In the United States, Consolidated Edison's New York (Brooklyn-Queens) Neighbourhood Programme is one of the world’s most successful, innovative, groundbreaking grid-edge utility solutions for breaking the old ‘build a new power station’ model. It was unveiled several years ago and has managed to defer a $1.2 billion substation upgrade by contracting for 52 MW of demand reductions and 17 MW of distributed energy resource investments.
As well as generating electricity, with rooftop or community-scale solar PV, distributed energy resources (DER’s), such as energy storage systems and demand response measures can also control loads as they are directly interconnected to low-voltage electric distribution systems. When DER’s are engaged to provide power on the grid that would have otherwise required a new power station, which require ‘wire-and-pole’ transmission, they become non-wire solutions (NWS). The implications of non wires solutions for emission reductions are huge. An increase in NWS translates to an increase of DERs deployed on the grid, offering significant carbon emissions reductions, both direct and indirect.
Last year, on 12th December, the Rocky Mountain Institute (RMI) launched its new Non-Wire Solutions Implementation Playbook to provide a roadmap for rapid NWS deployment and provide practical guidelines to help regulators support NWS, and also help utilities integrate NWS into their operations.
REM spoke to Jason Prince from RMIs Electricity team to find out more.
Can you explain the concept of ‘non-wires’ solutions?
Non-wires solutions (NWS) are applications of distributed energy resources (DERs) in specific locations that defer or eliminate the need for investment in traditional ‘wires-and-poles’ infrastructure. NWS therefore represent a promising tool in electric system planner’s toolkits that allow grid deficiencies to be addressed by innovative DER portfolios rather than business-as-usual and more costly utility capital expenditures.
For reference, DERs included in NWS projects can encompass the range of demand- and supply-side software and hardware resources that generate electricity or control loads to meet energy and reliability needs.
What potential do they offer for the closure of fossil fuel power stations (both coal and gas) and the resultant saving of greenhouse gas emissions?
NWS are about the opportunity to invest in DERs that are more flexible, lower-cost, and can provide a greater range of value than traditional ‘wires-and-poles’ capital infrastructure. The value associated with deferring distribution investment becomes an additional component of a DER’s “value stack”—and can make more DER projects viable. By capturing this additional value, NWS could increase the market size of DERs by about 6% and lead to nearly 300 tons of CO2 reduction over the next 20 years. For more on how DERs can outcompete traditional generation such as coal and gas fired power plants, see our report “The Economics of Clean Energy Portfolios.”
Do they have any other benefits besides closure of power stations and emissions reductions? (e.g. financial, benefits to utilities)
Absolutely. Since NWS are typically only pursued if more cost-effective than alternative infrastructure solutions, they should lead to lower costs for ratepayers. Furthermore, NWS mitigate the risk of large, stranded infrastructure investments made based on uncertain forecasts because they are modular, flexible solutions. They also provide opportunities for utilities to test new business models and deepen engagement with customers and technology companies. Lastly, NWS provide opportunities for job creation in rapidly evolving DER markets, and for local economic development via engagement of customer-sited resources.
How far has this process gone in the US?
At the beginning of 2018 there were over 100 non-wires solution projects at various stages of implementation across the US. Although national markets for NWS remain relatively nascent, several states mandate NWS consideration in utility planning, and many more may soon move in this direction. For example, as an important part of integrated planning efforts, we expect that NWS will be increasingly relevant for the 42 states across the US that have been pursuing various grid modernization efforts.
How far could it be applied in Europe? And what progress has been made in Europe with this, if any?
All the lessons learned from NWS experience in the US can be applied to Europe. Fundamentally, NWS are about optimal utility investment in transmission and distribution infrastructure. European regulators and utilities can thus readily integrate NWS into planning processes to ensure least-cost provision of reliable electric service. While there do not seem to be many European case studies to-date, as more US experience is gained, the lessons learned can more easily be applied internationally.
What is this doing to the ambitions of Trump to bring back coal?
Coal is not coming back because it is uneconomic. By emphasizing cost-effective solutions, NWS help support the pragmatic allocation of capital to DERs rather than coal. For example, to address generation constraints in a particular area, a portfolio of geo-targeted energy efficiency, demand response and battery storage could be incrementally deployed instead of a new coal plant that would inevitably lock in increased costs for ratepayers.
What are the main barriers to implementation?
Traditional regulatory frameworks based on cost-of-service need to change because they incentivize capital expenditures and discourage cost-saving through NWS deployments. Once utility incentives are aligned with ratepayer interests then the value proposition of NWS become a clear ‘win-win’. As utilities pursue NWS, the key issue becomes lack of experience with such innovative procurement. Internal utility processes can be re-organized to ensure holistic consideration of potential solutions to grid needs though, and when NWS are deemed suitable, NWS-friendly procurement strategies (e.g. technology agnostic, data-intensive needs descriptions, active stakeholder engagement) can be pursued to encourage optimal market proposals.
How is the Rocky Mountain Institute helping with this?
Given the nascence of the market, we wanted to distil the best practices and provide practical guidelines for utilities to start implementing NWS. We drafted the NWS Implementation Playbook after interviewing 65+ stakeholders so that we could offer a clear path forward for regulators, utilities and developers to accelerate deployment. Apart from the Playbook, we’re working with stakeholders across the country to support the adoption of the lessons described in our report in ongoing procurements.
For additional information:
Rocky Mountain Institute Non-Wires Solutions Implementation Playbook
