Microgrids represent a challenging and alluring market opportunity in light of recent widespread outages, regulatory demands, and increased energy security. The integration of renewable technologies, advanced storage options, and islanding capabilities have allowed innovators to ensure grid reliability and energy independence. Both utility-owned and behind-the-meter microgrids now have the capability and desire to produce their own project demonstrations.
Gil C. Quiniones, President and CEO at the NYPA recently spoke with marcus evans about how the NYPA are updating their energy efficiency programs to utilize microgrid technology and reduce energy spend in New York.
Does NYPA expect the construction and deployment of microgrids to continue to rise within the state of New York?
GQ: Yes, a number of factors are leading to the growth of microgrids in NY, including availability of incentives, regulatory changes, and technology advancements.
- NY is investing significant capital and effort in developing microgrids, most specifically through the NY Prize initiative, a $40-million funding program to help communities across NY create micrgrids. Initially funding up to $100,000 for up to 25 microgrid feasibility studies, NY Prize will then award up to $1 million for ten detailed designs and finally up to $7 million for construction of up to five projects.
- On the regulatory front, the New York State Public Service Commission’s Reforming the Energy Vision (REV) is transforming how customer energy projects, including microgrids, participate in NY energy markets. In short, REV will be creating new energy markets for customer energy projects such as microgrids to participate in and potentially realize revenue from, making them more feasible relative to the existing utility model.
- Technology is also a major factor in spurring the growth of microgrids. New software and control technologies allow for more automated microgrid operations, enabling local energy resources to be combined to follow local loads seamlessly as part of the larger grid and in isolation from it.
However, at present, NY is experiencing very low wholesale energy prices. On-site microgrid generation energy costs are finding it more difficult to compete with these reduced prices. Lower natural gas prices, while driving much of the wholesale prices reductions, will also benefit microgrids that use this fuel for generation.
In addition to the competition for the 5 cities in NY (Albany, Buffalo, Rochester, Syracuse and Yonkers) to reduce their annual energy spending, are there any other programs NYPA is rolling out in line with the Governor’s Reforming the Energy Vision (REV) Plan?
GQ: Many of NYPA’s customer energy projects have the ability to directly support REV. From our energy efficiency projects that permanently reduce customer load to our demand response and distributed generation projects that help manage customer load, these projects reduce demand on the distribution grid and help grid operators to offset expensive grid upgrades – a high-level REV goal. In addition, NYPA is developing its Smart G&T initiative to help improve NY’s grid and make it better able to incorporate local distributed energy resources to improve grid efficiency, resiliency and costs. NYPA, in partnership with SUNY Poly Tech is also building an Advanced Grid Innovation Lab for Energy (AGILe), to help utilities develop modeling tools and capabilities that will be instrumental in supporting the REV initiative. NYPA is also participating on several REV working groups and helping to be a voice of the customer in these ongoing proceedings.
How has NYPA successfully rolled out Peak Load & Demand Response Programs?
GQ: NYPA launched its Peak Load Management program in the summer of 2001. At the time it was one of the only demand response programs available in New York State. As Con Edison and the NYISO have added demand response programs of their own, NYPA has incorporated these offerings into its demand response portfolio to offer its customers an array of options. NYPA has remained successful due to its low administrative fees and the transparency of its financial interactions with customers.
How has NYPA been able to build customer buy-in to Energy Efficiency programs?
GQ: NYPA’s programs have built a tremendous amount of customer buy-in to energy efficiency as is evidenced by the number of large institutional participants that return time and time again to NYPA for energy efficiency services. This has been built by developing trust in NYPA and its staff resources as a knowledgeable resource, the ability of NYPA to quickly procure and execute large projects on behalf of the participants and the access to low cost financing that NYPA provides as a value added service. Program participants, when engaging NYPA, are free to concentrate their staff resources on core mission responsibilities like educating children, keeping trains and buses running, treating patients, providing fire and police services, while relying on NYPA resources to make these operations as energy efficient as they can be.
Gil C. Quiniones is president and chief executive officer of the New York Power Authority (NYPA), the nation’s largest state electric utility. Before first joining NYPA in 2007 as executive vice president of Energy Marketing and Corporate Affairs, Quiniones served for more than four years as senior vice president of Energy and Telecommunications for the New York City Economic Development Corporation. Quiniones also worked for Con Edison for 16 years and was one of four co-founders of Con Edison Solutions, the utility’s unregulated energy services company. Quiniones is vice chair of the New York State Energy Research and Development Authority and is the incoming chair of the Electric Power Research Institute. He also serves on the steering committee of the board of the Large Public Power Council and as the Power Authority’s principal representative to the American Public Power Association.
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