Value of DER Implementation. AEE Presentation May 16, 2017

Transcription

1 Value of DER Implementation AEE Presentation May 16, 2017

2 Agenda Overview of Value of D Order New Solicitations for Non Wire Solutions EPRI Study on DER Values & Next Steps 2

3 Outcome of Value of DER Order Systems operating as of March 9 New residential & small commercial systems installed through sooner of January 1, 2020 and Phase 2 Order. No changes -- receive NEM for life of system, can opt-in to new structure Eligible for 20 years of NEM New large commercial and industrial, remote net metering installations Receive Value Stack without transition credit New community DG projects Tranche 0 receives NEM for 20 years, others receive Value Stack for 25 years with transition credit that declines by tranche Generally, transfers Renewable Energy Credits (RECs) to the utility for use in offsetting utility s default load obligations 3

4 Unpacking the Value Stack Component Description Energy Day Ahead Hourly LBMP Installed Capacity Volumetric credit applied to production in all hours with option for higher credit in summer on-peak periods Environmental NYSERDA REC ($24.24/MWh) 1 Distribution Relief Value (DRV) Locational System Relief Value (LSRV) Market Transition Credit (MTC) Applicable to demand customers not eligible for MTC Based on performance during 10 peak distribution hours of previous year valued at MCOS Additional incentive for DER developed in high value areas based stretch of MCOS Credit for mass market to bring compensation close to NEM Declines for new projects as tranches fill Current NEM Environmental Tranche 0 Market Transition Credit LSRV / DRV Tranche 1 Tranche 2 ICAP Energy Distribution 1. Higher of NYSERDA REC value ($24.24/MWh) or EPA Social Cost of Carbon less RGGI.

5 New Utility Requirements Hourly metering for all Value Stack customers Implement highly-complex, project-specific compensation based on individual project performance, and subscriptions Manage new cost allocation Manage transfer of RECs De-average marginal cost studies to determine high value locations and compensation levels 5

6 Implementation activities Locational Distribution Values Interim proposal included in May 1 filing Identify criteria to determine high-value areas based on Loading of sub-transmission and network/load areas Segment network/load areas based on criteria Determine MW cap in each high-value area Stretch/squeeze Marginal Cost Of Service (MCOS) into DRV, LSRV Model DER performance by network / load area to derive initial compensation using NREL solar production data To be replaced with updated granular MCOS 6

7 Con Edison has identified high-value areas, 85MW of LSRV caps Level of system Loading Threshold Sub-transmission 98% Loading Area Station Network 98% Loading 90% Loading LSRV MW caps by area of need Sub-transmission MW Cap Plymouth 14.3 Water St Glendale, Newtown 8.1 Each sub-transmission path has 1-3 area stations where DER can be located LSRV MW caps by region Eligible MW % of load Area Station MW Cap East 179th Street 7.8 Parkchester No Parkchester No W. 65th St. No Wainwright 7.2 Willowbrook 0.3 Millwood 3.8 Each Area Station has up to 2 load areas where DER can be located to solve the station need Bx Bk M Q SI W Network MW Cap Northeast Bronx 6.8 Yorkville 4.5 MW Allocation % of Load within LSRV Areas

8 19% of Con Edison load is in a high-value area Areas eligible for LSRV, subject to caps

9 $/kw-yr Con Edison: LSRV and DRV Rates 50% MCOS stretch: $226 (Avg Marginal System-wide Cost) DRV only LSRV + DRV 11A-3P CSRP Window 2P-6P CSRP Window 4P-8P CSRP Window 7P-11P CSRP Window Values Based on Typical Solar Production Coincidence with Peak 47% 32% 13% 12% Initial DRV ($/kw-yr) $ $ $25.45 $23.09 Initial LSRV ($/kw-yr) $ $ $17.96 $16.30 LSRV + DRV ($/kw-yr) $ $ $43.41 $39.39

10 Cost Allocation & Recovery In the money energy and RECs full-service customers Market value of Capacity as load modifier all delivery customers Out of the money portions & MTC delivery charge allocated based on participating customers SC Incorporate purchased energy & REC attributes into procurement for full-service customers 10

11 Illustrative Community Distributed Generation Residential Members SC1 MTC = $0.087/kWh Demand-metered Member SC2 MTC = $0.093/kWh Project Credits DRV = $500/month Small Commercial Members DA LBMP + ICAP + E = $0.10/kWh PV Output = 10,000 kwh

12 VDER Next Steps May 15 Volumetric ICAP credits (cents/kwh) for Value Stack Proposed Generating Capacity Rates Applicable to Value Stack Projects cents/kwh export New York City Westchester Alternative 1: pending approval; effective 5/1/17-10/31/ Alternative 2: 460 hours HB 14 - HB 18; 6/1/17-8/31/ May 23 - Phase 2 Procedural Conference to consider Expansion to stand-alone storage and non-renewable technologies (e.g., CHP) Consolidated billing for CDG Increasing allowable size of projects from currently 2 MW to 5 MW Rate design Improvements/enhancements to Value Stack Successor to Value Stack and mass market NEM by end of 2018 July 10 Comments on Implementation Plan August 3 Potential Order implementing Value Stack 12

13 Agenda Overview of Value of D Order New Solicitations for Non Wire Solutions EPRI Study on DER Values & Next Steps 13

14 NWS Solicitations Two Request for Proposals issues with market responses due June 9 4 MW need by MW need by 2021 Six additional opportunities have been identified for Flushing, Williamsburg, Yorkville, Pennsylvania, Glendale and W 65 Street #1 14

15 Agenda Overview of Value of D Order New Solicitations for Non Wire Solutions EPRI Study on DER Values & Next Steps 15

16 Location matters for DERs to solve utility needs EPRI study has informed the Value of D proceeding in New York Used the EPRI Benefit-Cost Framework Reproducible Assessed impacts of interconnected DER Generated value/cost to utility Companion study The Analysis Group The Role of Distributed Energy Resources in Supporting Local Electric Distribution Reliability 16

17 Decreasing DER effectiveness Key Findings System topology matters Constrained transformer Neighboring transformer A Dispersion of DER contribution from point A E B D C Multi-directional power flows Locational sensitivity Dispersion in a Network System (Con Edison)

18 Key Findings Impacts of DER Deployment

19 Future Efforts Pricing and Compensation Evolution of DER compensation from NEM to value-based structures for other DER including standalone storage Smart Home and other AMI-enabled rate redesigns Requirement for / Use of Smart Inverters Strategies and standards for set-it and forget versus active monitoring and control Integration / Coordination with ISO/RTO markets Capture wholesale market values for DERs Coordination of ISO and distribution processes 19

20 Thank you. 20