Solar panels are affixed to the rooftop at Eco Serendib.
The eLab at Rocky Mountain Institute, an environmental think tank, has call the Caribbean’s shift to fossil fuels such as propane and Liquefied Natural Gas (LNG) a “Bridge to Nowhere”!
We, on St. Thomas and St. John can certainly relate to that analogy!
Now, we are going to have two “Bridges to Nowhere”! A real one in Nadir and a virtual one in Propane!
What is the Virgin Islands most abundant, reliable, inexhaustible (we hope) and in the future, cheapest source of energy?
SOLAR. Fifty-three percent of all new energy resources on the grid in the US in 2014, have been Solar! There are more than 500,000 homes and businesses in the US that have installed Roof Top Solar (RTS) which is also called Distributed Generation (DG). Solar’s continued exponential growth rate will continue to reduce its cost!
There is a grid revolution in new technology happening that is fundamentally changing the role of utilities’ relationship to the grid that will bring the benefits of ROOF TOP SOLAR (RTS) with storage to the grid. This technology can also reduce electric rates!!
Utilities as Distribution System Operators
The role of the utility as the sole producer of electricity for the grid is changing! David Owens, Executive VP of the Edison Electric Institute, representing Investor Owned Utilities (IOU’s), agrees about the need to evolve the grid and enable customers to generate and sell their own energy generation. He also agrees that utilities should be distribution system operators managing distributed generation, and he advocated for policies that ensure solar customers pay their fair share of grid costs.
Super Storm (Hurricane) Sandy on the US East Coast has changing the nature of the grid and of solar! Before Sandy, the conventional wisdom was that the Eastern Grid was “too big to fail.” Therefore, distributed solar on the grid, did not need to be coupled with distributed storage, because the grid would never fail.
But the grid did fail in Sandy and all of those thousands of distributed solar installations, without storage, could not produce power because the grid did not exist. So in a natural disaster that takes out the grid, distributed solar without storage is useless. For lineman safety, a solar system cannot send power to the grid when the grid is down! However RTS with storage, allows the solar system to disconnect from the grid when the grid goes down and switch to stored power. This allows roof top solar to produce electricity for use on the premises, without grid power.
Paul Nahi, CEO of Enphase Energy, a leading solar technology company and micro inverter maker believes that “buying and installing a roof top solar electric system should be as easy as buying and installing a washing machine or refrigerator.”
Enphase has just announced a game changing “Plug & Play” AC Battery (lithium iron phosphate battery coupled with a bi-directional micro inverter) and an Energy Management System (EMS) that will make installing and managing a rooftop solar installation with storage as easy, (almost) as installing a household appliance!
For the homeowner or small business owner RTS has many advantages! Roof top solar, also called PV (PhotoVoltaic), has no moving parts, makes no noise, require no external fuel source, other than the sun, requires minimal maintenance and has a documented life expectancy of 20 years of generating electricity.
More Stable Electrical System
The solar energy that is generated on the roof is used first within the premises to reduce the demand for fossil fuel grid power. It also makes the premise’s electrical system more stable and efficient because you are producing “grid quality power” where it is being used, so there is no transmission loss. And if you install “energy storage” with your RTS or PV system, then you have automatic built in back up power when the grid goes down.
More importantly new smart grid technology will allow the utility to “borrow and pay for” small amounts of your storage to stabilize the grid and provide demand response. This system will work much like net metering, where the utility will credit your account for the borrowed distributed storage. Energy storage coupled with RTS is a necessity to bring more solar onto the grid to reach the VI’s goal of 60 percent renewables by 2025. This is also the key to lower utility rates in the future!!
Distributed Generation (DG) also has advantages for the utility. A number of DG/RTS systems in particular area (neighborhood) also helps to make the grid more stable by injecting excess generation into the grid to help stabilize the grid, particularly if the location is a long distance from where the grid power is being generated. WAPA acknowledges that a significant amount of its power is “lost” in transmission.
DG systems dispersed all over the island are less likely to be impacted by intermittency (a cloud moving over a solar array) than the large centralized solar farms, without storage, that are current being installed. The uncontrolled intermittency of centralized solar farms, without storage, pose a real threat to grid stability if more of this type of system are brought on line! Whereas large solar farms with storage are an asset to the grid.
How do we get from here to there? The answer is DERMS! “A Distributed Energy Resource Management System (DERMS) is a software-based solution that increases a grid operator’s real-time visibility into its underlying distributed asset capabilities.
Through such a system, distribution utilities will have the heightened level of control and flexibility necessary to more effectively manage the technical challenges posed by an increasingly distributed grid,” according to Greentech Media.
Distributed Energy Resource Management System
Think of the grid of the future as akin to the internet, except that both information and power will be sent and received over the grid, not by humans but by the “internet of things.” Individuals and companies can add managed energy resources to the grid to help provide demand response and augment base load needs without the need for the utility to purchase and install new generation equipment. Virtual power plants can be created on the grid by tapping into the combined resources of hundreds or thousands of distributed solar storage systems! As the cost of distributed solar with storage continues to fall, this concept can become a reality!
WAPA already has the “backbone” in place for a DERMS, or Smart Grid through its investment in the Next Generation fiber optic cable distribution system installed throughout the islands! The next challenge in this process is to get the fiber optic cable link into residences and businesses.
What is the Value of Solar (VOS) in the Virgin Islands? Minnesota became the first state to enact a Value of Solar tariff (VOST) in March of 2014. Minnesota’s VOS tariff was keyed to the federal governments Social Cost of Carbon methodology. This process is way too complicated (and expensive) for use in the VI. Currently we have two solar rates structures in the VI, Net Metering and Feed In Tariff (FIT). Both of which are currently capped out, under the law, until new legislation is enacted!
Net Metering was initiated as a stimulus to jump start solar in the VI. Net Metering grants the rooftop solar producer a 100 percent credit on the utility bill for the power generated and fed back into the grid. Obviously it does not take a rocket scientist to figure out that WAPA cannot stay in business if the VI has 60 percent renewable penetration with 100 percent credit to the customer.
The other option was a Feed in Tariff (FIT), which was primarily conceived to compensate large scale solar farms at a wholesale rate for producing renewable energy for the grid. That rate is pegged at what is called WAPA’s “avoided cost”, which is supposed to be WAPA’s cost to produce power.
For large scale solar farms the FIT works out economically for both WAPA and the producer because of the large size of the system. However, for smaller scale, up to 20 kW systems, with storage, the numbers do not work!
Finding Viable Solution
Therefore as in all arbitration cases, each side must make concessions. A V.I. VOSC (Value of Solar Credit) rate that splits the difference between the net metering rate (100 percent credit) and the FIT rate (wholesale rate) for solar installations with storage (less than 20 kW), with a small monthly interconnection fee could be a viable solution.
As the cost of storage continues to fall, a VI VOSC rate will encourage WAPA’s customers to bring new and sustainable renewable generation (solar) to the grid to help move toward the VI’s goal of 60 percent sustainable renewable energy generation, with no capital expenditure from WAPA!
With DERMS and a VOSC in place, WAPA could have its cake and eat it too!