The unknown unknowns are what keep regional grid operators up at night. And right now the rapid growth of customer-sited microgrids, invisible to grid operators, count high among them.
That’s the message delivered last week by Jonathan Monken, PJM senior director, speaking on a plenary panel at the Virginia Clean Energy Summit in Richmond.
PJM operates one of the world’s largest grids, which through a complex orchestration of 180,000 MW, keeps electricity flowing to 65 million customers in 13 states and the District of Columbia.
By pathdoc/Shutterstock.com
But change has come to the system at a rapid clip with customers installing their own generation in the form of microgrids and other distributed energy resources (DERs). These assets are not part of the grid managed by PJM but they do influence it. For example, they can change consumption patterns — and in ways the grid operator cannot see.
“The hard part is that we don’t see down to the customer level. We don’t see below 67 kV. That is where the rub comes,” he told the audience of clean energy advocates.
Risk and reward of the new reality
Because they do not know what the distributed assets are doing, grid operators cannot incorporate them into their overall planning, which could ultimately weaken the grid, he said.
As an example, Monken described how PJM got tripped up in its forecast during the solar eclipse of 2017. It’s difficult for a grid operator to forecast how much power is likely to be used on the day of an eclipse because there is little historical precedent. PJM had assumed demand would rise because homes and businesses with solar panels would turn to grid power as the eclipse blocked the sun.
“Then something very weird happened,” Monken said. Rather than rising, demand for power fell by 4,000 to 5,000 MW.
Why? As is often the case, weather played a role. It was cooler than expected. But the unknown unknown emerged from a distributed asset. Without notifying PJM, the maker of the NEST thermostat had asked customers to conserve during the eclipse, which reduced demand by 900 MW.
“900 MW is a lot of juice. That powers DC on any day and that’s how much fell off our system without warning because somebody ran a promotion,” he told the audience.
PJM’s incorrect day-ahead forecast cost the market millions. And it demonstrated that risk and reward of smart distributed assets — efficiency on the one hand, unpredictable behavior on the other.
”For decades and decades we knew how the grid would behave. That’s one of the biggest differences we have right now,” he said.
Where opportunity lies for microgrids
So what is the solution to this problem? No easy answer exists. But Monken urged microgrid and distributed energy operators to communicate with PJM — not just for the sake of the grid but for their own benefit.
DER startups and small companies often don’t realize that they can contact PJM any time and will find they are happy to discuss “everything and anything about how the market works and where the opportunities are,” he said.
Too often, microgrid and DER developers believe their businesses can only work if they have a dedicated customers. But revenue opportunities also exist by integrating the technology — a battery, for example — into the wholesale market, an act that also grants PJM more visibility. Grid-connected microgrids can at times earn money from the grid through the sale of ancillary services or by participating in demand response programs.
The revenue potential may be greater than developers expect, as evidenced by some who have worked with PJM, he said.
“We were just as surprised — we didn’t expect this. When they offered us more visibility, it’s been to their benefit,” he said.
Virginia Clean Energy Summit. Photo by Elisa Wood
Market signals
The future, he noted, lies in realizing the economic benefits of integrating distributed resources into the grid — and the market is sending that signal.
The signal is not that more capacity is needed to meet demand, but that “there is a $45 billion market in our territory that has opportunities for more efficient energy resources to come on the system and make money,” he said. “We can go as fast as people recognize the economic benefits associated with bringing those resources on the system.”
Monken and others on the panel — Paul Alvarez, president of The Wired Group; David Farnsworth, principal of the Regulatory Assistance Project; Steve Hauser CEO of Gridwise Alliance and Joe Woomer, vice president of Dominion Energy — emphasized that change is happening rapidly on the grid.
PJM has about 850-900 MW of energy storage operating within its territory now, “We’re going to laugh at that number in 10 years because it is so small,” Monken said.
He added: “The pace of change is faster than it has ever been in terms of how quickly the fuel mix is changing the system. The penetration of renewables is going to continue to grow and the pace of that change is going to only get faster.”
Virginia’s green boost
The conference attendees were witness to a first-hand example of the pace of change. Virginia, for years a middling state at best when it comes to energy innovation, joined environmental leaders like New York and California that have set clean energy and carbon goals. Governor Ralph Northam (D) announced at the event that he had signed an executive order for Virginia to derive 30% of its electricity from renewables by 2030 and become carbon free by 2050.
The Virginia Clean Energy Summit, itself, was a landmark event for the state. Virginia clean energy advocates have struggled for years to galvanize their cause. So the standing-room only crowd of more than 400 attendees offered promise of a new era. Held at the Greater Richmond Convention Center, the event was hosted by the Virginia Renewable Energy Alliance, the conference hosts include: the Maryland-DC-Delaware-Virginia Solar Energy Industries Association, Resilient Virginia; Virginia Advanced Energy Economy and the Virginia Energy Efficiency Council.
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