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 A Seat at the Advanced Energy Table with Senator Tim Kaine

February 20, 2018

By Matthew Crosby

On February 12, Senator Tim Kaine (D-VA) held a roundtable discussion on advanced energy, including how to accelerate clean energy job growth nationally. Coronal Energy was delighted to participate along with the Virginia, Maryland & Delaware Association of Electric Cooperatives, Apex Clean Energy, Virginia Solar, Standard Solar, Grid Alternatives, Orsted, Fluence, Greensmith, and other leading advanced energy companies.

During a robust two-hour discussion, five key points emerged that may inform Senator Kaine’s work in Washington, and with his new colleague in Virginia, Governor Ralph Northam.

1)              The electricity regulatory framework must embrace renewable energy cost advantages as well as customer choice. Renewables have already achieved or surpassed wholesale price parity in parts of the country. With the PTC and ITC in the midst of stepping down, coupled with overwhelming market pace and cost-reduction trend curves for wind and solar globally, renewables will be the least-course resource, period, within the foreseeable future. Hence, market reforms should comprehensively take these macro influences into account vs. narrow-minded solutions. The ERCOT price formation docket, PURPA attacks, and defunct FERC baseload proceeding are strong signals that the fossil fleet—not renewables—require subsidization to stay economic. Policymakers should let the market decide, and keep costs low for ratepayers without picking winners.

2)              The federal government should invest in storage through tax credits & R&D, independent of pairing storage with renewables such as solar. Battery energy storage systems are a critical element of future market and flexible grid operations. Grid-connected batteries in the Western U.S. are demonstrating deployment at scale and proving cheaper than traditional investments. Storage may likely be competitive with a percentage of the 137 GW of combustion turbine plants that operate an average 3% of the time to meet peak demand, and storage can deliver additional grid services that contribute to its value. While storage paired with renewables is eligible for ITC, stand-alone storage has proven its value in its own right and should be eligible for a federal investment tax credit. Finally, the federal government should absolutely maintain investments in next-stage R&D through ARPA-E and federal research labs, rather than reduce funding.

3)              States have a critical role to push utilities to modernize through performance-based regulation. The pace of regulatory innovation has not kept pace with advanced energy pricing and customer demands. In addition, although grid capacity costs continue to climb, few utilities predict measurable load growth: GDP has decoupled from electricity sales; the former continues climbing while the latter has flattened. Business as usual must change. States such as NY, CA, IL, RI, and others have initiated utility business model transformation initiatives, but other states, such as Virginia, must quickly catch up to changing customer demands for fixed, low-price renewable contracts, and tie utility earnings with performance, rather than capital investment. These proceedings need not reinvent the wheel. Targeted planning and procurement of alternatives are available to traditional investments, such as Local Capacity Resource auctions in California, or Non-Wires Alternatives projects in New York. In the long term, performance-based incentives will align utility procurement and planning with a more distributed, flexible, and renewably powered electric system.

4) A diverse workforce is integral to implement these changes. The advanced energy workforce, as with other sectors of the economy, is woefully lacking women and people of color in leadership positions. According to the 2017 Solar Jobs Census, women represent 27% of the workforce, Latino 17%, and African American 7%. Women in STEM bring tremendous strength to the transformation of the energy system, and must be promoted within the ranks to leadership.

5) The Atlantic seaboard is poised for an offshore wind revolution. It was clear that offshore wind development is at the cusp of tremendous investment. Particularly for densely populated areas, where transmission investments may be challenging to bring Midwestern wind and solar to the coast, offshore wind tied through undersea cables to coastal load centers (e.g., Northern Virginia, Boston, New York City) can and should be a large part of the grid supply mix. Solar and wind provide peak capacity at different times of day and year, and a flexible orchestration of these resources along with integration of flexible demand reductions can maximize the value of an “all-of-the-above” market-based approach.

Matthew Crosby is policy director for Coronal Energy.

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