POWER May 2016 - 26

DISTRIBUTED ENERGY RESOURCES
Avista Prepares for a More Distributed Future
Avista Utilities (Avista), an investor-owned
utility in Washington state serving roughly
340,000 electricity customers and 300,000
gas customers, has often taken a lead with
new technologies: It built the nation's first
biomass-fired power plant; developed the
world's first commercial fuel-cell power plant;
completed the first collaborative, multi-stakeholder
hydropower re-licensing project in the
country; engineered the nation's first public
benefit system surcharge (tariff) for energy
efficiency; founded electric metering company
Itron; and started fuel cell maker ReliOn and
data management company Ecova.
Although distributed energy resources
(DERs) aren't a major concern for Avista today,
it says it welcomes the new dynamics
and recognizes that customers increasingly
want to generate their own electricity, so
it has taken steps to enable new resources.
Avista currently has 332 customer-owned
and -sited photovoltaic installations, for a
total of 2.07 MW. That's less than many
utilities have, in part because the region
enjoys low-cost hydropower. " But, " Heather
Rosentrater, vice president of energy delivery,
told POWER in an email interview, " we
know solar is viable and something our customers
want, so we are providing them with
the option of choosing community solar or
rooftop solar. Our community solar program
launched in 2015 to allow customer participation
and gain insight into solar operating
characteristics. In addition to our 423-kW
community solar facility, the largest in
Washington state, Avista also launched a
rooftop program that provides a solar estimation
tool via our website, for customers
interested in rooftop solar. "
Valuing New Resources. Avista understands
that any particular DER may provide
utility meter and may be owned by a utility,
a customer, or a third party (see sidebar " Between
the Utility and the Customer: Community
Resources " ).
For many years, the category mostly consisted
of small-scale utility-owned diesel
generators or gas engines strategically located
to support distribution system operation.
Today, DERs include small-scale energy
storage, including batteries and flywheels,
as well as small-scale solar, wind, and hydro
generation. The reason for the moniker " resources "
is that, as with energy storage, some
of the resources are not primarily generating
26
one or more services to the grid or customers.
" The key to unlocking the potential of
DERs, " said Rosentrater, " is understanding
the value for each service consumed or delivered.
In addition to standard value areas,
the analysis should consider location-specific
value. Once a methodology to calculate
the value is established and agreed
upon, each type of DER can be evaluated
on the ability to deliver one or more values
through the DER asset life and an economic
business decision can be made that considers
all the values delivered. "
For example, Avista has a 1-MW/3.2-MWh
vanadium flow battery energy storage system
installed in Pullman, Wash. (Figure 1),
that has been operational since April 2015
" and is used daily to deliver multiple grid
and customer services. " Rosentrater said this
project " was deployed to help the utility
learn how to integrate renewable energy on
its grid. Energy storage for commercial customer
application is proposed for 2016. The
goals of this commercial energy storage are
to deliver grid and customer benefits as well
as enhanced resiliency. " (For more on battery
projects, see " Practical Considerations
for Siting Utility-Scale Battery Projects " in
this issue or online at powermag.com.)
" Avista believes that DERs, if not already,
may become economically competitive with
large-scale utility resources, " Rosentrater
said. " When localized value that includes
O&M and capital offsets are considered,
many assets may be more than competitive.
Avista believes the distribution planning
process must evolve in such a way that
the localized value is considered as a part
of DER value to the utility. "
Scale vs. Scope. " The economies of scale
business model, which has been the backtechnologies
or facilities that can only feed
power to the grid. Also included in the DER
category are distribution system management
tools such as demand response.
Plus or Minus? The value of DERs depends
on who is determining their economic,
societal, and personal value. Several DER
options-from rooftop solar to electric vehicle
(EV) battery energy storage to demand
response programs-enable even small
customers to participate in energy markets,
provided the utility has developed modern
distribution technologies and enabling customer
programs. But even without a monetary
www.powermag.com
1. Storage facility. Avista's 1-MW/3.2MWh
vanadium flow battery energy storage
system in Pullman, Wash. Courtesy: Avista
bone of the utility industry for decades and
well over a century, no longer meets all the
comprehensive needs of the new energy
future, " Rosentrater said. " This new future
must deal with the advancing maturity of
DERs and falling prices of energy storage
and renewable technology, flat to declining
customer energy use, and changing customer
expectations such as customers who
want to participate in the grid. "
" We recognize that we need to shift
. . . to a new business model incorporating
a focus on 'economies of scope,'
which allow us to leverage assets for
multiple uses, creating new revenue
streams, " Rosentrater said. As an example,
she noted that battery storage can
be leveraged " every minute of every day
through 'economies of scope.' "
As for the continuing importance of the
grid, " Even in a solar world, excess energy
needs to go to market via the grid. Renewables
are intermittent-the grid is necessary
when the sun is not shining and the
wind isn't blowing. The quality of electricity
is as important as the quantity of energy.
Regardless of what the future looks like, we
all need reliable and clean energy, and the
grid ensures that is possible. "
incentive, many customers derive personal
satisfaction from adopting new technologies,
whether they be the latest smart phone or an
EV.
Utilities vary in how they view DERs-especially
customer-sited varieties-depending
on their location, political environment,
role in power markets, and willingness to
innovate.
From a purely technical standpoint, DERs
can complicate distribution system planning
and management or support it. Depending
on where DERs are added to the distribution
grid, the effects can be inconsequential
POWER | May 2016
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POWER May 2016

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