Driving innovation in New York State

National Grid is driving innovation and creating the utility of the future through four proposed demonstration projects across New York state that will integrate clean energy, harness new technologies, and deliver new options – and more control – for customers. The proposed projects were submitted to state regulators July 1 as part of the New York Public Service Commission’s proceeding on Reforming the Energy Vision, or REV. Focused on three distinct geographic regions with very different customer needs, the projects will test hypotheses expected to lead to scalable solutions and reinvigorate the existing energy delivery business model.

“Once approved, these demonstration projects will be a living laboratory for the type of innovation, investment and community engagement that will be the hallmark of the energy industry going forward,” said Ken Daly, National Grid’s New York president.

”Each of our proposed projects will help us build new business models, better serve our customers and create new opportunities for market participants,” said Ed White, National Grid’s vice president of New Energy Solutions. White and the New Energy Solutions team will be dedicated to delivering the innovations and technologies in the demonstration projects.

In Western New York: Buffalo Niagara Medical Campus and Neighborhood Solar

Buffalo Niagara Medical Campus

Buffalo Niagara Medical Campus

In Western New York, the company will partner with the Buffalo Niagara Medical Campus to test the integration of distributed energy resources and dynamic load management. The medical campus, which includes Roswell Park Cancer Institute, the University at Buffalo and Kaleida Health, is a consortium of the region’s premier healthcare, research and medical education institutions in downtown Buffalo. This part of the proposal will test how National Grid can integrate customer-owned energy resources to manage system demands.

A companion demonstration project with the Buffalo Niagara Medical Campus includes developing and integrating neighborhood solar options in the predominantly low- to moderate-income residential area immediately adjacent to the medical campus. This demonstration will determine the best ways to increase solar penetration and energy efficiency adoption in communities that could potentially be underserved by third-party market participants.

In Northern New York: Community Resiliency

In Northern New York, National Grid has launched an innovative energy partnership with Clarkson University, SUNY Potsdam and others to examine the feasibility of building a community microgrid to add resiliency and efficiency to the area’s electricity grid. In emergencies, the microgrid would separate from the electricity system and independently provide power to the campuses and to local police, fire, hospital and emergency response facilities. The demonstration project will introduce business model innovation to the development of a community resiliency microgrid.

In Eastern New York: Clifton Park

In Eastern New York, the proposed Clifton Park demonstration project will incorporate intelligent and automated systems so that residential and small commercial customers can actively monitor and control energy consumption. The project will offer customers more predictable energy bills and opportunities to better manage energy usage and new energy technologies, such as state-of-the-art home appliances, smart thermostats and home solar energy. The initiative is intended to improve reliability and reduce energy consumption for approximately 15,000 area customers.

Real-time Feedback, Critical Partnerships, Market Animation

White said feedback collected from the projects will inform how National Grid will:

  • Better serve customers
  • Align with strategic partners to deliver innovation
  • Measure customer interest, engagement and support of options, opportunities and new pricing models
  • Execute the new Distributed System Platform
  • Effectively integrate distributed energy resources into the existing infrastructure, and
  • Advance regulatory changes and effective rate design

Added White, “With the help of customers, strategic partners, communities and regulators, we plan to advance America’s natural gas and electricity infrastructure beyond its 20th century limitations to create an energy network that is more customer-centric, resilient, agile, efficient and environmentally sound.”

National Grid expects the PSC to render a decision on the demonstration project proposals in the coming weeks.

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Kenneth Kirkman

Customer -owned generation cannot be as reliable as the current electrical network. There is no customer owned backup; unless the customer installs a redundant system. This requires significant resources above and beyond that of simply being served by the exisitng network. How is this efficient?

Distributed generation requires a generator, and an internal combustion or gas turbine engine. Either way, one must burn a high quality fuel (natural gas) to make another high quality fuel (electricity). The conversion of kilowatts from btu’s is far more efficient in a large boiler done at grand scale then at small scale. Nuclear power for example is extremely efficient from an energy conversion point of view.

As a public policy, how can distrubuted generation be considered efficient, reliable or environmetally friendly?

The electric rate schedule under a customer generation/interconnection scenario would have to be adjusted so that when the customer required power from the grid, they would pay a premium price, much like a demand charge to undustrial customers. The cost to the utility is the same as the utility would have to provide the extra power immediately as needed by the customer. This means that all of the infratructure and electric power must be always on the ready. The cost to the install, maintain and purchase power does not change for the utility. The demand charge would have to be very high, as the cost to provide the service is spread over a few kilowatthours. How is this an economic improvement to the customer? The customer must install the generation ( and maintenance), pay for the interconnection, pay a monthly service fee to the grid, then pay a very high demand charge when their system failed; or they required more power then what their DG system could produce. I see no advantage to the customer under this scenario. How is this good policy?

Fouad Dagher

Dear Kenneth,

You bring up many good points in your comments about distributed generation (DG). Indeed these are some of the questions we hope to answer in National Grid’s micro-grid studies. The key to optimizing the value of DG is to make sure it provides value to its owner in both grid-connected and islanded modes of operation. For instance, we know that hospitals are required to install back-up generation to support their operations during power outages, and in most cases their back-up generation is permitted only for that purpose. Essentially they are buying expensive equipment, i.e. the generators, requiring regular O&M, as an insurance policy they hope to never have to use. As an example, In a National Grid’s project in upstate NY, National Grid is looking at scenarios where the hospital’s generation can operate in a grid-connected mode and, under normal grid conditions, entertain the option of bidding into various ISO markets including capacity, regulation and demand response. Participating in the ISO markets may create a new revenue stream for the hospitals, or other custoemrs, during normal conditions, and they would still have their generation for back-up as required. As you mentioned in your remarks, the economics would be related to equipment costs, fuel costs, efficiencies, etc.

Regarding efficiencies, older gen-sets based on reciprocating engines may not be good candidates for long-running applications due to low thermal efficiencies and associated emissions. However, one might be surprised to learn that many of the newer units have vastly improved engine controls and can reach efficiencies in the 40% range, and if used in a combined heat and power (CHP) configuration, efficiencies from 60% to 85% can be achieved, which certainly compares favorably to the 55% – 60% efficiency of a modern large combined-cycle power plant. Emissions from greenhouse gases are also reduced significantly by DG using waste heat. Nuclear power plants have advantage as to cost of fuel and greenhouse gas emissions but not as efficient thermodynamically and their waste heat is normally discharged to environment using cooling water.

With regard to the tariffs needed for these new utility/customer models, the economic evaluations for National Grid studies include “stand-by” charges to cover costs for the utility to make up for the loss of customer generation. As you mentioned, infrastructure and capacity must be “reserved” for that customer should they be generating and experience an unexpected trip. National Grid tries to take into account factors that would positively, or negatively affect a purchasing decision. Overall reliability for the customer can only be improved, because when customer facilities are operating in a grid-connected mode, reliability is determined by the combination of the grid and the DG unit, and during a grid outage the DG will supply the customer load.

So, National Grid thinks there are advantages to a good combination of traditional grid and DG (and micro-grid). In addition to the above, there are transmission & distribution efficiencies to be gained both with generation closer to loads, and also due to the new types of electronic interfaces most of the renewable generation sources will have. Optimized control for all of it will be complex, but both utilities and customers should benefit from a coordinated approach.


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