Energy Central Power Perspectives: Exploring Load Flexibility as a Grid Resource: Exclusive Interview with Rich Barone of Hawaiian Electric Company
image credit: Rich Barone
- Oct 30, 2019 2:30 pm GMTOct 30, 2019 2:25 pm GMT
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For decades, the only grid resources you could reasonably identify on the electric power grid were those central power generation plants that were matching supply with demand with various degrees of efficiency. Recent years, however, have unearthed a new paradigm in the utility sector as small-scale and distributed generation resources were connected to the grid, smart meters allowed for two-way communication and energy transfer, and power providers began to realize the value of efficiency and load shifting as grid resources in their own right. While many of these new grid resources have now been tested and implemented on the grid for numerous years, the utility industry is currently reaching a pivot point that is connecting legacy utility models with these new types of resources as a central tenant of business and operations.
During this critical moment in the sector, it’s more important than ever for experts in the field to share what they’ve learned about what does and doesn’t work for the modern utility. This type of high-value information sharing is exactly what will be going on at next week’s 40th PLMA Conference, and load flexibility as a grid resource is just one of the topics that will take center stage at the “Load Flexibility as a Grid Resource Workshop.” Rich Barone, Co-Chair of DER Integration at PLMA and Director of Demand Response at Hawaiian Electric Company, will be one of the industry experts running this workshop, and he was kind enough to take some time out of his preparations to share his thoughts with me on this important topic and the expected outcomes from bringing all these load management-focused professionals together in one workshop:
Matt Chester: Before diving into the DER integration workshop at the PLMA Conference, can you give a bit of background about yourself? How did you get involved in the utility sector, load management, and PLMA specifically?
Rich Barone: That story dates back to about 2005 when I made a decision in my life to get involved in clean energy. I wound up making a career change from more of an IT background and did a complete reboot by going back to grad school at the University of Colorado. I did a dual degree in entrepreneurship in the MBA program there and a concentration in energy technology and policy within the environmental studies department, and then I interned at NREL in the commercialization and technology transfer department, focused on enterprise development – including recruiting and evaluating companies for their annual industry growth Forum. I got involved in the assessment of a lot of emergent technologies, energy economics, and the changing energy landscape - and the nexus of information technologies and operational technologies.
Upon graduating, I joined a startup that brought both of my disciplines together. We developed a distributed energy computing platform, targeted at managing DERs for both commercial building owners, and network operators for utilities. That was my first time dipping my toe into the utility waters, and I did that for about five years. We eventually sold that company, and rather than relocate out of Boulder, I was fortunate enough to join Navigant Consulting where I got more exposure to emerging technologies, but also because one of the primary applications we developed from that distributed platform was demand response aggregation for wholesale markets, I had some knowledge of DR markets and technologies, so I contributed to their DR practice, particularly in technology assessment and market models. I also supported emerging technology and smart grid work and helped spearhead what at that time was an emergent microgrid practice work.
I worked at Navigant for a couple of years, during which time I got introduced to the folks at PLMA. My first entree to PLMA was through my Navigant, and I started becoming a regular attendee as a consultant. At the end of 2014, I had been doing consulting for Hawaiian Electric on a number of projects, and when an opening came up to be the Director of the new DR department there, I made a pitch for it as an opportunity for me to take everything I knew and my vision for the future and bring it to their integrated demand response portfolio plan.
MC: The workshop you’ll be running is called ‘Load Flexibility as a Grid Resource.’ Can you talk about the current state of load flexibility on the grid in terms of how common it is for U.S. utilities to embrace these strategies and what challenges are holding the programs back from greater penetration into the market?
RB: Living on an island in the middle of the Pacific, it’s hard for me to give what I would think would be comprehensive or just fully comprehensive jurisdictional overview, but I will say that there are certain markets that are starting to recognize load flexibility as the natural evolution of demand response and others that haven't quite picked up on it. The hurdles might fall into a few categories: 1) the vision of utilities combined with the vision of commissions in different jurisdictions to understand this transformation; 2) the degree to which the system is driven by renewable energy that creates more of this variability of need for the flexibility, and 3) how much is distributed? How much of the need is actually caused by distributed assets which could, therefore, be theoretically self-corrected by distributed assets? It's jurisdictional vision and jurisdictional need, I think, are the biggest hurdles. Another notable hurdle is finding the right market mechanism for making this happen.
As one note, everybody wants to talk about a prosumer world, but I live and breathe this stuff, and I can tell you that I haven’t spent any hours really digging into my own energy use. If I'm a guy who lives in the world of energy and I don't actively engage myself, it's kind of telling, to me, right? Because of this, creative market models are needed.
I also want to touch on something that’s a pet peeve of mine in the industry: I don't think demand response is a DER. What's a demand response? It's not a thing so much as it's an action or an outcome, right? Anything that sits on the customer side of the meter specifically, anything that you can control or manipulate, I don't care if it's a producer, a consumer, or a shifter, is a distributed energy resource. That could be a PV inverter, a battery, an electric vehicle, a thermostat, a water heater, a pool pump, etc. They are all DERs. I think when people say DR, they are really talking about load control devices. In order to get to a concept of load flexibility, it may be useful to see all of these things as DERs, and that in their totality, one can manipulate the collection of these assets to produce a desired response from the demand side to the grid. Currently, you’re seeing a lot of people differentiating DER, DR, storage, EVs, etc., and I would argue that these are neither necessary or productive differentiations. I think really there's just demand response as the control mechanism to elicit the desired response from all that stuff, and so that's really important. So, maybe we need to modify the lexicon to avoid falling into old ways of doing – or seeing things. One idea is to eliminate the term “demand response” altogether and group anything that's controllable into the “DER” bucket; the key thing is that DR is not a noun, it’s a verb, an action…and the DERs are nouns = they are things you can control. In Hawaii, for example, we combined what was our DER department and what was our DR department into a new Customer Energy Resources department. And the control of these is managed by a division within that department called Customer Energy Resource Operations. And that reflects the evolution of what once was our Demand Response department.
MC: You’ve conducted similar workshops in the past for other topics, such as NWA. How valuable have you found it to be to get utility professionals-- the managers and directors of the industry-- from across the country into a room to hash out these questions?
RB: What's really interesting, and generally true about PLMA, is that there is a very novel participation balance; it's a fairly well-balanced and not a typical conference where you get 5% utilities and 95% vendors. At PLMA, you have about 35-40% utilities and another comparable percentage of vendors in terms of solution providers, and then the delta is mostly consultants. So these working sessions are real Petri dishes where you wind up with a pretty decent distribution of all different integrators, technology providers, consultants, and utility people. The biggest macro value here is you can create a safe sandbox for risk-free dialogue between solution providers and utility professionals. While it's somewhat of a contrived exercise, you do get relatively well-articulated, well-thought-through solutions and the depths of knowledge usually shine through. It's pretty impressive.
I think what you also gain is the counterparties' thinking and perspective and how they have to approach a problem or a challenge…what they have to go through. Where are the hurdles? It works both ways. The utility can talk about the struggle with reaching customers or the complexities of programming these rates within SAP or regulatory challenges…a variety of things, and then you've got the vendors talking about all of their challenges with the field efforts or their communications, cybersecurity and activating customers and then waiting on the utility for what’s needed from them. So, it becomes an opportunity for folks to really start to understand a much broader spectrum of concerns and challenges and issues within this overall picture, more than just their particular silo. This fosters empathy, as well, which can foster a more collaborative climate.
MC: Aside from this workshop you’re running, are there any other presentations or panels that you’re eager to attend and learn from as a member of the audience? What do you have circled on your calendar?
RB: I'm very curious to see how the transactive energy panel goes, though full disclosure I am moderating it! But while I have been working with the panelists to chart a course, I cannot say with certainty where it's going to go. I think the customer engagement and the prosumer notion and the models that support it are keys to transactive energy and natural extensions of load flexibility.
There are also two panels on Tuesday afternoon around data and analytics that I am very interested in going to and learning from because that's a huge, huge part of this industry in the near future. Those panels are “Smart Analytics for C&I DR: Understanding Existing Customers to Enhance Program Performance” and “Cutting Edge Data Providing Insight into the Future of Residential DR Aggregation.”
Then, on Wednesday morning, one of the tracks is fully dedicated to EVs, and I think that this is an emergent, very complex asset class that we all ought to start understanding how to manage effectively.
If you’re interested in hearing more about Richard’s insights into approaching load flexibility, be sure to find her at the 40th PLMA Conference taking place in St. Petersburg, Florida, from November 4 to 6. You can check out the agenda and register for the conference here.