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Cleveland port’s ‘electrification hub’ expected to anchor progress toward net-zero emissions
May 10, 2024

The Port of Cleveland is going electric.

One of the Great Lakes’ largest shipping ports is transforming part of a large warehouse into an “electrification hub” to anchor its emission-cutting efforts in the coming decades.

The project is among the Cleveland-Cuyahoga Port Authority’s first steps toward its goal of net-zero emissions for its own operations by 2050. The target does not include “Scope 3” emissions from the ships, trains, and trucks that come and go from the port, but officials hope the upgrades will support their emissions cuts as well.

“Upgrading the electric feed into the terminal is not the most exciting thing,” said Carly Beck, the port’s senior manager for planning, environment and information systems, but it’s a necessary foundation for all other parts of the port authority’s climate plan.

Shipping ports are a major source of not only climate emissions but also harmful air pollution for nearby communities. Fossil fuels power most of the cranes, vehicles, and other equipment used to move commodities and consumer goods around the globe. The United Nations estimates that global shipping is responsible for about 3% of emissions worldwide.

The Cleveland-Cuyahoga County Port Authority became the first port on the Great Lakes to announce a net-zero emissions goal when its board unanimously approved its climate action plan last September. In February, the board approved spending $32 million from state and federal transportation grants to modernize the warehouse and make electrification upgrades.

Cleveland’s downtown port on Lake Erie handles about 13 million tons of cargo each year, from steel and iron ore to wind turbine parts and heavy machinery. Most goes to or comes from parts of Ohio and neighboring states via rail or truck.

“Lake Erie … sits at a very important position geographically as part of the Great Lakes,” said Dana Rodriguez, a senior analyst on global shipping at the Environmental Defense Fund.

The Cleveland-Cuyahoga County Port Authority, like many of its U.S. counterparts, is a public entity that owns and maintains infrastructure at the port. It contracts with a commercial operating company, Logistec, to run day-to-day operations.

The port considered multiple approaches for cutting greenhouse gas emissions, including hydrogen power, before deciding to focus its efforts on electrification, Beck said. All told, the port estimates full electrification will require roughly 5 to 7 megawatts of available power, she said. Design work for modernization and the electrification hub at the port’s Warehouse A is underway.

The port also is working with Logistec on a grant application for funds under the U.S. EPA’s Clean Ports Program, set up under the 2022 Inflation Reduction Act. Roughly $2.8 billion in competitive grants are available for deploying zero-emission technology, with an additional $150 million for climate and air quality planning. The application is due May 28.

If successful, the port plans to add 2 megawatts of solar capacity on top of Warehouse A, which will provide a significant chunk of its anticipated electrical needs. Other funds would be used to start acquiring electric equipment for port operations, such as a large forklift.

Electrification plans for the Cleveland-Cuyahoga Port Authority call for eventually replacing fossil-fuel powered equipment, such as this large crane. Credit: Kathiann M. Kowalski / Energy News Network

Over time, the port plans to acquire additional equipment as and when machinery and funds become available, including replacements for a large crane and other material-handling equipment.

“It’s just a matter now of biting off chunks as we can,” Beck said.  Timing for the acquisitions will also depend on when different types of electrical equipment become available, which will involve ongoing review.

Port Authority President and CEO Will Friedman said the electrification push fits with the port’s broader sustainability goals, including reducing water pollution in Lake Erie and managing dredged material more sustainably.

“We’re doing it because it’s the right thing to do. We have a social conscience here,” Friedman said.

The decision also should help the port stay competitive, especially as more companies consider the indirect emissions of their contractors.

“We think that’s going to be the future if you’re part of the supply chain network,” Friedman said, adding that ignoring greenhouse gas emissions really isn’t an option. “All industries are trying to figure out how they can decarbonize, and maritime shipping is certainly a part of that.”

The bigger picture

Decarbonization makes sense for Cleveland and Cuyahoga County in the global scheme of things, said Grant Goodrich, executive director for the Great Lakes Energy Institute at Case Western Reserve University.

“Getting products in and out of Europe and being able to advertise and market that you can do it in a more emissions-friendly manner gives you a competitive advantage,” Goodrich said. The European Union already is pushing for the shipping sector to cut greenhouse gas emissions, and Goodrich expects that will ultimately become important in the American marketplace as well. Cutting greenhouse gases also could help attract more cruise ship business to Cleveland, he added.

The port’s regional nature likely will make some aspects of decarbonization easier. For starters, the port generally does not store fuel for ships on site. Ships typically fill up elsewhere, often from barges, depending on where they believe they can get the best deal, Friedman said. If a ship does need extra fuel while in Cleveland, trucks deliver it.

On the other hand, the Cleveland-Cuyahoga County Port Authority has less bargaining power than some much larger ports on the East and West coasts. That limits its ability to increase fees, which makes grants and other types of funding particularly important.

The Cleveland-Cuyahoga Port Authority’s focus on Scope 1 and Scope 2 emissions is consistent with the goals for a majority of other ports included in a March 2024 report from the Environmental Defense Fund and Arup. However, the report noted, the majority of total port emissions driving human-caused climate change generally are not within ports’ direct control and would fall into Scope 3.

“Action in the broader zone of user and community and industry influence, where impacts are often far greater and where potential benefits are significant, is lacking,” the EDF report said.

The Cleveland-Cuyahoga County Port Authority’s upgrades include planning to provide power for some of those other indirect emissions.

“We don’t want to forget about Scope 3,” Beck said.

She added that the port anticipates offering incentives to encourage ships and others to reduce their emissions.

An example would be for ships to plug into electrical shore power, known as “cold ironing,” instead of running diesel engines while in port. Besides cutting greenhouse gas emissions, the process can also reduce pollution from particulate matter, nitrous oxides, hydrocarbons and carbon monoxide. The port also hopes to encourage independent operators to acquire electric tugboats and similar equipment.

“Port decarbonization is just one key piece of the full decarbonization equation,” said Rodriguez at the Environmental Defense Fund. “It is also up to the trucking and shipping sectors to meet the ports halfway and contribute to the decarbonization efforts. In an effort to reach net zero by 2050, all stakeholders must play their part.”

Colorado co-op cuts ties with Tri-State
Apr 29, 2024

UTILITIES: Colorado’s largest electric cooperative officially splits with Tri-State Generation and Transmission following years of wrangling over the wholesale power supplier’s rates, fossil fuel reliance and limits on local generation. (Greeley Tribune)

ALSO: Arizona regulators reject a utility’s request to exempt its proposed natural gas plant expansion in the western part of the state from environmental reviews. (12 News)

TRANSMISSION: Developers complete construction on the 125-mile Ten West Link transmission line designed to move solar power between California and Arizona. (Inside Climate News)

GRID: PacifiCorp becomes the first entity to formally commit to the California grid operator’s extended day-ahead power market. (RTO Insider, subscription)

SOLAR:

CLEAN ENERGY:

COAL: Wyoming Gov. Mark Gordon plans to sue the Biden administration over rules aimed at reducing power plant pollution, saying it will hasten the demise of the state’s coal industry. (WyoFile)

OIL & GAS:

  • Navajo Nation residents call for more federal and state oversight of an oil pipeline spill cleanup, saying they have lost trust in tribal regulators. (Fronteras)
  • Wyoming and Montana join other states in a lawsuit seeking to overturn the federal Bureau of Land Management’s new methane waste prevention rule, saying it harms oil and gas producers. (WyoFile)
  • A trial begins for a mass environmental injury lawsuit accusing the U.S. military of breaching its duty of care in its handling of a 2021 fuel facility leak in Hawaii that contaminated drinking water. (Associated Press)  

HYDROPOWER: Alaska utilities send their proposed plan for the Eklutna hydropower dam to Gov. Mike Dunleavy after months of debate over the facility’s management. (KTUU)

ELECTRIC VEHICLES:

CLIMATE: Portland, Oregon’s clean energy fund considers investing $50 million in seven school districts to fund solar installations, efficiency upgrades and other emissions reduction and climate change mitigation efforts. (OPB)

Michigan plant aims to ‘change the battery world’
Apr 30, 2024

STORAGE: A company opens the first U.S. long duration, sodium-ion battery manufacturing plant in western Michigan in what officials call a “milestone for the battery industry.” (WWMT)

ELECTRIC VEHICLES: Minneapolis-St. Paul’s regional public transit agency will buy 20 electric buses to put in service by 2026 to help meet emission-reduction targets. (Star Tribune)

GRID: A federal judge upholds a decision to block a land swap needed to complete a major transmission line between Iowa and Wisconsin, creating more uncertainty for the project. (E&E News, subscription)

CLEAN ENERGY:

WIND: North Dakota regulators approve plans for a 200 MW wind project that includes an 18-mile transmission line. (North Dakota Monitor)

PIPELINES: At a North Dakota Republican Party convention, a resolution objecting to the use of eminent domain for carbon capture pipelines falls two votes short. (North Dakota Monitor)

AIR QUALITY: Wildfire smoke helped keep Fargo, North Dakota, on an annual ranking of the 25 worst U.S. cities for short-term particle pollution. (MPR News)

POLITICS: The top GOP candidates for Indiana governor say they would take steps to emphasize coal and reshape the state’s utility oversight board. (Indiana Capital Chronicle)

GRID:

  • Michigan is a national outlier for major power outages since 2000, ranking second only behind Texas in the number of incidents over that period. (Axios)
  • Consumers Energy will install about 1,200 iron utility poles in its Michigan service area as an alternative to wood poles that executives will help curb outages. (WKZO)

BIOGAS:

  • The new owner of an Indiana biogas plant looks to make investments that allow the facility to more efficiently produce renewable natural gas. (WSBT)
  • Local officials table a developer’s plan to produce renewable natural gas from a Wisconsin landfill. (WAOW)

COMMENTARY:

  • Ohio oil and gas regulators ignored reports of contaminated groundwater from drilling that was threatening the public’s health and safety, a columnist writes. (Ohio Capital Journal)
  • Wisconsin lawmakers earlier this year rightly rejected proposals to limit private property owners’ ability to site renewable energy projects on their properties, a clean energy advocate writes. (Capital Times)

In Texas, a fragile power grid struggles to keep pace with industry
May 1, 2024

GRID: Texas’ grid manager increases its forecast for large-scale users from 111 GW to 152 GW — a 37% increase by 2030 that places even more pressure on an already wobbly power grid. (Dallas Morning News)

PIPELINES: Mountain Valley Pipeline officials say cost of the nearly completed project has grown to $7.85 billion, more than $220 million higher than its latest cost estimate in February. (Roanoke Times, Cardinal News)

SOLAR:

WIND: Dominion Energy readies its first batch of monopiles for placement as it begins construction of its offshore wind farm near Virginia. (Virginian-Pilot)

OIL & GAS:

TRANSITION:

  • Louisville Gas and Electric Co. and Kentucky Utilities Co. will replace two aging coal-fired units at a Kentucky power plant with a 645-MW hydrogen-ready gas turbine. (Power)
  • Repurposing retired coal plants with advanced nuclear reactors could offset the economic losses coal-dependent communities are likely to face when facilities shut down, according to a study commissioned by utility regulators and state energy officials. (Utility Dive)

NUCLEAR: Years of delay and tens of millions in cost overruns in Georgia Power’s expansion of nuclear Plant Vogtle will likely push utilities away from such large projects toward small modular reactors, experts say. (E&E News)

UTILITIES:

POLITICS: West Virginia Gov. Jim Justice vows to fight new U.S. EPA rules requiring coal-fired power plants to reduce or capture 90% of their greenhouse gas emissions over the next decade. (West Virginia Watch)

Eversource to slash $500M in Connecticut grid investments
May 3, 2024

GRID: Eversource jabs at Connecticut’s utility commission, saying it hasn’t been “a constructive regulatory environment” and announcing a $500 million decrease in grid investments over the next five years; the governor will reappoint the commission’s chair regardless. (CT Mirror, Hartford Courant, CT Mirror)

ALSO:

  • The New York Power Authority and a transmission developer want to build a $3 billion, 90-mile network of power lines that would connect Westchester, New York City and Long Island using a mix of underground, submarine and overhead cables. (LoHud)
  • An energy developer and Massachusetts’ municipal utilities agency launch a reportedly first-of-its-kind partnership to deploy grid-scale battery storage systems that benefit the agency’s member utilities. (news release)

FOSSIL FUELS:

  • Pennsylvania environmental regulators and a coal plant lose their challenge in a federal appeals court over a U.S. EPA plan to reduce ground-level ozone pollution at coal plants in the state. (E&E News, subscription)
  • Massachusetts lawmakers consider covering environmental remediation costs for leaks or spills from home heating oil tanks, which can be inaccessibly exorbitant for homeowners to pay out of pocket. (WGBH)
  • Residents of a Niagara Falls, New York, home that exploded yesterday report smelling gas before the incident occurred. (WKBW)

FINANCE: A number of Schoharie County towns sue New York state over the constitutionality and fairness of its solar and wind project taxation rules. (CBS 6)

POLICY: Climate advocates and policymakers say the New York Power Authority hasn’t been transparent enough in its planning to comply with the Build Public Renewables Act for anyone to see if the agency is on track to meet its mandates. (Canary Media)

ELECTRIC VEHICLES:

  • Cape Cod and Martha’s Vineyard residents will soon be eligible for e-bike rebates that cover up to 90% of the purchase price, depending on their income level. (Cape Cod Times)
  • New Castle County, Delaware, publishes a sustainability plan that includes adding 22 charging stations, among roughly 200 other climate mitigation measures; public comment forums are underway. (WHYY)
  • In Massachusetts, National Grid kicks off a program to fund up to the entire cost of electric vehicle chargers at multi-family residential buildings. (news release)
  • A large school district in upstate New York adds four electric school buses to its fleet. (WCAX)

WIND: The Brigantine, New Jersey, city council pushes for fellow municipalities and its county board of commissioners to use legal action to fight offshore wind development. (Press of Atlantic City)

SOLAR:

Climate-driven power outages surge
Apr 24, 2024

GRID: Power outages stemming from severe weather across the U.S. have surged 74% in the past decade compared to the decade before, showing another tangible effect of global warming, a climate group’s analysis finds. (Guardian)

ALSO:

OFFSHORE WIND:

ELECTRIC VEHICLES:

  • Tesla reports its profits fell 55% in the first quarter from a year before, citing pressure from hybrid models and other challenges, and saying it’s still moving ahead with cheaper vehicle models expected in 2025. (TechCrunch)
  • General Motors introduces a vehicle-to-home charging system that would allow customers to use their electric vehicle batteries as a backup energy source. (Utility Dive)

AIR QUALITY: Nearly 40% of U.S. residents were exposed to unhealthy levels of air pollution last year, an increase from the year before thanks to wildfires and extreme heat. (Guardian)

HYDROGEN: A U.S. Energy Department advisory committee says the clean hydrogen industry isn’t growing fast enough and needs further federal help to meaningfully help the U.S. reach net-zero emissions by 2050. (E&E News)

PUBLIC LANDS: A wave of new federal rules and plans aim to leverage public lands for clean energy development while protecting vulnerable ecosystems. (Canary Media)

SOLAR:

  • Nearly half of states will have funding for low-income solar for the first time as a result of the Biden administration’s $7 billion Solar for All program. (Canary Media)
  • An Illinois bill has developed into a comprehensive “Solar Bill of Rights” to protect rural electric co-op customers who often face arbitrary and changing rules when seeking to install solar panels. (Energy News Network)
  • Construction begins on what is planned as the largest solar canopy and energy storage project in New York: a 12 MW array with 7.5 MW of storage at a long-term parking lot at John F. Kennedy International Airport. (NYDN)

OVERSIGHT: As Georgia’s regulatory board goes years without elections, a group of Black voters appeal to the U.S. Supreme Court to shift from at-large elections to having each commissioner elected by voters in the district where they live. (Grist/WABE)

PIPELINES: Environmental groups sue to challenge federal regulators’ approval of an extension for the Mountain Valley Pipeline’s spur into North Carolina, arguing the project has changed so much the pipeline should be required to start the permitting process over. (Cardinal News)

Feds plan major Western transmission buildout
Apr 26, 2024

GRID: The Biden administration finalizes a transmission permitting streamlining rule and plans to spend $331 million to add more than 2,000 MW of grid capacity in the West. (Heatmap, news release)

ALSO: California’s grid operator proposes investing $6.1 billion in 26 infrastructure projects aimed at expediting renewable energy project interconnections before 2035. (Reuters)

STORAGE:

SOLAR: A New Mexico company breaks ground on a $50 million solar tracking equipment manufacturing facility near Albuquerque. (Solar Power World)

COAL:

  • A Montana coal mine operator’s lawsuit accuses the federal Bureau of Land Management’s protracted leasing review process of harming the facility’s viability and imperiling 300 mining jobs. (Daily Montanan)
  • Arch Resources says it may have to lay off workers at its Powder River Basin coal mines following first-quarter production declines. (Cowboy State Daily)

POLLUTION: The American Lung Association finds four New Mexico counties have excessively high levels of ozone pollution, including three in oil and gas producing regions. (NM Political Report)

OIL & GAS:

NUCLEAR:

HYDROPOWER:

ELECTRIC VEHICLES:

UTILITIES: Oregon regulators reject consumer advocates’ bid to dismiss Portland General Electric’s requested rate increase, saying the proposal must go through the lengthy review process. (Oregonian)

COMMENTARY: A California columnist celebrates the closure of 21 Western coal plants over the past two decades, but warns that shuttering the 32 remaining facilities may be even more difficult. (Los Angeles Times)

A cheaper, quicker way to upgrade the grid
Apr 17, 2024

GRID: Virtual power plants, dynamic line ratings, and other advanced grid technologies could open up space on the grid for more electricity while staving off the need for costly, time-consuming transmission construction, a new U.S. Energy Department roadmap finds. (Canary Media)

ALSO:

EMISSIONS:

  • The Biden administration will reportedly release as many as four rules next week targeting fossil fuel power generation’s carbon emissions, air pollution and waste. (E&E News)
  • U.S. climate envoy John Podesta announces a new task force aimed at cutting carbon emissions associated with global trade and manufacturing. (Reuters)
  • Improving wastewater treatment processes could save the U.S. $15.6 billion, reduce energy costs and slash the sector’s greenhouse gas emissions, a peer-reviewed study finds. (The Hill)

WIND: The world installed a record 117 GW of new wind power generation capacity last year, up 50% from the year before, a wind power advocacy group finds. (The Hill)

ENVIRONMENTAL JUSTICE: Black Americans are more likely than other racial groups to say they’re “very” or “fairly” concerned about pollution, and are more likely than White Americans to be displaced by environmental contamination, a survey finds. (The Hill)

CARBON CAPTURE: Illinois bills would add a series of restrictions on carbon sequestration and pipeline projects as developers seek to capitalize on the state’s geology and lucrative federal tax credits. (Energy News Network)

SOLAR:

ELECTRIC VEHICLES: Cities across the U.S. are building out electric vehicle charging networks to meet anticipated EV growth. (Utility Dive)

POLITICS: House Republican leaders are poised to cut a provision to reverse the Biden administration’s LNG permitting ban from critical foreign aid packages. (E&E News)

Federal court blocks bid to halt SunZia transmission project
Apr 17, 2024

TRANSMISSION: A federal judge rejects tribal nations’ and advocates’ bid to halt work on a segment of the SunZia transmission project in a culturally and ecologically significant part of southern Arizona. (Associated Press)

MINING:

OIL & GAS:

CLIMATE:

WIND: A Colorado electric cooperative and wholesale power supplier agree to purchase the full output of a 200 MW wind facility in the eastern part of the state. (news release)

UTILITIES:

COAL:

  • Montana advocates file a lawsuit alleging the state’s justice department illegally withheld documents relating to pollution from a Canada coal mine that crosses the border into the state. (Daily Montanan)
  • New Mexico receives $2.8 million in federal funds to reclaim abandoned coal mines. (KRQE)

GEOTHERMAL: The federal Bureau of Land Management plans to exempt some geothermal exploration projects from environmental reviews to expedite development. (E&E News, subscription; news release)

ELECTRIC VEHICLES: An Arizona community college launches an electric vehicle technician training course. (news release)

COMMENTARY: Nevada advocates urge the federal Bureau of Land Management to push utility-scale solar projects toward low-conflict, previously disturbed public lands. (Nevada Independent)

‘Valuable and largely overlooked’: Interest in virtual power plants grows
Apr 9, 2024

Just about every week, Shawn Grant, who works for Salt Lake City-based Rocky Mountain Power, gets an inquiry from another utility looking for information about the company’s Wattsmart battery program.

“We want to do something. … How did you guys do it?’” Grant, the company’s customer innovation manager, says he’s often asked. “We’re always fielding those questions.”

The program pays customers with solar who opt to install battery storage systems for the ability to use that stored electricity to help balance flows on the electric grid.

For customers, the benefits come in the form of lower electric bills and backup power in case of an outage. For Rocky Mountain Power, which has 1.2 million customers in Utah, Wyoming and Idaho, the program allows the company to harness the collective power stored in those distributed batteries to shave electric demand when it spikes rather than calling for more generation from a traditional power plant, among other uses.

“We’re using every battery every day to reduce demand on the grid,” Grant said.

The concept is known as a virtual power plant, and grid operators, utilities, state regulators and lawmakers across the country are increasingly exploring the possibilities. They are seen as a cost-effective way to aid an electric grid that in many parts of the country is increasingly embattled by power plant retirements as well as difficulties building new, cleaner generation and the transmission lines they need — all at a time when huge projected electric demand increases loom.

“We’re now in this load-growth era,” said Robin Dutta, acting executive director at the Chesapeake Solar and Storage Association, a solar and storage industry group focused on Maryland, Virginia and Washington, D.C. “When you’re mitigating peak demand growth at the source, that’s perhaps the most cost effective way to modernize the grid.”

‘Faster, better, cheaper’  

Nearly 800,000 American homes installed a new solar or solar and energy storage system in 2023, according to the Solar Energy Industry Association. That growth set a record, with about 6.8 gigawatts installed, a 12% increase from 2022. Electric vehicles, another potential grid resource as a store of energy, also broke a sales record last year, despite consumer uptake being slower than some expected.

“These are devices that people are buying anyway because they’re faster, better, cheaper and virtual power plants allows everybody to leverage these devices while putting some money back in the pockets of people that bought the thing in the first place,”said Brian Turner, a director at Advanced Energy United, a clean energy trade group

The U.S. Department of Energy found in a report last year that large-scale deployment of virtual power plants “could help address demand increases and rising peaks at lower cost than conventional resources, reducing the energy costs for Americans — one in six of whom are already behind on electricity bills.”

They’re not a new concept, the DOE noted, adding that most existing virtual power plants are so-called demand response programs. In Virginia, for example, the commonwealth for years has run a program that enrolls hundreds of public facilities (airports, universities, K-12 schools, municipal buildings, water treatment plants and others) that agree to reduce or shift their electric demand to relieve strain on the grid. The DOE report says deploying 80 to 160 gigawatts of virtual power plants by 2030 could save about $10 billion in annual grid costs and would “direct grid spending back to electricity consumers.” At that scale, virtual power plants could meet between 10 and 20% of peak electric demand. The Rocky Mountain Institute, a research nonprofit focused on sustainability, called virtual power plants “a valuable and largely overlooked resource for advancing key grid objectives,” including reliability, affordability, decarbonization and electrification, among others.  

However, many states are starting to take notice of the potential:

  • Maryland’s legislature just passed a bill that, among other provisions, requires utilities to create a pilot program to compensate owners of distributed energy resources like solar and battery storage for services they provide to the grid. “Ratepayers and consumers who invest in clean energy systems should see financial benefits when they provide meaningful grid services,” said Del. David Fraser-Hidalgo, a Democrat from Montgomery County who carried the House version of the bill. “Our DRIVE Act does just that; pairing battery storage with renewable generation will help Maryland achieve its clean energy goals, reduce our dependence on fossil fuels and mitigate the negative impacts of climate change.”
  • Michigan, afflicted by expensive electric prices and high outage rates, has pending legislation, part of a package of pro-solar bills, that would create a virtual power plant program.
  • In North Carolina, the state’s Utilities Commission has approved a Duke Energy pilot, called the PowerPair program, that it had directed the company to propose that will give customers incentives to install solar and storage. One group of customers will turn over control of the batteries to the utility and the other will participate in a test of “time-of-use rates,” which aim to shift customers’ usage to periods of lower demand, like running a dishwasher overnight, Utility Dive reported.
  • In the summer of 2022, the New England Independent System Operator, which manages the electric grid for Maine, Vermont, New Hampshire, Massachusetts, Rhode Island and Connecticut, became the first such organization to use a virtual power plant, Politico’s E&E News reported. Sunrun, one of the nation’s largest solar installers, said it linked an estimated 5,000 small solar and battery systems to share 1.8 gigawatt hours of energy. In the summer of 2022, during a heat wave that sent temperatures soaring across New England states, residential and other non-utility solar installations reduced demand on the system by about 4,000 megawatts.
  • The Pennsylvania Public Utility Commission announced in February that it was seeking comment on proposed rules related to use of distributed energy resources and virtual power plants. “Distributed resources provide the possibility for those who were traditionally consumers to play an active role in ensuring electric reliability and resiliency for themselves and their neighbors, and often in a less expensive way than traditional large generation that requires delivery infrastructure,” the commission’s chair and vice chair said in a joint statement.
  • Arizona Public Service, the largest electric utility in the state, counts 75,000 smart residential thermostats in its Cool Reward program, which provided nearly 110 megawatts of capacity during the summer of 2022.
  • A Colorado utility regulator is pushing for Xcel Energy to get a 50 megawatt virtual power plant up and running by the end of 2024, Utility Dive reported. The company, the state’s largest utility, already has a program called Renewable Battery Connect that allows it to discharge participating customers’ batteries during peak periods in exchange for financial incentives.
  • In November, Puget Sound Energy, Washington’s largest utility, and AutoGrid, a California software company that provides distributed energy management systems, announced that they were expanding their partnership to develop a virtual power plant. “PSE’s VPP will reduce costs and help maintain reliable energy supply to its more than 1 million residential and business customers. Additionally, the VPP solution allows participating customers to receive monetary incentives for sharing assets with the grid and/or curtailing usage, something that’s financially beneficial for the community as well as helping the utility efficiently manage increasing electricity demand,” the companies said in a news release.

Why it matters

Experts who study and run the nation’s electric grid are worried about the pace of the energy transition. Old coal and gas plant retirements are accelerating, driven by economics, state clean energy policies and utilities’ own decarbonization goals. At the same time, massive backlogs in the queues to connect new power resources — overwhelmingly wind, solar and battery projects — in the regional transmission organizations that run the grid in much of the country mean big delays in replacing that retiring power generation. And after roughly a decade of flat electric demand, load growth is projected by many experts to explode as a result of transportation, industrial and home heating electrification, as well as a surge in data center development, among other factors. Throw in the fact that the construction of new transmission lines, essential to get excess power to where it might be urgently needed, has also stagnated and a problematic picture emerges.

“Most utilities in the country are planning on pretty significant load growth,” said Turner from Advanced Energy United. ”They could plan to build a new peaker plant or they could plan to ‘build’ VPPs.”

That’s where utility incentives come into play.

Generally speaking, Turner said, utilities that operate transmission and distribution systems are more friendly to the idea. Companies that also own their own generation,  – and make a sizable chunk of their income from guaranteed profits on building new plants – , might not like the idea of a program that erodes the business case for a pricey new facility.

“That’s why we have utility commissions,” Turner said. “They exist to say to the utility that virtual power plants are a cheaper option for the ratepayer and therefore you should implement it.”

However, even companies that might have resisted the idea are facing such dire electric-demand growth scenarios that virtual power plants may be attractive ways to get more flexibility out of the grid more quickly than building new generation.

“This is a way to get the capacity online faster and oftentimes cheaper,” Turner said. “Meeting that load growth is a real challenge in a lot of places.”

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