The financial mechanisms are bringing investors to renewables and distributed energy as utilities, co-ops and munis move away from uneconomic legacy assets.
Hundreds of billions of dollars in untapped new money can finance the U.S. power system’s transition away from legacy fossil assets to renewables and distributed generation.
Utilities like Duke Energy and Xcel Energy have issued billions in green bonds to fund renewables development. Green banks in New York, Connecticut and other states are backing investments in distributed resources and energy efficiency. It appears much more institutional money wants in on the green opportunity.
“Green bonds are a capital-raising mechanism that a wide range of institutions could use to raise capital,” Coalition for Green Capital Executive Director Jeff Schub told Utility Dive. “A green bank is an institution [capitalized by public funds] that invests capital in clean energy projects. [They] are complementary, capital raising and capital deploying.”
Together, they can attract hundreds of billions in institutional and financial market money to fund utility investments in large-scale renewables and public sector investments in local distributed generation. They can also work together to support utility transitions away from high-cost legacy generation to lower-cost “green” generation, stakeholders told Utility Dive.
Globally, over $788 billion in green bonds have been issued since the concept’s 2007 origination, according to new Bloomberg New Energy Finance data, and new issuances keep coming. Congress is considering proposals for a National green bank, which can help propel the energy transition if it can win the acceptance that major utilities told Utility Dive it deserves.
Only a few leading U.S. utilities have so far responded to the green bond opportunity. Of the approximately $41.6 trillion in U.S. bond obligations at the end of 2018, utility green bonds made up about $10 billion, according toa May 2019 Boston University (BU) paper.
This is due largely to today’s “low interest rate environment,” which makes conventional debt “safe and easy to raise,” the BU paper reported. Burdensome “reporting requirements and limits on the use of proceeds” have also made utilities reluctant to issue green bonds, despite investors’ willingness to accept lower interest rates to support green projects.
“Green bonds will be mostly financed by institutional investors like pension funds and insurance companies that prefer steady annual returns.”
Reduced risk could attract more utilities into issuances. Top credit rating agency Moody’s found green project loans “had a 10-year cumulative default rate of 5.7% versus a rate of 8.5% for non-green projects,” BU added.
“Over time, green bonds will be mostly financed by institutional investors like pension funds and insurance companies that prefer steady annual returns,” Schub said. “We’re not there yet, but it is changing.”
Xcel Energy recently issued multiple green bonds, motivated by the “changing politics and economics in the states it serves,” Schub said. “States like Minnesota and Colorado are moving away from fossil fuels, and green bonds are a good way to raise the capital to do it.”
Xcel’s first green bond in 2018 financed a Colorado wind project, and three more in 2019 financed wind projects in Texas, New Mexico and Minnesota. They attract “incremental investors” who are “looking to invest in green projects or renewables,” including some who “will only invest in green bonds,” Xcel Energy Chief Financial Officer Bob Frenzel told Utility Dive.
“That has created more demand for our bond products, and led to lower cost financing,” Frenzel said. “Our August Colorado 4.1% green bond set the record for the lowest interest for a 30-year utility bond in history, and our September Minnesota 3.7% green bond broke that record.”
“Assuming the markets remain favorable, we will continue to issue green bonds to finance the transition to clean energy,” he added. “They will not be the only source, but a significant source of financing.”
Georgia Power’s $325 million March 2016 issuance was the first green bond from a U.S. investor-owned utility (IOU). It allowed the company “to diversify its investor base by appealing to green-focused asset managers” and was “significantly over-subscribed,” Georgia Power spokesperson John Kraft emailed Utility Dive.
Duke Energy issued $1 billion in green bonds in November 2018 and $600 million more in March 2019 to finance or refinance clean energy projects. “We didn’t necessarily have to use green bonds, but it was an opportunity to demonstrate we are very focused on the kind of investments our customers want,” Duke Energy spokesperson Catherine Hope Butler told Utility Dive.
There is a lot of money right now looking for sustainable investments or those that address the climate crisis, American Council on Renewable Energy (ACORE) Chief Operating Officer Bill Parsons told Utility Dive. “Because green bonds tend to attract investors and have a lower risk profile that lowers the cost of capital, we are only going to see more of them.”
But while green bonds are taking off, it is not yet clear how big a role green banks will play in the delivery of green financing vehicles.
Credit: From CGC’s white paper on green banks
The rise of green banks
Xcel Energy worked with the some of the biggest commercial banks in the world on its green bonds, including Barclays, Credit Suisse, JP Morgan and Wells Fargo, Frenzel said. All were “supportive” and “proactive,” which left Xcel with the impression that there is no “need for a state or nationally created green bank.”
But financing for distributed solar “is often hard to secure because many private lenders are unfamiliar with and hesitant to finance clean energy,” Aurora Solar senior content marketer Gwen Brown blogged in January 2018. “Government-backed green banks accelerate the growth of clean energy markets.”
Green banks “use finance to help achieve public policy objectives,” said ACORE’s Parsons, a former board member of Montgomery County’s Green Bank. “Much of the work they do is on the local level with energy efficiency and distributed renewables.”
The twelve green banks at the state, county and city levels across the U.S. are typically chartered to leverage their limited taxpayer or ratepayer public-funding capitalizations with support from local financial institutions like credit unions and community banks, he added. They support the emergence of new markets by backing what are perceived as risky technologies “until their risk profiles are understood.”
Green banks are generally limited in two ways. They often have only thefunds provided by enabling legislation and their operations, and they must avoid a political backlash from any appearance of using public funds to compete with the private sector, Parsons said.
The Connecticut Green Bank was established in 2011 as the first U.S. green bank
With private sector partners, the bank has deployed over $1 billion for state clean energy projects. In June, it became the second green bank to issue a green bond. It followed the Rhode Island green bank’s October 2018 $18.3 million green bond issuance for energy efficiency, and was the first green bank-issued green bond for solar, according to the Connecticut bank’s EVP/CIO Bert Hunter. “We expect to do more of this type of financing,” Hunter told Utility Dive.
The New York Green Bank $1 billion investment fund is capitalized by ratepayers through utility bill surcharges, New York Green Bank President Alfred Griffin told Utility Dive.
The biggest of the U.S. green banks, the New York Green Bank’s enabling legislation specifies three operating criteria, Griffin said. Its investments must be directed at “greenhouse gas emissions reductions in the state of New York,” they must make the bank “self-sustaining,” and they must drive “market transformation.”
Within the limits set by those criteria, the New York Green Bank’s objective is to support “economically viable credit worthy business models in New York that have not yet gotten the attention of commercial banks,” he said.
Hawaii, Rhode Island, California and Montgomery County, Maryland, have green banks with more modest capitalizations, Aurora’s Brown reported. “Other states exploring the concept include Delaware, Virginia, Colorado, Missouri, Massachusetts, Washington DC, and, most recently, New Jersey,” she added.
A “green banking system” is needed to drive the emerging energy transition, University of California, Berkeley, Professor of Energy and Director of theRenewable and Appropriate Energy Laboratory Dan Kammen told Utility Dive. “It is the next big frontier.”
Advances on that new frontier could deliver economic and energy transition opportunities, stakeholders told Utility Dive.
Potential funding mechanisms |
Credit: From NextEra’s June 2019 investor presentation
Getting and using new money
While green banks have emerged across the country at the state and local level, the energy transition needs the financial support of a national green bank because it is “fundamentally a construction project” that could require “as much at $4.5 trillion,” according to Coalition for Green Capital’s Schub.
The Green Bank Act would raise $50 billion through green bond issuances to support state and local green banks. The Senate’s bill would raise $35 billion and create an independent nonprofit institution to invest in green projects.
A national green bank could bring a trillion dollars of investment, with some coming from consumers’ purchases of “green savings bonds,” Schub said. “They would be like U.S. savings bonds and could raise capital while building broader political buy-in for the energy transition.”
It will take some time to get to that level of green bank investment, but in the meantime, such banks can help on a smaller scale with the energy transition.
Utilities in organized markets are responding to emerging power sector economics by transitioning to cost-competitive renewables. They have built 30 GW of solar and 92 GW of wind. But “laggard” regulated utilities, electric cooperatives and public power entities have built just over 1.5 GW of solar and about 11 GW of wind, according to Rocky Mountain Institute Electricity Practice Principal Uday Varadarajan .
Those utilities “face significant disincentives to retire uneconomic assets because accelerated cost recovery reduces earnings for shareholders and increases customers’ rates,” Varadarajan said. “That slows procurement of new generation.”
Green banks and green bonds can eliminate those disincentives by providing new capital to finance renewables procurements and cost recovery for legacy fossil assets, he said. The capital “can also help mitigate the worker and community costs of the transition.”
Green banks can “package” green bonds with “transfer payments and other types of assistance, like grants, equity financing, and local economic development financing,” he said. Critically, they can also deliver “a subsidy in the form of discounted financing at below market rates, treasury financing. or even extremely low interest rate loans over a longer term.”
“There are many public equities at stake that are generally not appropriate for private sector finance to take on,” Varadarajan said. “But a green bank’s leverage can be substantial, allowing a relatively small appropriation to do a huge amount of financing and to deliver a lot of benefit.”
Correction: An earlier version of this story misidentified affiliations for Bill Parsons. He is a former board member of Montgomery County’s Green Bank.
Author: West Monroe Published: 11/26/19 Utility Dive
2019 Industry Research Report: How Utilities Can Win the War for Talent
Custom content for West Monroe Partners by Utility Dive’s Brand Studio
Today’s utilities are facing numerous challenges to attract and retain the talent they need for the future. According to West Monroe Partners and Utility Dive Brand Studio’s 2019 Industry Survey Report, a mere 6% of leaders believe their utility is performing “excellently” at recruiting young technical talent. The report also states that nearly half of leaders (48%) fear that their recruiting may not be enough to meet future needs.
Our new survey report provides an overview of the eye-opening discoveries we found, and what it means for utility companies that want to get ahead of the competition.
Read this report to learn more about:
Opportunities to attract young employees
How utility executives prioritize the employee experience
Shifting a utility’s workplace culture to one that attracts and retain the talent they need to achieve transformation goals
“For 75% of what utilities are doing, outside of maybe forecasting or managing capacity, AI is at the infancy stage and there is no real use case.”
Just as power system operators are mastering data analytics to optimize hardware efficiencies, they are discovering how the complexities of artificial intelligence tools can do far more, and how to choose which to use.
With deployment of advanced metering infrastructure (AMI) and smart sensor-equipped hardware, system operators are capturing unprecedented levels of data. Cloud computing and massive computational capabilities are allowing data analytics
AI is a form of computer science that would make power system management fully autonomous in real time, researchers and private sector providers of power system services told Utility Dive. ML is a part of AI that passes human-supervised data analytics through preset or learned rules about the system to inform AI of normal and abnormal operational conditions.
“[D]ata management falls into ‘crawl, walk, and run’ categories, and most utilities are crawling in their use of data right now. AI for data management would be ‘running.'”
Kevin Walsh
Transmission and Distribution Principal, OSIsoft
“Knowing when to use data analytics and when to use machine learning and AI are the fundamental questions utilities are asking,” GE Digital VP for Data and Analytics Matt Schnugg told Utility Dive. Continuing to use an approach “that has been good enough for years” has merit, but new tools and capabilities may justify “turning to data scientists and cloud computing” and there are “parameters” for knowing how to choose between them.
The sheer volume of data is beginning to exceed human capabilities, but system operators often don’t have the technology to deploy demonstrated AI and ML solutions for power flow management, researchers told Utility Dive. The mathematics of solutions are not yet fully understood, they acknowledged. The next big question may be whether system operators will risk ML and AI for results humans cannot yet provide or understand.
“Utilities have billions of dollars invested in hard assets and they use data to manage those assets,” Kevin Walsh, transmission and distribution principal for data management specialist OSIsoft, told Utility Dive. “But data management falls into ‘crawl, walk and run’ categories, and most utilities are crawling in their use of data right now. AI for data management would be ‘running.'”
Data management providers like OSIsoft help utilities assimilate data “and make it available across the enterprise to enable intelligent decisions based on what is actually happening in the field,” Walsh said. “For 75% of what utilities are doing, outside of maybe forecasting or managing capacity, AI is at the infancy stage and there is no real use case.”
“AI and machine learning shops are too often looking for problems to solve rather than addressing the very specific problems that utilities face and showing how machine learning might be the right solution.”
Joshua Wong
CEO, Opus One Solutions
A data stream anomaly spotted by OSIsoft’s PI System data analytics allowed the Alectra, Texas, municipal utility to defer a $3 million transformer replacement with a $100,000 transformer repair, he noted. Duke Energy and Sempra Energy use PI analytics for predictive maintenance. Data analytics “does most of what utilities need” without the costs and complexities of AI and ML, he said.
Get electric utility news like this in your inbox daily. Subscribe to Utility
to make these investments pay off for customers. But it may take machine learning (ML) and artificial intelligence (AI) to address new power grid complexities.
“AI and machine learning are the buzz with investors and the general public, but utilities’ key concern is what any analytics will bring to their operations,”Opus One Solutions CEO Joshua Wong agreed.
Opus One uses advanced physics and mathematical formulas that underlie the distribution system to build a “digital twin” of a utility’s system, Wong told Utility Dive. Largely through analytics software, the twin is used to model and inform utility system operations, planning and market and business model design.
The most common use of ML is for five-minutes-ahead to day-ahead algorithms that do load and generation forecasting, he said. Utilities’ legacy software technologies cannot run “the very large and interdependent data sets needed for the entire grid’s power flow,” but forecasting requires only learning forward “from a single point in history without a lot of dependent phenomena.”
Better algorithms can be built with a combination of AI tools and data analytics that correlate real data and learning, Wong said. “Machine learning’s greatest impact will be in making correlations that teach the algorithm to understand how the voltage here affects the voltage there.” Those correlations will enable “optimizing grid operations like dispatching battery storage or managing electric vehicle charging,” said Wong.
In the first pilot for what could eventually be an autonomous grid, Helia Technologies and Colorado electric cooperative Holy Cross Energy (HCE) are testing ML’s battery dispatch capabilities.
Four houses on the HCE system are equipped with multiple distributed resources, including batteries. A Helia controller is predicting the batteries’ actual charge-discharge potential instead of the vendors’ rated capabilities, Helia CEO Francisco Marocz told Utility Dive. That allows the houses to support optimal system power flow for HCE.
A similar pilot testing ML‘s ability to optimize battery dispatch proved successful for Colorado’s United Power, National Rural Electric Cooperative Association Analytics Research Program Manager David Pinney told Utility Dive. “The machine learning algorithm was able to forecast the co-op’s optimal dispatch of the various energy storage applications three days ahead.”
Duke Energy is “beginning to use machine learning capabilities, especially in the areas of data analysis and predictive analytics,” Duke spokesperson Jeff Brooks told Utility Dive in an email. There is still human supervision in Duke’s remote switches and reclosers that enable reconfiguring and rerouting in response to outages, but some of it is done with “scripted algorithms and processes.”
“Breakthroughs in computational and data processing capabilities make it possible for algorithms to learn through interactions with the grid environment.”
Qiuhua Huang
Research Engineer, Pacific Northwest National Laboratory
Over the next three to five years, Duke data scientists plan to “develop and deploy” AI and ML that will more fully automate analytics, outage management and power flow, Brooks said.
Transmission system operators have been slower to move toward automation, but DOE-funded national lab research is now focused on ML algorithms that train neural networks to process system data, researchers told Utility Dive.
Neural networks are sets of algorithms designed to recognize and order patterns in analyzed data and ML can train them to assist transmission system operators facing sudden large voltage fluctuations, Pacific Northwest National Laboratory (PNNL) research engineer Qiuhua Huang told Utility Dive. In early-stage simulations, algorithms responded in milliseconds to prevent voltage instability and cascading outages.
“Breakthroughs in computational and data processing capabilities make it possible for algorithms to learn through interactions with the grid environment,” he said. “ML observes historic and real time data and learns to produce good outcomes in a way that seems beyond human intuition.”
ML is being used to train a different type of neural network to respond to a transmission line failure caused by a demand spike, weather event or cyberattack, Argonne National Laboratory research scientist Kibaek Kim told Utility Dive. In simulations, it has responded 12 times faster than human operators do today and adjusted the voltages “automatically from the trained model.”
The goal is to take system operators “out of the loop” and leave “the decisions from end to end” to AI, National Renewable Energy Laboratory (NREL) research scientist Yingchen Zhang told Utility Dive. It will take time and trials because, unlike an easily discarded ML-selected Netflix movie choice, “the wrong power system decision could cause a blackout across the system and that is not acceptable.”
The need for trials to validate reliability is a major reason ML and AI have seen little deployment, Kim said. Another is that, as Wong noted, utilities and system operators do not yet have the hardware and software to use them, although that is being resolved with new cost-effective access to cloud computing, he said.
More significantly, utilities are reluctant because researchers “do not fully understand the underlying mathematics” of the neural networks and “why they work so well,” Kim said. “The understanding will come, but I don’t know when.”
It is clear ML works the way it was designed “because input provided to the algorithm is learned and performs as intended,” PNNL’s Huang said. “But arguably we don’t know exactly how a neural network selects from the inputs and comes to the final decision because there is so much complicated processing to reach that decision.”
Research is now directed at the question, he added. The likely explanation is that neural networks are using “a totally different way of interpreting these equations with some higher-level logic.”
While the question is being answered, power system operators must decide how to proceed.
How to choose what to use
Deciding whether ML and AI are needed to address operations long addressed with data analytics depends on two factors, GE Digital’s Schnugg said. One is who the system operator is, and the other is what problem the operator wants to address.
ML algorithms “tend to have the most impact when modeling events that have occurred many times, rather than Black Swan events without a data pattern.”
Matt Schnugg
VP for Data and Analytics, GE Digital
Guidelines for making the decision “are not canonical,” but “there are parameters for when it is best to use AI and machine learning,” he said. “First, you have to have a tremendous amount of data cleaned and ready for the algorithm to be trained and built. That is just table stakes. Access to the cloud is usually the most cost-effective way to have that.”
Second, ML algorithms “tend to have the most impact when modeling events that have occurred many times, rather than Black Swan events without a data pattern,” he said. GE’s new Storm Readiness application is built on the history of repeated outages from storms. “Storm readiness is the output of the model. The more outages there are to study, the more accurate the model can be.”
Third, modeling must pass the ‘yeah, no, duh test’ by solving a real problem, Schnugg said. “ML is not needed to predict the sun will rise tomorrow, but if a decision about something very data-rich that occurs repeatedly could lead to appreciably better performance, it is worthy of using AI and ML to build a predictive model.”
There are two definitions for “better performance,” he added. “It can be a more accurate prediction, or it can be saving time while achieving the same accuracy. An ML-based predictive model that automates a process or a series of decisions that would take a human much longer adds tremendous value.”
In GE’s new Storm Readiness product, ML algorithms build and train a neural network to learn the system’s weather and performance data history. It can then predict 72 hours in advance where the storm will hit the system and what resources will be needed to address its impacts.
In contrast, its new Network Connectivity product relies entirely on traditional data analytics to manage transmission and distribution system assets. The objective is to optimize the utility’s business activities, from hardware maintenance to truck rolls.
The GE Effective Inertia application is a hybrid tool that combines real timetransmission system data analytics and an ML-based load and generation forecasting algorithm. It anticipates fluctuations in system inertia 24 hours in advance from momentary supply-demand imbalances caused by rising levels of variable renewables, and informs cost-effective reserve procurements to stabilize the fluctuations.
“The cloud has democratized access to data, and now it is the quality of the data and the quality of the question being asked that are most important,” Schnugg said. “ML and AI are only part of the value. The biggest value is helping the utility solve its problem.”
Author: Sammy Fretwell Published: 11/19/2019 The State
Solar farms have popped up across the Carolinas TIM DOMINICKTDOMINICK@THESTATE.COM
For the second time in two years, a decision by South Carolina leaders threatens to cripple a major segment of the emerging solar power industry, sun energy boosters said Tuesday.
The S.C. Public Service Commission, in a much-awaited decision, sided with major utilities last week in setting the rates power companies must pay solar firms for energy.
The rates for Duke Energy and Dominion Energy are so low that industrial-scale solar developers won’t be able to get financing to continue building sun farms in South Carolina — and that could set back efforts to stabilize people’s utility bills, industry officials and conservationists said.
Utilities dispute predictions of the solar industry’s demise, but sun power backers said the public should pay close attention to the PSC’s actions. In addition to the vote on rates, the commission said utilities don’t need to provide long-term contracts to solar farm developers, a decision that also makes financing difficult, according to the state’s solar industry.
The rates will be the lowest in the country, and the contract lengths among the least attractive in the Southeast, according to the Solar Energy Industries Association, a national trade group.
“A solar ‘doomsday’ scenario just happened,’’ the Conservation Voters of South Carolina said in an afternoon email to its supporters and the media.
The PSC’s decision put customers of Duke and Dominion in the middle of a battle over solar energy’s future in the state.
Solar farm developers say attractive rates and long-term contracts would help the industry expand in South Carolina and force utilities to buy more solar energy.
That, in turn, would potentially reduce the state’s reliance on traditional forms of energy like coal, nuclear and natural gas. If utilities increase their use of solar power, customers would be less likely to see spikes in their utility bills from rising costs like those associated with coal and natural gas plants, sun farm developers say. Solar power also benefits the environment because it doesn’t release greenhouse gases like coal plants or create waste like nuclear reactors.
“By adopting exceedingly low rates to be paid by Duke and Dominion for independent solar power, and refusing to require contracts longer than ten years, the PSC has made it extremely difficult, if not impossible, for new solar projects to be financed and built,’’ according to a statement from the S.C. Solar Business Alliance, whose members include companies developing solar farms.
John Tynan, director of the Conservation Voters of South Carolina, said the Public Service Commission “basically decided to shut down solar competition and keep the utilities monopoly status quo.’’
But utilities dispute those assessments, saying the solar industry is doing fine in South Carolina. Utilities contend that providing higher rates to solar companies for power produced on sun farms would hurt customers. They say they would simply pass along costs to hundreds of thousands of customers in South Carolina. Duke and Dominion provide energy to most of the state.
Duke spokesman Ryan Mosier said his company “largely agrees with the commission’s ruling’’ on the rate solar energy companies would receive for solar power they produce.
“The solar industry continues to expand in the South, and we see no reason why that shouldn’t continue,’’ Mosier said in an email. “In the past, solar adapted to current market conditions and prospered. Duke Energy sees solar as a growing and important part of our overall energy mix.’’ Dominion said it is still evaluating Friday’s PSC ruling, but the company released a statement saying it supports adding more renewable energy to provide power.
Solar farms have popped up across South Carolina in recent years as the business and political climate for solar has improved. But solar companies in the past were getting better rates and contract terms from power companies than they are now being offered, critics say.
Southern Current, one of the state’s more prominent industrial-scale solar farm developers, has since 2017 announced plans for more than $800 million in investment by constructing 700 megawatts of new solar. The company employs about 100 full-time workers in South Carolina, said Hamilton Davis, the company’s director of regulatory affairs.
Last week’s PSC decision is the second since 2018 to threaten the solar industry. In 2018, the state Legislature failed to approve a bill that would have lifted a state-imposed cap on the expansion of rooftop solar after influential utilities persuaded lawmakers to kill the bill on a technicality. The Legislature’s failure to remove the cap threatened to grind the home solar industry to a halt.
Negotiations among Duke, Dominion and solar power advocates kept the industry going until the Legislature in 2019 approved the expansive Energy Freedom Act.
The 2019 law lifted the cap, while also setting a minimum 10-year contract length for solar energy projects that were in the works. But it said the PSC should also reexamine many solar issues, including the contract lengths and rates to be paid by utilities to solar farm companies in the future. That led to hearings at the PSC last month over solar rates and contract lengths.
The seven-member PSC voted Friday for the lower rates and to keep contract lengths at 10 years, with only Commissioner Justin Williams dissenting.
Rates approved by the PSC actually dropped some of the rates Duke and Dominion had been required to pay solar developers for many of their projects, according to the solar industry.
The drop in rates is complicated, but it boils down basically to this: Dominion’s solar rate for sun farm developers dropped from three cents to two cents per kilowatt hour, according to the S.C. Solar Alliance. Duke’s solar rate drops from 4.5 cents to three cents, the alliance and Duke Energy said Tuesday. The solar industry was seeking rates of around four cents.
PSC commissioners defended their ruling last week, saying it was the best decision they could make in the long-running dispute between major power companies and sun energy backers. Commissioner Swain Whitfield said he was sympathetic to the arguments for solar, but remained unpersuaded.
Commissioners expressed reservations about making utilities pay high rates for solar-farm produced energy. They also said solar companies had not made a good case for longer-term contracts.
“The record is completely without supporting evidence for terms and conditions that would allow us to establish longer contract terms at this time,’’ Whitfield said.
Commissioner Williams said the S.C. Energy Freedom Act that passed earlier this year was intended to help the solar industry. He questioned whether the commission was following the intent of the law in not setting longer-term contracts.
“I’m concerned by that because I recall hearing much testimony regarding the inability of solar companies to receive financing for contract terms that were shorter in length, such as the 10 year contract term.’’
How South Carolina utilities provide energy has been under the microscope since state-owned Santee Cooper and SCE&G — later purchased by Dominion — walked away from a twin nuclear reactor project they were building in Fairfield County. The companies had spent about $9 billion at the time they quit the construction project in 2017, citing high costs and problems with contractor Westinghouse.
Since then, solar energy boosters have seized the opportunity to promote power production from the sun. Only a fraction of the state’s energy production comes from solar power.
Read more here: https://www.thestate.com/news/local/environment/article237536009.html#storylink=cpy
Can a $13,000, quick-to-install home battery system compete with offerings from Tesla, LG Chem and sonnen?
Before he retired from the Marine Corps, Col. Brent Willson commanded bases and managed procurement for a $100 billion portfolio of helicopters and tilt-rotor aircraft, including the Osprey vertical takeoff and landing vehicle.
Now he’s competing to build better home battery systems.
Willson’s San Diego-based startup NeoVolta emerged when a friend in the solar industry asked for his thoughts on the existing field of home energy storage systems. Willson did his due diligence but didn’t find anything entirely to his liking. He wanted something with the safety, performance and cycle life of a sonnen system, but at a price that could compete with Tesla’s Powerwall.
That combination did not exist, so Willson designed it, secured white-labeled manufacturing partners, and opened an integration facility in Poway, outside of San Diego.
Compared to shepherding advanced military aircraft into production, “This is much easier,” Willson said in a recent interview.
Now he’s shipping 50 units a month, priced at around $13,000 each, competing with the more established names in the small but growing ecosystem of home battery providers.
NeoVolta’s offering highlights gaps in the existing field. Homeowners have had to choose from just a handful of prominent vendors supplying the nascent home storage market. But the market is growing, and California’s worsening wildfires, plus utilities’ preemptive blackouts, have made a compelling case for home backup power, even as time-of-use rates undermine the value proposition of existing solar customers.
“The U.S. residential storage market is still young and thus remains open for new entrants,” said Brett Simon, a Wood Mackenzie analyst covering behind-the-meter energy storage.
Longer lasting
All the leading batteries on the market can perform the same basic tasks, namely, shifting solar generation and ensuring backup power.
“For a new entrant to win out, it would have to demonstrate something superior…a lower price point, improved performance or some other perceived advantage,” said Simon.
The NV14 product clocks in at 14.4 kilowatt-hours, slightly more energy storage capacity than a Powerwall and significantly more than LG Chem’s 9.8 kilowatt-hour Resu. Its inverter can charge or discharge 7.7 kilowatts of instantaneous power, also more than the mainstream competitors.
The product uses lithium-iron-phosphate chemistry, which has lower risk of catching fire than the more popular NMC battery chemistry.
Willson designed his enclosure to encapsulate the inverter and automatic transfer switch, so the only external item needed is a critical load panel that comes with the package. This avoids the clutter of ancillary equipment boxes that other storage products require, but which seldom appear in promotional photographs.
The NV14 accepts AC power from solar inverters, but it can also take output directly from DC solar panels. That makes the product appealing for retrofits on solar systems with inverters at the end of their useful life. To add an AC-coupled battery system would require buying a new inverter at the cost of thousands of dollars; instead, installers can plug the old solar straight into the NV 14.
NeoVolta advertises a warranty for 10 years or 50,720 kilowatt-hours of throughput. The company’s youth and independence, though, create a risk that it won’t be around to honor the warranty years from now. Nonetheless, the company told Greentech Media, “We have agreements with suppliers and the means to cover 10-year warranties.”
Unconventional strategy: An IPO
At first glance, the pathway to market as an upstart storage manufacturer seems fraught with difficulty.
Tesla enjoys tremendous brand recognition thanks to Elon Musk’s pivotal role in popularizing home storage technology and the company’s EV business. LG Chem has the backing of one of the premier cell manufacturers, and a strong partnership with Sunrun, the top U.S. rooftop solar installer, which has delivered 8,000 home storage systems so far. Sonnen, less widely known in the U.S., was acquired by oil major Shell.
NeoVolta chose an unconventional strategy to go up against these formidable incumbents. It went public.
After taking $1.5 million in private investment, the company held an initial public offering in May that raised $3.5 million at $1.00 per share, according to a November filing with the Securities and Exchange Commission.
IPOs remain extremely rare for the cleantech sector, and dollar rounds even more so. The irregular approach, however, did generate enough cash to get manufacturing started without a series of dilutive venture capital rounds. The money raised should fund operations for at least a year, the filing noted.
“I just put my foot on the gas and, ‘Let’s go, what am I waiting for?'” Willson said.
The company plans to distribute through installer partners rather than taking on that role itself. NeoVolta started selling to San Diego-area solar installers in May and has since expanded into Los Angeles and Northern California. Distribution channels in Florida, Arizona, Nevada, Canada and Hawaii are coming in the next few months, Willson said.
The financial reporting provides an unusual degree of transparency into the company’s operations. NeoVolta sold 38 units in the three months ending September 30, at a gross profit margin of around 20 percent, the filing noted.
Since then, sales have ramped up to 50 units per month, Willson said, and he expects to hit 100 per month early next year. The factory has capacity to assemble 10,000 units in a year, leaving ample room to grow.
Easier for installers
San Diego-based installer SolarTech Energy Systems was the first partner to sign on. The company employs around 75 people and manages 15 installation crews, said Director of Operations Grant Magoffin. Previously, SolarTech had installed batteries from sonnen, Tesla and LG Chem.
Not every battery can be installed on every home at a reasonable price, Magoffin said, but NeoVolta covers most of them.
“It is the perfect setup for the standard home where people are looking to get a large backup storage facility in terms of kilowatt-hours relative to their home’s electricity needs,” he said.
NeoVolta is geared for critical load backup, though, so customers looking for whole-home backup will gravitate toward Tesla or sonnen. Doing so typically requires several Powerwalls, however, and Magoffin said he stopped installing sonnen because it was roughly twice as expensive as Tesla (“It doesn’t work well for Southern California, where prices are already high for utilities and housing,” he said of the sonnen product).
Tesla has the incumbency advantage; more customers have heard of it, and it has been on the market for several years. It’s also backed by a famed car manufacturer with a market cap of $63 billion. But NeoVolta packs some characteristics that appeal to economically minded installers.
“The cost to install a NeoVolta is actually less,” Magoffin said.
SunTech has installed the NeoVolta battery in six hours on average, whereas Powerwalls average a day and a half due to the extra wiring and electrical work they require. With more practice, the teams could get to a point of installing two NeoVolta systems in one day, Magoffin added.
High school science teacher Matt Farley got an NV14 installed in less than a day at his house in the foothills east of San Diego. Since the late July installation, the utility cut power to the area twice due to high fire risk; one outage lasted a day, the next one for more than two days. But with the battery running, “We wouldn’t have really noticed,” Farley said.
Farley took out a loan for the purchase, but the federal tax credit and state rebate knocked off about half of that amount.
“If you are somewhere where your power’s going to get shut off, I’d definitely recommend it,” he said. “It’s super affordable for the peace of mind.”
SolarTech’s Magoffin also liked that NeoVolta includes the critical load panel in the package, noting that other brands require the installer to order that separately. And the ability to retrofit onto existing solar without forcing a new inverter purchase sets it apart from the competition.
It’s not clear that old solar retrofits will generate much business overall, Simon cautioned, because the solar market 15 years ago was miniscule compared to new adopters today. But it could represent a niche that NeoVolta can specialize in as it gets off the ground.
Author: Iulia Gheorghiu Published: Nov. 19, 2019 Utility Dive
Dive Brief:
PJM Interconnection’s Board of Managers has appointed Manu Asthana as its new president and CEO, effective Jan. 1, 2020, the grid operatorannounced Monday.
Most recently, Asthana served as president of Direct Energy Home, combining Direct Energy’s retail electricity and home-services businesses in North America. The electric and natural gas provider serves 3.4 million customers.
The grid operator has a lot on its plate in the near term, from applying federal regulatory orders to allow energy storage to compete in its market to progressing with its delayed capacity auction.
Dive Insight:
Asthana will be the first PJM CEO to bring a competitive retail electricity focus to the job.
“The electric industry is rapidly changing, and PJM needs to continue to evolve,” Ake Almgren, chairman of PJM’s Board of Managers, said in a statement. Asthana will “lead PJM into the future.”
Phil Harris and the most recent CEO, Andy Ott, were both appointed from within PJM and Terry Boston led the transmission and power operations sector of Tennessee Valley Authority before serving as PJM CEO.
The decision comes after a series of changes in PJM’s leadership. This summer, PJM announced five executive appointments focused on system reliability, competitive wholesale electricity markets and infrastructure planning.
Ott stepped down this summer. Sue Riley, the interim president and CEO since Ott’s departure, will return to her position on PJM’s Board of Managers after Asthana takes over.
“Manu comes to PJM with a wealth of experience from the electricity value chain, and we are confident that he will bring new and important perspectives to the organization,” Almgren said.
Asthana declined interview requests before starting his job, but according to his LinkedIn profile, he served as president of Direct Energy Home in North America for more than three years, until December 2018. He was at Direct Energy for a total of eight years, and at TXU Energy, another retail electricity provider in Texas, for 12 years, where his roles included trading and managing assets as well as chief risk officer.
Author: Public Service Commission Pubished: 11/19/19
Commissioner Odogwu Obi Linton
Odogwu Obi Linton was appointed to the Maryland Public Service Commission in August 2017 after serving for almost nine years as the Commission’s Director of External Relations and Retail Market Development. In that capacity he managed consumer relations and dispute resolutions and led the Commission’s efforts in creating new regulations for consumer protections and theft of energy, consumer education and customer choice, and supplier diversity. He has served the Commission in an advisory capacity on utility consumer and deregulated market matters and is the Founding Chair of the Utility Marketplace Access (now Supplier and Workforce Diversity) Staff Subcommittee for the National Association of Regulatory Utility Commissioners (NARUC) and has served as a member of the Staff Consumer Affairs Committee for seven years.
He began his career in 1991 as a meter reader and engineering intern at Public Service Electric and Gas in New Jersey. Commissioner Linton first came to the Maryland PSC as a law intern and later clerked for the Honorable Evelyn Omega Cannon in the Circuit Court for Baltimore City. Commissioner Linton worked as a regulatory attorney at Baltimore Gas and Electric Company, where he worked on the deregulation of the electric industry and specialized in consumer disputes. Over five years later, he rejoined the Commission as Deputy Staff Counsel, where he was assigned the additional responsibility of leading the Commission’s Consumer Dispute Resolution Unit. Commissioner Linton then left the Commission to start his own law firm, where he represented consumers, small businesses and deregulated suppliers in litigation and transactional matters. He eventually closed his firm to return to the Commission to serve as Director of the Office of External Relations, where he also handled Retail Market Development and Supplier Diversity matters. Among his multiple responsibilities, Commissioner Linton led the multi-year effort to adopt new consumer protections in deregulated markets and enhance notice requirements for meter tampering.
Commissioner Linton holds a Bachelor of Science in Administration of Justice and a Bachelor of Arts in Africana Studies from Rutgers University, and a Juris Doctor from the University of Maryland School of Law. He is admitted to the Maryland bar and is a resident of Catonsville, Maryland.
Africa-focused PowerGen, a market leader in minigrids, adds to Shell’s expanding investments in off-grid energy access.
Shell and Sumitomo have taken a minority stake in African minigrid firm PowerGen.
The pair will have a combined ownership of 15 percent after leading the most recent funding round alongside six other investors. Shell will get a seat on the board, with Sumitomo taking an observer seat. Financial details of the Series B round were not revealed.
PowerGen has connected around 15,000 homes and business via its minigrid installations in Kenya, Tanzania, Sierra Leone and Nigeria. It will use the new funds to build out its presence on the ground, but not for project finance.
Shell CEO Ben van Beurden has set a target for the company of providing reliable power 100 million people who don’t already have it by 2030
Ben Attia, a research analyst at Wood Mackenzie Power & Renewables, said PowerGen’s claim to be the market leader for African minigrids is well founded.
“They have scale and first-mover advantage,” said Attia.
“They are also involved in a fund with CrossBoundary Energy Access that effectively enables the securitization of a portfolio of minigrid assets,” he added. “This is so important because it’s very difficult for minigrid companies to scale because they are building capital-intensive infrastructure that makes infrastructure level returns.”
“So the payback periods for these systems can be quite long,” Attia said. “PowerGen has worked out an innovative way to offload a number of projects, get paid for them, and then go out and build some more.”
PowerGen recently became the first company in the minigrids sector to buy a competitor when it acquired Rafiki Power from E.ON in August.
Shell has invested in a number of companies as it looks to hit that 100-million-people target. Earlier this year it secured access to India’s commercial and industrial solar market with a stake in Orb Energy. It also has a stake in minigrid firm Husk Power and has made several investments in off-grid metering manufacturer SteamaCo.
The other six participating investors in the Series B round were Omidyar Network, Acumen, Renewable Energy Performance Platform, EDFI ElectriFI, DOB Equity, and Microgrid Catalytic Capital Partners.
Sam Slaughter, CEO at PowerGen, told GTM the challenge of helping the company hit its 100-million-customer target was an exciting one.
“Shell has a lot of depth in Africa, so geographically they’re really strong,” Slaughter said. “They’re entering the utility market at a time when things are changing and evolving, and it is going to take new thinking and new ideas.”
PowerGen’s focus is presenting itself and its peers as an alternative, or complementary, solution to Africa’s frequently failing national utilities, Slaughter added.
“It’s about changing the rhetoric about minigrids from being a niche application for certain communities with certain characteristics to a conversation about how private companies like PowerGen can be alternative utility operators to these national utilities,” he said.
To better influence these conversations, Slaughter said the company will need to continue to scale. He considers a critical mass to be around 200,000 connections, up from the current tally of 15,000. Building the systems and infrastructure required to deliver that will be the focal point for the new funds.
“Our immediate priorities are scaling up in Nigeria and Sierra Leone as aggressively as we can, while continuing steady growth in our more mature markets of Kenya and Tanzania,” said Slaughter.
Senior executive at the world’s leading wind turbine supplier thinks fossil fuel companies should cover the investments needed for a flexible grid.
PARIS — Laying the costs of integrating more variable power into the grid at the feet of the renewable energy sector is an “outrage,” a Vestas executive has said.
Morten Dyrholm, senior vice president at the world’s leading maker of wind turbines, was responding to claims that grid-integration costs undercut the notion that renewables can now thrive without government support in many markets.
Speaking as part of a conference session at European Utility Week, Dyrholm said the wind sector has worked hard to get to the point of subsidy-free deployment.
Fellow panelist Dominique Jamme, managing director of the French energy regulator CRE, said that as renewables grow from 30 percent of the mix to 70 percent and beyond, the system costs required to stabilize the grid aren’t being factored into claims that wind and solar are viable without government support.
“But at 60, 70 and 80 percent, you have the issue of sustaining stability of the system. As you put in more renewables, you are adding cost,” Jamme added, before asking, “Who is going to pay for the [energy] storage?”
Dyrholm, who leads Vestas’ marketing, communications and public affairs efforts, responded strongly.
“I can’t help but feel a little bit outraged when people say, ‘But system cost,'” Dyrholm said. “It should be the other guys, the fossil guys [that pay]. Their societal cost is enormous; [think about] the amount of subsidies, the socialized costs [of fossil fuels] that we’ve allowed to happen for generations.”
“And now we have finally become unsubsidized, andwe have to support system costs? In the meantime, we let the young kids do the hard work for us. They go on the streets. They go and fight for change, and we sit here as an industry and talk about ‘system cost’?”
“We should be as outraged as them, and we should be united [as an industry] in asking for change. We have a special obligation in our industry, and I am not just saying that to sell more turbines. I’m saying that on behalf of my kids. We need to be more outraged when we see examples of something not working just because of the regulations in place.”
Project developers cover system costs like grid connections in many markets, and these are typically factored in when calculating the levelized cost of electricity for new projects.
In most markets, additional costs to support renewables on the network, including energy storage, are ultimately passed to consumers and generators. Any increased charges on consumer bills can become highly political.
Your source for Maryland’s Workforce and Labor Market Data
Mission
OWIP’s mission is to collect, analyze, and produce labor market and workforce information as a service to businesses, job seekers, students, workforce and economic development programs and their community of service providers in Maryland. Our primary function is to make workforce and economic data and analysis easily accessible for informed decisions, from individual choices to workforce and economic policy directions.
Guiding Principles
Partner with the workforce and economic development community.
Develop and deploy new information solution tools and systems for the workforce and economic development community.
Provide products and services that are customer and demand driven.
Be recognized as an important and reliable source for information solutions that support economic workforce development goals and outcomes.
Don’t hesitate to contact one of our LMI specialists at 410-767-2250 or DLWDALLMI-DLLR@maryland.gov for additional information or to inquire about requesting specialized sets of data!
Maryland Department of Labor
Division of Workforce Development and Adult Learning
Office of Workforce Information and Performance
1100 North Eutaw Street
Baltimore, Maryland 21201
410-767-2250 DLWDALLMI-DLLR@maryland.gov
Author: Salvador Rodriguez Published: 10/23/19 CNBC
KEY POINTS
Mark Zuckerberg did not have many answers when asked about the details of Facebook’s civil rights work by Rep. Joyce Beatty during a Congress hearing on Wednesday.
Beatty, who is the chair of the Financial Services Diversity and Inclusion Subcommittee, grilled Zuckerberg on a number of topics related to race, diversity and civil rights.
Beatty used her time during a hearing that was focused on Facebook’s libra cryptocurrency project to emphasize Facebook’s checkered past with minorities.
WATCH NOW
VIDEO05:13
Facebook’s Mark Zuckerberg testified on Project Libra — Here are some key moments
Facebook CEO Mark Zuckerberg has talked a lot about civil rights this week. But when Rep. Joyce Beatty, D-Ohio, asked him for details during a congressional hearing on Wednesday, Zuckerberg did not have many answers.
close dialog
Beatty, who is the chair of the Financial Services Diversity and Inclusion Subcommittee, grilled Zuckerberg on a number of topics related to race, diversity and civil rights. She asked about Facebook’s contracting of minority or women-owned firms, allegations that Facebook’s ad systems allowed housing discrimination, and the company’s on-going civil rights audit, which is being conducted by Relman Dane & Colfax, a Washington D.C. civil rights law firm.
“Do you know who the firm that you employ for civil rights is?” Beatty asked.
“Congresswoman, I don’t off the top,” Zuckerberg said.
WATCH NOW
VIDEO03:48
Facebook’s behavior broadly is an issue: Axios’ Ina Fried
“How could you not know when you have employed the most historical, the largest civil rights firm to deal with issues that are major, and this is what’s so frustrating to me. It’s almost like you think this is a joke when you have ruined the lives of many people, discriminated against them,” Beatty said.
“Do you know what the percentage of African Americans are on Facebook in comparison to majority folks? Do you know what the percentages are?” Beatty asked.
“People using the Facebook?” Zuckerberg responded.
“Yes. Do you know what the percentages are for African Americans?” Beatty asked.
“I don’t because we don’t collect the races of people,” Zuckerberg said.
“Well it came out in a report in the Pew Research Center that was sent to you. So maybe you just don’t read a lot of things that deal with civil rights or African Americans,” Beatty said.
Zuckerberg spoke about Facebook’s civil rights audit in hisprepared remarks for his testimony before the House Financial Services Committee on Wednesday. He also talked about civil rights during a speech on free expression on Thursday at the Georgetown University, invoking civil rights leaders Frederick Douglass and Martin Luther King Jr. to explain why Facebook will not fact-check political ads. Zuckerberg’s remarks were criticized by Bernice King, the daughter of King Jr.
“I have a lot of questions I’m going to send to you that I’m not going to be able to get through, and I would like an answer because this is appalling and disgusting to me,” Beatty told Zuckerberg.
Homeowners may be able to put solar panels on the fronts of their roofs in historic districts, under new sustainability guidelines released by DC’s Historic Preservation Office Friday. HPO may still push homeowners to adjust colors, appearance, and so forth of their panels, but won’t outright prohibit them.
This move follows a firestorm which erupted when the Historic Preservation Review Board, the mayorally-appointed body which makes most preservation decisions,forbade Takoma homeowner Steven Preister from putting solar panels on the front of his house.
Preister argued that saving the planet required doing everything possible to increase renewable energy generation. He pointed to DC’s Clean Energy law which mandates DC reach 100% renewable energy by 2032 including 10% from locally-generated solar power.
Multiple board members said they understood the severity of the climate crisis, but at the same time, they simply weren’t willing to tolerate the level of visual intrusiveness it involved. “I am in favor of sustainability,” said Gretchen Pfaehler, but “this detracts from the slope of the roof.” Chris Landis said “I realize that we are in crisis… But I just have this vision of a row of houses with solar panels on the front of them and it just — it upsets me.”
HPO changes the guidelines
For years, the presevation office has been working on a document outlining guidelines for integrating sustainability and historic preservation. The drafts extol the fact that reusing an existing building is greener than tearing it down and building a new one. But early drafts also said that green features like rain barrels, green roofs, and solar panels shouldn’t be visible from the street at all.
Slowly, with successive drafts, HPO has revised its language to be more tolerant of sustainability features, but stopped short of actually allowing solar panels on the most visible front of a roof in most cases. Following the Preister case and pressure from inside and outside the government, that has changed.
A press release from the DC government says the newest version of the guidelines “allow for solar on front facing sloped roofs if they are compatibly designed with low-profile panels set flush with and in a complementary color with the roof.” It quotes Mayor Muriel Bowser in saying, “By streamlining the ability to install solar and other green infrastructure in our historic neighborhoods, we are aiming to make Washington the healthiest, greenest, and most livable city in the country.”
The guidelines themselves aren’t quite so explicit. The relevant sections say:
4. For buildings with sloped roofs, locate solar installations on secondary elevations to minimize their visibility from public street view. If visible from public street view, use low-profile panels set flush with the roof and in a complementary color with the roof finish to avoid a discordant appearance.
5. If it is necessary to install panels on a primary elevation to achieve solar efficiency, installations should be pulled away from roof edges and ridges, compositionally balanced on the roof, and not result in irregular “saw-tooth” compositions. Use low-profile panels set coplanar and flush with the roof, and panel and panel frames that match the color of the surrounding roof. The use of a solar skin or solar shingles that match the texture and appearance of the roof is encouraged.
It sounds that the preservation office still would really rather people not put panels on the fronts of their roofs. It’s not clear what “if it is necessary” to — will the preservation office argue with homeowners about whether it is necessary? Will the board be asking applicants to prove necessity?
Or, is it just that this will be allowed if the front face is the side of the roof with the most sun (so, for instance, people with north-facing houses with sloped roofs can’t put low-performing panels on their north roofs, but for south-facing houses, that’s fine).
This reflects common practice in documents coming from the preservation office, which will readily tell people what they can’t do but never say “you can do this.” At best, they will say, essentially, that a homeowner isn’t not allowed to do something.
In fairness, the preservation office is in fact often quite flexible at working with property owners, and allow a fair amount of development or changes to historic buildings. They simply resist, to the bitter end, ever explicitly writing down that something is okay. They prefer to have applicants bring ideas and then they will discuss. The problem is that leaves homeowners in the dark about what is and isn’t okay, and more at the whims of whether neighbors choose to oppose or support.
Ask the preservation office to be more clear
It’s terrific that the preservation office is allowing solar panels. They should go one step further and clearly say so, period. For instance, it could say “Solar panels may be located on primary elevations if they are south-facing, provided they use low-profile panels.”
Forcing homeowners to set panels away from the edges will reduce the potential for solar generation and seems unnecessary. There will and can be differences of opinion on whether seeing the undersides of panels is so anathema to a historic district, but this kind of thing only makes the panels a little bit more expensive instead of truly cutting down on the power they can create.
They should also allow HPO staff to approve front-facing panels without forcing homeowners to go to a full board meeting. (I’d even more prefer that DC law state that solar panels which don’t damage the roof underneath aren’t subject to historic review at all, but of course the preservation office and board would never voluntarily limit their ability to control anything.)
Author: Robert Walton Published: 11/4/19 Deep Dive
As the United States’ electric system becomes more distributed, security experts say the growing array of internet-connected sensors and industrial control systems presents a potential vulnerability that is not clearly understood and could be exploited to cause blackouts.
So far, utilities have kept hackers from disrupting the grid and Critical Infrastructure Protection (CIP) standards have helped to keep defenses robust. But the attack surface is only growing.
“[W]e cannot pretend that standards themselves equate to security.”
Scott Aaronson
VP of security and preparedness, Edison Electric Institute
“Regulations and standards and associated penalties are important,” Scott Aaronson, vice president of security and preparedness for the Edison Electric Institute (EEI), told Utility Dive. “But we always look to go beyond simply having standards. They have a role … but we cannot pretend that standards themselves equate to security.”
EEI represents investor-owned utilities, and Aaroson said that as more distributed resources come online it is vital they are operated in coordination with utilities and allow for sufficient visibility.
“As soon as you interconnect with the grid in any two-way [power] flow, now there needs to be some elevated sense of security,” Aaronson said. “And if you then start to aggregate those resources to the level they have an impact on the [bulk electric system], then you really need to have a baseline level of security.”
Security experts agree that the baseline level of security provided by CIP compliance is a starting point and not an end goal.
“It’s critical not to confuse compliance with security,” Sharon Chand, principal with Deloitte Cyber Risk Services, told Utility Dive. The CIP standards set out minimum security requirements for assets critical to the nation’s bulk electric system, she said, which “scopes out a lot of things” utilities control in their operations.
The National Institute of Standards and Technology is seeking technology vendors to help develop solutions to secure the “Industrial Internet of Things,” potentially including sensors, network monitoring, system monitoring, and data acquisition devices related to grid analysis. It’s a welcome effort at a more “holistic” approach to security said Chand.
Because threats are growing more varied and dispersed.
“The GAO report is exceedingly important but unfortunately somewhat late,” Paul Steidler a senior fellow at the Lexington Institute, told Utility Dive. “There’s a real dearth of public information about the dangers of grid attacks.”
Could residential solar pose a vulnerability?
Perhaps the most visible sign of the growth of distributed resources is residential rooftop solar, but could your neighbor’s small array pose a grid threat?
“The thing is, we don’t know and we can’t say for sure,” said Steidler. “But someone is going to try to exploit it.”
The North American Electric Reliability Corporation’s (NERC) CIP standards cover infrastructure critical to the bulk system and that typically means resources under 75 MW won’t be covered, according to Nor-Cal Controls, which provides engineering and training services.
“If I am able to hack into to a single solar array, I can probably disable those. It can have a local impact.”
Sharon Chand
Principal, Deloitte Cyber Risk Services
“It is only in the last two or three years that there’s been enough solar on the grid to impact utilities and grid reliability,” security expert John Franzino wrote in a July 2019 blog for Nor-Cal Controls. “Now that we’re having substantial amounts of solar penetration, both the utilities and NERC have to pay more and more attention to solar. They have not caught up with solar yet, but that will change.”
The thing to remember, says Chand, “it’s not about the size of the asset on the grid — it’s about what it is connected to, and what the function of the device is.”
“If I am able to hack into to a single solar array, I can probably disable those. It can have a local impact,” said Chand. “But I probably can’t use that access to make them catch fire or do harm.”
Utilities have pretty good security already, but cracks are showing
Compared with other industries, the utility sector actually does a pretty good job of keeping systems safe but constant improvement will be necessary to maintain security, CyberX Vice President of Industry Security Phil Neray told Utility Dive.
The firm recently assigned a median security score to industries, recommending its clients attain a minimum of 80 points out of 100. The oil and gas sector averaged 74 points; electric utilities averaged 70 points; the manufacturing sector scored 63; and the pharmaceutical and chemical sectors scored 62 points.
“As these smart devices get deployed, they increase the attack surface” of the distributed grid … “Most experts recognize you can’t prevent a determined and sophisticated attacker. They will eventually get in.”
Phil Neray
Vice President of Industry Security, CyberX
“Energy utilities are ahead of the other industrial sectors in terms of paying attention to security and eliminating vulnerabilities,” Neray said. The advantage is due to the widespread security regulations in place, he said, though “the regulations don’t really go far enough.”
Some utilities are using outdated operating systems and unencrypted passwords the firm’s “2020 Global IoT/ICS Risk Report” concluded. Two thirds of sites the report monitored lack automatic antivirus updates.
“As these smart devices get deployed, they increase the attack surface” of the distributed grid Neray said. “Most experts recognize you can’t prevent a determined and sophisticated attacker. They will eventually get in.”
Industrial control devices increasingly targeted
The industrial control systems and sensors used to operate and gain visibility into distributed resources are increasingly being targeted. In the past, these systems were relatively unknown. “Security by obscurity,” Neray calls it. Control systems had specific functions and were often unconnected to other systems, making attacks less likely and more difficult.
Companies are adding sensors and embedded devices to control networks, said Neray, in order to monitor operations and boost efficiency. Those operating systems are increasingly connected to corporate internal tech systems, to transfer data.
Network-level monitoring is the only way to manage security on some of these devices, he said, but there are no regulations requiring it.
“In a sense, utility control and security teams are blind,” Neray said.
The threat from inside
Russia, China and North Korea are the actors commonly thought to threaten the United States’ electric grid. But security experts warn the most disruption could be caused if a hacker is able to get some help from the inside of a utility.
A report from the U.S. Department of Energy last year identified more than a half dozen “capability gaps” in the power sector’s defenses, including supply chain and trusted partner issues.
“Internal threats from inadvertent human error and disgruntled employees and contractors pose a far great cyberthreat to the critical infrastructure than a nation-state.”
Eddie Habibi
CEO and Founder, PAS Global
“The electric utility industry, and the IT consultants that serve it, cannot forget the human element in cyberattacks,” said Steidler. “A bad actor on the inside can do damage and/or collaborate with outside attackers. It is critical to have proper and thorough background checks on those leading the fight to prevent cyberattacks.”
Eddie Habibi, CEO and founder of cybersecurity firm PAS Global, said enhanced background checks for critical private sector employees would be a good step to improve security.
“Internal threats from inadvertent human error and disgruntled employees and contractors pose a far great cyberthreat to the critical infrastructure than a nation-state,” Habibi told Utility Dive in an email.
Utilities will have a chance to work closely with supply chain partners in a couple of weeks, when NERC holds the biennial GridEx simulation. This will be the fifth GridEx event, which has grown to encompass thousands of participants.
The exercise, a simulated grid attack, gives utilities the opportunity to test their response plans. But an assessment of the 2017 event concluded none of the utilities participating in that year’s exercise turned to vendors for help or information. In response, NERC recommended a focus on communication and coordination in the 2019 event, including broadening the involved stakeholders and developing processes for sharing critical information.
NERC officials are keeping a tight lid on the GridEx V scenario details, but spokesman Martin Coyne told Utility Dive that “each entity looks at its plans, infrastructure and unique aspects of its systems, which increasingly includes distributed energy resources.”
While standards and security requirements can help make the grid safer, the real work must be done by utilities say experts.
“The problem is not the standards, it’s more the implementation,” Steidler said. “Standards have to be continually evolved and they’re not going to be perfect.”
“It’s a constant process to keep regulations up to date, responding to innovations and advanced threats. CIP requirements do a good job in terms of minimum protection,” Deloitte’s Chand agreed.
But there is disagreement on how to handle grid participants who do not meet those standards.
“Utilities are image-conscious and frankly the fines for grid violations are not that expensive … There needs to be some pain; you need a punitive aspect to encourage the best behavior.”
Paul Steidler
Senior Fellow, Lexington Institute
Currently, entities that violate cybersecurity standards are not publicly named by NERC or the Federal Energy Regulatory Commission, though there is a proposal to change that. Under the proposal, NERC would include a public cover letter with each notice that discloses the name of the violator,the reliability standards violated and the amount of penalties assessed.
Steidler said the move is a step in the right direction. He called for not just naming violators but also increasing penalties.
“The mere fact there is no public embarrassment for a utility that is slipshod in its practices is quite alarming,” he said. “Utilities are image-conscious and frankly the fines for grid violations are not that expensive. It’s a modest cost of doing business. There needs to be some pain; you need a punitive aspect to encourage the best behavior.”
The utility sector sees this a bit differently, though there is broad agreement on the need for greater security. But EEI’s Aaronson said it is possible that naming violators in combination with other data could actually give a hand to would-be attackers.
“Generally speaking, the naming of a violator in and of itself is not problematic,” Aaronson said. But when that information is combined with other data points, it can help attackers design new exploits or identify patched weaknesses.
“I would much rather keep adversaries in the dark,” Aaronson said. “It’s a new world order. We are living in a time when adversaries are taking advantage of our transparency.”
The Nov. 4 agreement, filed in the Supreme Court of the State of New York, requests that Walmart’s complaint be “voluntarily discontinued without prejudice.”
Walmart had accused Tesla of “gross negligence” and requested the company deenergize more than 240 solar systems at its stores. According to a statement from the companies addressing the settlement, the solar arrays will continue operating in place.
Dive Insight:
With the lawsuit settled, Walmart and Tesla will now go about reenergizing the solar systems that were taken offline. The retailer is aiming to supply 100% of its energy from renewables eventually, but currently uses around 24%.
Walmart says it has more than 300 renewable energy projects in operation or under development worldwide, and in the U.S., the company says it is the largest on-site green power generator.
So far, the company has leaned on Power Purchase Agreements to grow its renewable footprint. “We are still exploring direct investment in projects — an ownership model — that meet the company’s financial requirements,” Walmart said in a document explaining its approach to renewables.
In its lawsuit, Walmart claimed Tesla solar panels sparked fires at at least seven stores in 2018. The retailer accused Tesla of “gross negligence,” and claimed the company failed to follow “prudent industry practices” in installing, operating and maintaining its solar systems.
The lawsuit was filed this summer around the same time Tesla “relaunched” its flagging solar division. The company rolled out a plan to rent rooftop panels to homeowners in six states, starting at $50/month for a 3.8 kW system.
Tesla bought SolarCity in 2016, when it was the leading solar installer in the United States. The company’s market share has sagged since the deal, however.
Power outages have disrupted operations at several of the nation’s airports.
To provide a more reliable source of power, or a better backup system, airports are turning to new power sources.
Pittsburgh International Airport plans to become the first major U.S. airport to create a self-sufficient energy system, or microgrid.
It will use solar and natural gas sources from its own property.
Aerial view of the Pittsburgh International Airport
Source: Pittsburgh International Airport
Should airports go off the grid? Pittsburgh International Airport — and others — think so.
Remember that 11-hour power outage at Hartsfield-Jackson Atlanta International Airport in December 2017 that canceled hundreds of flights, stranded thousands of passengers and costDelta Airlines alone an estimated $50 million in lost business?
Since then power outages linked to everything from equipment failures, faulty wires and an explosion at an electric power station have disrupted operations at Ronald Reagan Washington National Airport, Los Angeles International Airport, New York’s LaGuardia Airport, John Wayne Airport in Orange County, California, Philadelphia International Airport and McCarran International Airport in Las Vegas.
And just last Saturday, power at Louis Armstrong New Orleans International Airport went out — twice — due to high winds associated with Tropical Storm Olga. In addition to flight cancelations and delays, a celebratory open house for the new $1 billion terminal opening Nov. 6 had to be postponed by a few hours.
Microgrids to the rescue
During power outages at airports, generators and other forms of back-up power usually kick-in to power essential emergency lighting, but boarding, deplaning, airfield activity and the business of the airport often comes to a standstill.
Pittsburgh International Airport: rendering of the solar farm for microgrid.
Source: Pittsburgh International Airport
That’s just one reason Pittsburgh International Airport recently declared its intention to become the first major U.S. airport to create a self-sufficient energy system, or microgrid, using only energy sources — solar and natural gas — from its own property.
“After watching what happened in Atlanta and Los Angeles, I think every airport CEO across the country, and probably around the world, wondered if they were ready and prepared,” said Christina Cassotis, CEO of the Allegheny Airport Authority, which operates the Pittsburgh airport. “Here the answer is yes, but we’d like to make sure we can continue to operate in any circumstance.”
To that end, Pittsburgh International Airport plans to have its microgrid in place by 2021 to power the entire airport, including the airfield, the on-site Hyatt hotel and a Sunoco station.
Veolia operator inside TWA Hotel microgrid plant
Source: Christophe Majani-D’Inguimbert | Veolia North America
Power for PIT’s microgrid will be generated through the airport’s onsite natural gas wells and almost 8,000 solar panels covering eight acres of the airport land. A connection to the traditional electrical grid will remain, but only as an option for emergency or backup power when needed.
“It has everything to do with resiliency and redundancy,” said Cassotis. “We wanted to make sure we could do everything with the assets we have to enhance the safety of the traveling public and insure continued operations. As a bonus, we get to lower the cost of energy.”
PIT airport officials project an energy bill savings of $500,000 in the first year of the project alone. In addition to lowering its energy costs, the airport also will receive annual lease payments from Peoples Natural Gas through the project.
Many military facilities, college campuses, hospital complexes, industrial parks and other large institutions already have some sort of microgrid in place to insure uninterrupted power. In general, these systems are connected to existing grids but can disconnect and operate on their own with power from batteries, diesel-powered generators or, ideally, solar or another source of renewable power, said Craig Schiller, a manager specializing in aviation at the global energy nonprofit Rocky Mountain Institute.
While Detroit Metro Airport already has a microgrid in place, airports in Los Angeles, Denver, San Diego, Boston, Orange County, California and elsewhere are now exploring and creating microgrids as well.
Early next year, RMI will be publishing an airport microgrid toolkit funded by a $450,000 grant from the National Academies of Sciences, Engineering and Medicine’s Transportation Research Board to help speed the process.
Microgrids can give airports greater control over the energy they need and use and, in many cases, save airports money on energy costs, said RMI’s Schiller. “But the bottom line is maximizing an airport’s ability to meet its function.”
Airports not only fuel the economic vitality of a community, but in an emergency, an airport with its own power grid can become a critical community asset.
“99% of the time customers won’t notice whether an airport is using its microgrid resources or not,” said Schiller. “But if there’s a local, regional or natural disaster, the airport will be able to provide people a place to go or a way to get out of the city.”
Airport hotel with a microgrid island
Most microgrids are designed to connect to existing power grids. But the 512-room TWA Hotel and conference center opened in May 2019 in the landmark Eero Saarinen-designed TWA Flight Center at John F. Kennedy International Airport’s Terminal 5 is an “islanded microgrid” operating independent of New York City’s electric grid.
TWA hotel lobby bar
Christophe Majani-D’Inguimbert | Veolia North America
The hotel has its own 9,000-square-foot microgrid/cogeneration power plant on the roof, fueled by natural gas.
The plant generates all the electricity for the hotel campus and harvests waste heat from engines for hot water and other uses. A battery storage system helps with peak loads and backup.
“Think of it as a Tesla on the hotel’s roof,” said Tyler Morse, chief executive of MCR/Morse Development.
“The entire city and the airport could be down, but the hotel would still be operating, with people having cocktails at the bar,” said Mike Byrnes, senior vice president for Veolia North America, which has operators on duty 24/7 to operate and maintain the hotel’s microgrid.
Beyond ensuring that cocktails can continue to be served during a blackout, the TWA Hotel’s power plant will also contribute to the business’ bottom line.
Hotel developer Morse said the Con Edison electric bills would have cost $5 million per year.
“The $15 million we spent to build the plant will be paid back in three years,” said Morse. “And we’ll be saving $4 million annually.”
Which should be enough to buy everyone a round of drinks, or three, in the lobby bars in the next New York City blackout.
WATCH NOW
VIDEO02:20
Microgrids have a big role to play in the energy sector: Here’s why
Author: Adam Popescu Published: 11/3/19 Bloomberg Businessweek
For decades, scientists have sought an affordable and effective way of capturing, storing, and releasing solar energy. Researchers in Sweden say they have a solution that would allow the power of the sun’s rays to be used across a range of consumer applications—heating everything from homes to vehicles.
Scientists at Chalmers University of Technology in Gothenburg have figured out how to harness the energy and keep it in reserve so it can be released on demand in the form of heat—even decades after it was captured. The innovations include an energy-trapping molecule, a storage system that promises to outperform traditional batteries, at least when it comes to heating, and an energy-storing laminate coating that can be applied to windows and textiles. The breakthroughs, from a team led by researcher Kasper Moth-Poulsen, have garnered praise within the scientific community. Now comes the real test: whether Moth-Poulsen can get investors to back his technology and take it to market.
The system starts with a liquid molecule made up ofcarbon, hydrogen, and nitrogen. When hit by sunlight, the molecule draws in the sun’s energy and holds it until a catalyst triggers its release as heat. The researchers spent almost a decade and $2.5 million to create a specialized storage unit, which Moth-Poulsen, a 40-year-old professor in the department of chemistry and chemical engineering, says has the stability to outlast the 5-to 10-year life span of typical lithium-ion batteries on the market today.
Moth-Poulsen with a small sample of his molecular solar thermal liquid.
PHOTOGRAPHER: OSCAR MATTSSON/CHALMERS UNIVERSITY OF TECHNOLOGY
The most advanced potential commercial use the team developed is a transparent coating that can be applied to home windows, a moving vehicle, or even clothing. The coating collects solar energy and releases heat, reducing electricity required for heating spaces and curbing carbon emissions. Moth-Poulsen is coating an entire building on campus to showcase the technology. The ideal use in the early going, he says, is in relatively small spaces. “This could be heating of electrical vehicles or in houses.”
A big unknown is whether the system can produce electricity. While Moth-Poulsen believes the potential exists, his team is focused for now on heating. His research group is one of about 15 trying to tackle climate change with molecular thermal solar systems. Part of what motivates them is the Paris Agreement, which commits signatories to pursue efforts to limit global warming to 1.5C (2.7F).
Moth-Poulsen plans to spin off a company that would advance the technology and says he’s in talks with venture capital investors. The storage unit could be commercially available in as little as six years and the coating in three, pending the $5 million of additional funding he estimates will be needed to bring the coating to market. In May he won the Arnbergska Prize from the Royal Swedish Academy of Sciences for his solar energy projects.
The professor doesn’t have precise cost estimates for the technology but is aware that it will need to be affordable. One cost advantage is that the system doesn’t need any rare or expensive elements. Jeffrey Grossman, a professor in the department of materials science and engineering at the Massachusetts Institute of Technology who’s also developing energy storage molecules, calls the Chalmers University team’s work “crucial if we want to see this energy conversion storage approach commercialized.”
Peter Schossig, who runs the Fraunhofer Institute for Solar Energy Systems in Freiburg, Germany, says he wants to help turn the Swedish team’s research into a product. But, he says, “There’s still a ways to go.”
Author: Robert Walton Published: 11/4/19 Utility Dive
New details of a denial-of-service attack earlier this year show an energy sector with uneven security.
A March 5 cyberattack of U.S. wind and solar assets is back in the news, with fresh documents helping shed light not just on the extent, but also the simplicity of the first-of-its-kind intrusion. Cybersecurity experts say it reveals a utility sector not sufficiently vigilant, and failing to employ the most simple fixes.
Owned by AES and AIMCo, sPower bills itself as the United States’ largest private owner of operating solar assets. Though there was no loss of generation, the March cyberattack impacted the company’s visibility into about 500 MW of wind and PV across California, Utah and Wyoming.
Security experts say the attack is a wake-up call for the electric sector and a sign that clear vulnerabilities remain.
“The news begs a bigger question about cybersecurity regulations for the energy industry,” Phil Neray, vice president of security firm CyberX, said in an email. “The manner in which it was carried out was very basic — exposing some essential weaknesses in the way energy companies currently patch and monitor their network devices.”
Utilities must do basic security maintenance
CyberX released a report last month that concluded utility networks and unmanaged devices are “soft targets for adversaries.” Many utilities use outdated operating systems and unencrypted passwords that leave them vulnerable, the firm found.
That means in some instances utilities are not even maintaining the most basic of protection: keeping systems up to date.
“The simplicity of this attack should make generators sit up and take notice.”
Jason Haward-Grau
Chief information security officer, PAS Global
Neray said the grid is made vulnerable by network appliances like the ones that were compromised in the attack on sPower: directly exposed to the internet, unpatched and with limited malware capabilities. “We’ve seen attackers go after unpatched network devices in the past,” he said.
The March 5 attack is “one more example …. that cyber risk in the industrial space is not only real, but operant,” Jason Haward-Grau, chief information security officer at cyber firm PAS Global, said in an email.
“The simplicity of this attack should make generators sit up and take notice,” Haward-Grau said. “This was a ‘simple’ IT attack on an unpatched firewall, which was still vulnerable, in spite of the patch being available.”
%20of%20west-monroe-partners-wmp-logo.png){kind=logo}
%20of%20utility_black.png){kind=small}
Odogwu Obi Linton was appointed to the Maryland Public Service Commission in August 2017 after serving for almost nine years as the Commission’s Director of External Relations and Retail Market Development. In that capacity he managed consumer relations and dispute resolutions and led the Commission’s efforts in creating new regulations for consumer protections and theft of energy, consumer education and customer choice, and supplier diversity. He has served the Commission in an advisory capacity on utility consumer and deregulated market matters and is the Founding Chair of the Utility Marketplace Access (now Supplier and Workforce Diversity) Staff Subcommittee for the National Association of Regulatory Utility Commissioners (
What’s New? 
.forEach%2520is%2520not%2520a%2520function&errstack=TypeError%253A%2520document.querySelectorAll(...).forEach%2520is%2520not%2520a%2520function%250A%2520%2520%2520%2520at%2520%253Canonymous%253E%253A39%253A70%250A%2520%2520%2520%2520at%2520%253Canonymous%253E%253A44%253A2%250A%2520%2520%2520%2520at%2520HTMLHeadElement.nrWrapper%2520%255Bas%2520appendChild%255D%2520(%253Canonymous%253E%253A2%253A16539)%250A%2520%2520%2520%2520at%2520Object.mps._append%2520(https%253A%252F%252Fmps.cnbc.com%252Ffetch%252Fext%252Fload-cnbc-web.js%253Fnowrite%253D2%253A295%253A50)%250A%2520%2520%2520%2520at%2520Object.mps._ext.mpsOnReady%2520(https%253A%252F%252Fmps.cnbc.com%252Ffetch%252Fext%252Fload-cnbc-web.js%253Fnowrite%253D2%253A1206%253A11)%250A%2520%2520%2520%2520at%2520https%253A%252F%252Fmps.cnbc.com%252Ffetch%252Fext%252Fload-cnbc-web.js%253Fnowrite%253D2%253A1238%253A18%250A%2520%2520%2520%2520at%2520HTMLDocument.j%2520(https%253A%252F%252Fmps.cnbc.com%252Ffetch%252Fext%252Fload-cnbc-web.js%253Fnowrite%253D2%253A135%253A117)%250A%2520%2520%2520%2520at%2520HTMLDocument.nrWrapper%2520(%253Canonymous%253E%253A2%253A16539)){kind=small}
