California Chrome is training in New York’s Belmont Park in his pursuit of horse racing’s Triple Crown. If there was a Triple Crown for the Smart Grid, the state of New York could be the 2014 winner. It certainly deserves attention as a role model for other states in development of a Smart Grid and a truly resilient grid infrastructure as well. Recent actions and initiatives in this state address the three innovation drivers or prongs of the Smart Grid Triple Crown –policy, technology, and finance. Here’s what New York state is doing:
1. The New York Department of Public Service, the state regulatory agency responsible for oversight of investor-owned electric utilities, recently released their Reforming the Energy Vision document. From a policy perspective, this is a game-changer. The report describes the evolution of today’s utility business model. The traditional utility business model is a linear supply chain of centralized electricity generation from a few players with uni-directional electricity transactions to multiple consumers. The future utility business model will include vastly more decentralized electricity generation and bi-directional electricity transactions between prosumers (producing consumers), multiple energy service providers, and utilities. If you want to visualize the future electricity markets and utility models that make up the Smart Grid, this report a great starting point.
2. There’s a very interesting public/private partnership busy creating an Energy Storage Platform online repository of information. The project is sponsored by NYSERDA (New York State Energy Research and Development Authority) with significant inputs from the NYC EDC (New York City Economic Development Corporation) and Con Ed. The business tool will be maintained by Agrion, a global business network for energy, cleantech and corporate sustainability information and initiatives. This technology initiative demystifies energy storage for a very targeted audience of commercial and large residential property managers. These buildings are excellent prospects for building energy storage solutions that can operate critical services such as elevators and hallway lights in the event of grid disruptions. Energy storage gives buildings a small modicum of resiliency. The free information tool is designed for easy input of information from Con Ed bills and analyzes building suitability for energy storage based on demand charges, service rates, and utilization factors. If the analysis meets the thresholds for cost justification, the property manager gets information of how and why energy storage would be a good technology to add. It’s a great play that involves information technology to promote energy storage technology, and property managers get valuable information minus a sales pitch. The formal launch is in June, and there will be more information about it at the June 11-12 Agrion Disrupt 100+ event.
3. New York is the 3rd state to launch a Green Bank to fund clean energy projects. Seeded with $210M to start, it intends to attract enough private capital to fund $1B in projects starting now. This is financial innovation at its finest. The lack of funding for cost-effective loans and loan loss reserves, along with the lack of securitization (already done for fossil fuel energy projects) acts as significant barriers to development and deployment of clean energy and Smart Grid projects. Investment criteria will be aligned with the state’s Public Service Commission’s clean energy and system resiliency program goals. Although its not the first Green Bank in the USA – Connecticut gets that distinction – it is the largest fund to date.
Policy, technology, and financial innovation are the top drivers for grid modernization and the three prongs for the Smart Grid Triple Crown. In that race, New York state is taking the lead position with these innovative initiatives.