As climate change threatens more grid disruptions, businesses and nonprofits are looking for backup systems that can provide power during outages.
This year, Xcel Energy installed community resilience systems with three microgrids in Minneapolis nonprofit which enable them to produce and store electricity. Now, Xcel has asked regulators for permission to own and operate microgrids on behalf of commercial customers and nonprofits that the utility says won’t install them now because of their cost. and their complexity.
“Commercial and industrial customers are also increasingly considering resiliency options to meet both their reliability and power quality needs, often while meeting sustainability goals,” Xcel said in a case before the Public Utilities Commission.
The proposal, which targets 15 projects by 2028, has drawn criticism from the Minnesota Solar Energy Industries Association and a leading solar installer, All Energy Solar. They say Xcel could use information not available to others to market the program and use its monopoly status to outcompete other companies. Additionally, they say Xcel might have an unfair advantage when connecting customer resiliency systems to the grid, because the utility handles the interconnection process.
ESCOs currently provide many of the same microgrid capabilities as the program offered by Xcel, but with guaranteed energy savings built into the contracts. Additionally, more solar installers are considering adding resiliency services as battery storage options become more affordable and mainstream and customer interest increases.
Xcel argues that entering the market offers customers a way to pay for the systems over several years and have the utility operate them on their behalf. The company said many customers need reliability and have sustainability goals that resiliency systems can help achieve. Xcel said that as it gains expertise in microgrid technology, the cost and complexity of systems can be reduced.
How it works
Resilience systems with microgrids are considered a key technology for a clean energy transition. By connecting solar power to battery backup storage, microgrids allow buildings to create, consume, store and share electricity. During network outages, they can continue to operate – an essential asset for hospitals, law enforcement, data centers and other organizations – providing a clean alternative to typically diesel-powered generators.
Under the program, Xcel would plan, install and own the microgrids, estimating customer costs over several years. Xcel said a similar program approved last year by the Wisconsin Public Service Commission attracted health care, sewage, municipal water and industrial facilities.
After a success microgrid driver in 2017 in its Colorado territory, Xcel is now involved in building six community resilience facilities. The utility also said resiliency projects would be carried out by third-party providers, potentially creating clean energy jobs.
In Minnesota, microgrids operate at a wilderness center in Ely operated by explorer and climate activist Will Steger, a University of St. Thomas microgrid research center and office hub suburban Open Access Technology, Inc. Other projects in the state are becoming microgrids, but there may be one element or another missing.
Massoud Amin, an advisor for Quanta Technology and a professor at the University of Minnesota, said the next evolution of microgrids beyond public institutions such as universities is for private companies that need backup power in network failure. “You see more and more new customer-centric business models on the business side,” he said.
Minneapolis-based Target, one of the nation’s largest retailers, wrote a letter supporting Xcel’s proposal, with some caveats. Nick Paidosh, senior manager of Target’s energy and sustainability program, said winter storm Uri and public safety power outages impacted its operations.
Target’s commitment to be carbon neutral by 2040 requires “resilience solutions” that the program could provide. The retailer also suggested that the program could enable it to use stores as centers of resilience in disadvantaged neighborhoods.
In outlining the financial arrangement with customers, Xcel said it would install and own the resiliency systems for 10, 15 or 20 years, depending on the contract. In addition, customers will pay monthly service fees and O&M fees.
Depending on a customer’s needs, elements of the resiliency system can include solar panels, storage batteries, fossil fuel-based backup generation, and technology that optimizes the equipment. Xcel said customers could benefit financially by allowing their systems to be used as a network resource during times of high demand.
Support and criticism
While the Public Utilities Commission did not take a position on Xcel’s proposal, Commissioner Joe Sullivan expressed support for the role of microgrids in a more sophisticated network. Earlier this year, he supported Xcel’s Resilient Minneapolis project, which places microgrids at three nonprofit sites. Such initiatives will help utilities, providers and regulators understand the potential impact of technology.
“The Minneapolis project gives Xcel opportunities to gain more experience and understand how they will operate and how microgrids can fit into the macrogrid,” he said.
John Farrell, who leads the Energy Democracy Initiative for the Institute for Local Self Reliance, said if Xcel’s claim that cost and complexity are barriers to microgrids, then regulators should improve conditions. of the market. Xcel should only be allowed to sell resiliency services “on an equal footing” where it could not use private market data without sharing it with other third-party microgrid providers, it said. he declares.
Logan O’Grady, executive director of the solar industries association, said its members also had questions about Xcel’s proposal to have a preferred supplier list of companies installing the resiliency systems. He said the company’s qualifications remain unclear and could create patronage issues.
The Commerce Department, which represents ratepayers in regulatory affairs, disagreed with some of the issues raised, but suggested requiring additional reporting related to interconnect queue and network performance. system. Xcel also filed further comments saying it would follow interconnect rules and said the program would grow the resiliency market for the industry.
The Public Utilities Commission has not indicated when a decision will be made.
This article first appeared on Energy Information Network and is republished here under a Creative Commons license.