t]his kind of planning and design for brand new dwelling communities aligns with decarbonization and clear vitality objectives together with in SB 100 and SB 350 in addition to the lately enacted California Local weather Disaster Act, AB 1279 (Muratsuchi), and the Clear Power, Jobs, and Affordability Act of 2022, SB 1020 (Laird). It additionally comports with objectives of the Power Fee’s Title 24 constructing codes to affect buildings to cut back emissions and decarbonize the economic system.”
Schwartz provides that the CPUC’s Microgrids proceeding (R. 19-09-009) that handed 5 years in the past was imagined to result in a swift implementation of SB 1339, , however that has not but been the case for Neighborhood Microgrids, which run into debates regarding how they may connect with the present distribution system.
“New communities, constructed collectively separate from the present distribution system, are a small subset of initiatives which aren’t being thought-about within the Microgrids continuing and don’t elevate the identical set of points as different Neighborhood Microgrids may,” Schwartz writes. Plus, “two quite common questions raised in opposition are how the Neighborhood Microgrid operator shall be liable and the way the Neighborhood Microgrid shall be operated in parallel with the grid. Sunnova’s utility solutions each of those questions; as a micro-utility, the Fee can have regulatory jurisdiction and the Neighborhood Microgrids will solely island as much as the devoted substation (not effecting the remainder of the grid).
Is it possible?
Sunnova labored with engineering agency Black and Veatch to harden the SCMC mannequin, simulate the economics, and analyze shortcomings of the system in worst case eventualities. These fashions present {that a} SCMC neighborhood would produce 80% of the electrical energy it wants frequently with out tapping into the grid or having to make use of backup standby turbines (which could be able to operating 300 hours in case of a wider scale grid outage). California’s grid is blended with about 55% renewable vitality sources.
Black and Veatch estimates about half-hour of outage a yr for the SCMC neighborhood. For an IOU, that determine is nearer to 2 hours a yr on common.
How is that this completely different from different builder communities?
Miller says a differentiator from different neighborhood pilot applications specializing in neighborhood photo voltaic is “the shoppers don’t get full advantage of manufacturing at their dwelling. Photo voltaic is on their roof nevertheless it flows by way of the neighborhood and so they pay for the same amount as if the photo voltaic will not be there. They get sustainability advantages however not the diminished quantity profit {that a} regular nanogrid buyer would anticipate.”
How is that this completely different than a digital energy plant?
Digital energy vegetation (VPPs) are valued for his or her position as a grid asset. In a typical VPP kind situation, a home-owner will get credit for saved vitality that’s used on the grid. The bodily energy flows by way of your complete service space for miles and miles. “It directionally gives resiliency, nevertheless it doesn’t present bodily resiliency in the identical manner,” Miller notes.
Right here, vitality could be restricted to the neighborhood when the microgrid is operated in island mode. In that mode, all vitality generated and saved in the neighborhood is used inside the neighborhood. In each island and related mode, neighbors share their extra vitality with neighbors by way of SCMC, and the vitality that stays in the neighborhood is an enormous a part of what makes your complete idea work.
Miller says Sunnova communities might be aggregated as a grid asset for demand response (and neighborhood income) down the highway, however that’s not a part of the mannequin now.
“Our mannequin is to be house owner centric and to attain a sure stage of resiliency for the client,” Miller says. “The homebuilders we’re working with are targeted on constructing live-work communities, which is a pure match for microgrids.”
How is the speed and buyer relationship structured?
The client’s micro utility invoice is damaged into 4 components.
- The monetary settlement for the microgrid expertise sited on the buyer’s dwelling – the photo voltaic, storage, load management, and EV chargers. The client pays a payment per thirty days for that.
- Charges for the distribution of vitality inside the neighborhood, the microgrid controller, the neighborhood storage and, probably, neighborhood photo voltaic.
- Credit for extra manufacturing. Prospects producing greater than they eat will get a credit score again.
- Prospects who require supplemental energy are assessed a cost based mostly on whether or not that demand is served from neighborhood property or the grid.
“A part of the considering round this utility and taking a progressive however measured step ahead in a neighborhood microgrid is to indicate the CPUC that we’re ready to function the neighborhood microgrid to a utility commonplace,” Miller says. “As we usher in energy from the surface grid, we wouldn’t be marking it up like a deregulated vitality provider. This might be a move by way of like a utility bought energy cost. And similar for the facility flowing inside the neighborhood. Prospects receives a commission for manufacturing and are reimbursing their neighbors by way of SCMC at a good value.”
The extra salient level than apples to apples comparisons of a Sunnova microgrid’s efficiency to grid service below an IOU, is the efficiencies gained by staying micro.
A SCMC-style micro utility has an inherently completely different relationship with its prospects – that of a boutique model with extra responsive customer support versus a bigger company entity with a one-size-fits-millions enterprise mannequin, or perhaps a smaller municipal operator servicing a number of communities.
“Traditionally talking, demand response applications, broadly, are nicely meant however don’t have excessive internet promoter scores,” Miller notes. “There’s a variety of causes for that, however a part of it’s it’s a difficult scenario for a utility.”
Wanting forward
Given these broad goals, Sunnova’s proposal ought to be a welcome innovation.
At this level, Sunnova’s predominant objective is to a minimum of get a listening to. “A listening to will permit this stuff to be unpacked in additional element, which we’d welcome,” Miller says.
Chris Crowell is Editor-in-Chief of Photo voltaic Builder.
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