AUBURNDALE, Mass. — Commercial demand is supplanting state policy as the driving force behind deployment of renewables, whose costs are declining in every category, participants at the Northeast Energy and Commerce Association (NECA) Renewable Energy Conference heard last week.

“You will see, maybe not so much yet in New England, but you will see across North America, customers are buying renewable energy,” Brattle Group principal Judy Chang said Thursday.

States drove renewable energy adoption in the very beginning, “but now we’re really seeing customers, particularly large commercial and industrial customers, directly signing up contracts for renewable generation — and some of those come with storage,” Chang said.

“Change” is the watchword, according to Stephen J. Rourke, ISO-NE vice president for system planning, who said he’s seen more change in the past year than in his whole 40 years in the industry.

“One way to get a sense of what’s headed our way next, when you think about the resources that are going to come forward, is to look at the [interconnection] queue,” Rourke said. “If you followed our queue from roughly 2005 to 2017, we had 12,000 to 14,000 MW in our queue, three-quarters of it natural gas. The rest of it was wind and a little bit of something else.

“If you look right now, we have over 20,000 MW of generation in our queue, and 85% of it is either wind, solar, batteries, hydro, biomass or fuel cells,” he said. “The 15% that’s left over is natural gas, so what resource developers are saying to us … is these are the resources that are coming forward … and this has changed dramatically since just 2017.”

Big Projects for Big Goals

Richard Stuebi, president of Future Energy Advisors, said that renewables accounted for 10% of New England’s generation in 2018, so that if the region and New York want to achieve their ambitious environmental goals, “we need to start doing it now.”

Moderating a panel discussion, John Dalton, president of consultancy Power Advisory, asked whether the 100% carbon-free or renewable power goals in Massachusetts and New York were attainable at all.

“Large-scale renewables like solar and wind are a primary reason the state is able to achieve these lofty goals,” said Doreen Harris, director of large-scale renewables for the New York State Energy Research and Development Authority. “The last two years alone have brought about incredible cost reductions and competition from these resources. In 2017 and 2018, New York awarded agreements for long-term contracts for 46 different large-scale projects, and at prices over 20% less than those received just two years ago.”

Gov. Andrew Cuomo in January vaulted New York ahead of other states by pledging to secure 70% of electricity from renewables by 2030 and to achieve carbon-free electricity by 2040, while nearly quadrupling its offshore wind energy goal to 9 GW by 2035. (See New York Boosts Zero-carbon, Renewable Goals.)

New York is in the midst of reviewing 18 proposals from four developers responding to its first offshore wind solicitation issued last November seeking 800 MW or more of offshore wind. The state expects to award contracts in April, Harris said. (See Four Bidders Vie for NY Offshore Wind Project.)

Harris noted the “very interesting areas of regional overlap” among the lease areas capable of serving multiple markets from New Jersey north to New York, Connecticut, Rhode Island and Massachusetts.

“Big 100% renewable or carbon-neutral goals are attainable; it’s just a matter of how much you’re willing to spend to get there,” Chang said.

Emily Green, staff attorney with the Conservation Law Foundation, said Maine Gov. Janet Mills’ new renewable energy goals of 80% by 2030 and 100% by 2050 are attainable.

“Clearly it’s a very aggressive goal, calculated to fulfill Gov. Mills’ campaign pledge to establish Maine as a leader on clean energy,” Green said. “If you look at the technical potential in the state of Maine, our solar developers would really like to tell us that the state is 33% sunnier than Germany, the global leader in solar development. In terms of offshore wind, we rank seventh in terms of technical potential, so I think the resources are there.”

Transmission Issues

David Wilby, president of Maine-based consulting firm Wilby Public Affairs, said that if asked to rank the challenges to developing large-scale renewables, “I’d rank the top three as transmission, transmission, transmission.”

Dalton asked about the potential for regional cooperation in developing offshore wind transmission.

Transmission is “an existential issue” for onshore wind, Wilby said, but getting regional cooperation for offshore wind transmission, though not easy, “probably could be done in a limited way.”

“In some cases, we just have to do better together as stakeholders as part of ISO New England and New York ISO,” said Melissa Kemp, director of policy for the region for Cypress Creek Renewables.

“Right now, something like over 50% of distribution-level solar projects and storage projects in Massachusetts are on hold,” Kemp said. “There’s absolutely no clarity about how those will be studied; there’s been no process set up ahead of time for ISO-NE transmission coordination with the distribution-level companies. That’s just not OK … that’s a crisis.”

Offshore wind comes with its own set of transmission challenges, and New York “is seeking a bundled product in the sense that we’re looking for generation and transmission, and we’re paying for it in one associated contract,” Harris said.

“The proposals that we received, in several cases the leaseholder actually partnered with a transmission company for delivery into New York,” Harris said. “It might have been conceivable to think about radials when you’re talking about 2,400 MW of offshore wind, but when you’re thinking about 9,000, obviously that’s a very different ballgame from the perspective of scale and points of interconnection.” (See Vineyard, Anbaric Team on 1,200-MW Offshore-Tx Proposal.)

Storage and Hybrid

Distributed storage will continue to be a significant part of the region’s installation base, said Jason Burwen, vice president of policy for the Energy Storage Association.

“You’re going to see a significant fraction of deployment coming onto distribution systems … and the duration of these assets getting longer,” Burwen said.

The story, he said, is the decline in costs, precipitous and somewhat unprecedented in the history of energy technologies at bulk scale, with 8 to 10% declines in installed costs from year to year.

All the storage in the country amounted to 1,200 MWh in 2017, while today a single facility planned to go online in California next year will have the same 1,200-MWh capacity, Burwen said.

“That gives you a sense of how the order of magnitude of the amount of storage coming onto the system is changing, as well as the size of these projects,” he said.

Aside from its known benefits of providing flexibility and balance on the grid, “you’re going to see storage used for congestion avoidance and curtailment avoidance, and that becomes particularly important at much higher levels of renewables, whether that’s in more localized systems for congestion, or on a more systemwide basis for the curtailment issue,” he said.

“Adding storage to our assets across the country is the lowest-hanging fruit,” Kemp said. “In the Northeast … the first and easiest entry point has been the distributed market … relatively straightforward, predictable revenue streams for adding storage to various sizes of distributed assets.”

But there is still work to do on the wholesale market side, Kemp said, citing the ISO/RTO filings in December on Order 841 implementation to allow for greater market participation by storage resources. (See RTOs/ISOs File FERC Order 841 Compliance Plans.)

“There are a lot of problems there,” Kemp said. “I think Order 841 from FERC symbolically looks great, but … we’re not there yet. In New York, there’s discussion about dispatch, whether that has to be controlled by the ISO because of software constraints. … ISO-NE is in some ways simpler because they have the Pay-for-Performance.”

The Pay-for-Performance program took effect last June to replace the RTO’s Winter Reliability Program, increasing financial incentives for resource owners to make investments to ensure reliability and responsiveness during periods of scarcity.

— Michael Kuser