 Good afternoon. Good evening. This is Guillermo Salvatier. I'm your host for today's show on Perspectives on Energy. I'm director of international services for HSI, the Health and Safety Institute on industrial skills. And today we're going to be talking about DER, Distributive Energy Resource Integration, otherwise known as DERs. So I'll be using that acronym quite a bit. And we'll see how the industry is going to manage this integration, what we've done so far and where we're headed and what we're looking at in the future. Definitely a lot of variables in here and a lot of things to discuss. We're going to be talking about a few different items in here. I've got a few bullet points that I've given myself to cover. Number one, what is it? We're discussing defining what DERs are, what DER integration is, and we'll cover a little bit of that. After that, we'll talk about how much penetration we've had so far and what that looks like up to now and how much more of a widespread penetration we expect in the next two, five, 10 years. The next topic we'll talk about is the modeling and planning studies. Like any engineering job, you're going to represent it with challenges as far as how this particular new resource will impact your day-to-day operations. So planning long-term is a challenge and modeling as well, but also day-to-day is going to present itself with some certain challenges when it comes to figuring out how to plan and operate your system. The other issue we're going to have, of course, is understanding how this will benefit the utilities, how it will benefit the consumers, how it will benefit the industry. That's the other topic, and then in the very end, we'll talk about the potential of specifically consumers when it comes to peer-to-peer energy marketing, possibility of being able to sell power and buy power between yourself and your neighbors or yourself and this whole pool of DER energy producers at the residential level for the most part those are car consumers. Okay, so let's dive right in. So what is a DER, a distributed energy resource? So that could be anything like a solar array on your roof. It could be a regular old reciprocating engine generator that you have on your house that runs on diesel or gasoline or natural gas as an example of that. You can have a battery banks that are already installed like a Tesla Powerwall, for example, at a residential level, or that could also be, for example, a heat pump system as well. So those have been around for a while, but those are now becoming popular again with how they can reduce the amount of power that's expended. They can store some energy, or more importantly, they can actually release some energy back into the system. The other thing, of course, which is becoming really, really interesting is the advent of electric vehicles and how that can be tied to the grid by the form of distributed energy resource management, such as the availability of them at some point serving as energy storage. So the likelihood of people installing batteries on a house is not as high as the likelihood of people buying EVs, electric vehicles, and then charging it at home during peak or off-peak hours. So given that type of likelihood, now we're looking at the possibility of the distributed energy resources now being encompassed into the idea of not just solar panels on your roof, but also your electric car on your driveway or your garage. So that's definitely going to be something that will be considered a DER at the residential level, so an example of that. So one of the things that is the terminology is we all became consumers of electricity, right? But once you become a, but you also produce electricity, you produce more than you're consuming. Before you get to that stage, you're somehow offsetting the amount of power that you're consuming because you're producing your own power. Once you get to that point where you have a net positive generation of power where you're actually feeding power onto the grid, now you're becoming a prosumer, which is both a producer and a consumer. Of course, that all depends on what time of the day you're looking at, right? So that's basically what it is in a nutshell. Integration in this regard is once these resources get numerous enough to the point that they reach a certain critical mass that they become a concern or an opportunity or something that really impacts utility, that's when integration becomes important, right? Now we're already looking at the problems and the opportunities that are presented by rooftop solar. For the most part, there's a famous term known as the duck curve, which is basically midday peak demand has been reduced because of the output of all these like rooftop solar panels. Naturally, that reduces the amount of power being consumed. So then you have, for example, the low curve is not going to be as high as it was forecasted. So at around 10 a.m., the low just dips and it comes back up again right before sunset. So ultimately, the low curve takes the shape of a duck, which hence why it's called the duck curve. So that in itself, each here as more and more solar panels are installed, that the back of that duck curve gets lower and lower on that graph. So eventually, you will get into a problem of getting into a valley issue in the middle of the day. Most utilities have a valley issue at night, usually when everybody's gone to sleep, there's not that much demand for power. They've had to cycle generating units to be able to get rid of that excess power because they don't need it. And they're just basically running the base load units that are usually like in most cases, nuclear or hydro or something that is rather inexpensive, but rather large and difficult to cycle off and on. And a lot of places that are those are the large nuclear plants. So they comprise the base units in parts of the different parts of the country. That's also the large coal units. So usually cycling those or even re-dispatching those becomes cumbersome. So as we replace most of our coal fleet with natural gas, that those units are still rather large and difficult to maneuver, even while burning natural gas. So part of that base load gets affected by during the day now, when you actually get to the point where some of these valleys are actually lower than in the day that they were at night. And we're seeing some of that happen already in places like California, places like New York and places like even in the Pacific Northwest, where they have a lot of solar facilities and even in Texas, where they had the same issue with plenty of solar facilities that was creating a valley problem in the middle of the day for them. So where are we when it comes to penetration? We're talking about that, how the load curve has been offset dramatically by the penetration of rooftop solar. And somewhere about 20 or 30% at this time, right? We're looking at like another 5-10% increase year over year, when it comes to the rooftop solar installations. Along with that, we're going to see quite a bit of batteries also installed, whether it's electric vehicles, which would be the main driver, or it could be static power wall type of setup. So you have your garage, right? So there the limiting factor, of course, will be cost and will be availability given the fact that we don't have an infinite supply of lithium batteries or so there will be other type of technology that we're going to see being deployed. But for the most part, when it comes to vehicles, you're seeing that in its office becoming a limiting factor. Now, there are certain incentives, given the fact that some utilities, of course, are getting to the point where they are looking at maybe giving incentives away when it comes to having you install EV chargers at the residential level. Like certain companies here in Florida, for example, are giving you the incentive of covering the entire cost of the hardware, the labor, the permitting of installing a level two charger at your house, and also giving you unlimited optic charging for your EV off for about $36 a month with a 10-year commitment. I can personally tell you charging my vehicle, my EV runs me about $120 a month, and we use it a lot. So that's definitely quite the savings there, and it'd be really worthwhile. So with that kind of incentive, I can definitely see people inching that much closer towards making that decision and getting an EV trade. So the other challenge here is the next thing topic that we were discussing is the whole modeling and planning study issues. So when it comes to modeling this type of resource in the past so far, all they've done with it is really treat it as negative load. So as a distribution circuit usually is readily fed, as they go out from the stations to the feeders to the laterals and the different circuits, power flows in one direction from the source to the load. In this case, now we're looking at what's happening is that for the most part, some of these rooftop solars, all they've done is really offset the amount of load being served because the customer is basically supplying their own load with their solar resources as more and more of this grows. Eventually, you're going to see, of course, depending on the amount of real estate they have on their roof when it comes to their panels, or they install more efficient panels, you may get to the point where certain times of the year, they're not running air conditioning, for example, or there's not a lot of load in the house, they may get to the point where they may be at the point where their power is flowing back up the feeder, back up to the station, and back up through a transformer and into the transmission system. This is, of course, a concern for the electric utility planners, especially the transmission planners. Modeling is one issue. How do you model, rather than taking a net number, are you going to model this now a different way once you have, for example, a battery stored on there or a generator or some type of generating resource, whether it's a fuel cell or an EV or something as dispatchable at that point. So that's going to be one of the interesting challenges. There's quite a few algorithms right now. There's a lot of studies going on in place to figure out how this is going to be done. Ultimately, there are definite advantages to getting ahead of this, specifically for the utilities. If they got ahead of this, and we'll cover this later on in the segment, but they can definitely use this for their advantage if they are the ones that are managing the incentives and they're managing the rate of adoption. If this gets out of control, then it becomes much more difficult to manage for them, especially when it can really shift the flows on a distribution circuit that's usually only flowing in one direction. So that could be a challenge as well. So one of the biggest issues here, of course, is planning the system from day to day. It is quite a daunting task to do it on a transmission system, but it'll be infinitely more challenging to do the sort of next day planning on the associated distribution system. I mean, it'll be orders of magnitude more complex and more granular when you add kilowatts rather than megawatts, right, and having to analyze all that down to the distribution circuit. So that in itself will be quite the challenge. A lot of machine learning and a lot of machine operations will have to take into effect. Definitely some AI will be involved. And then in that case, you'll be seeing quite a bit of dispatchable resources that may be utilized by the utility to offset their generation or maybe even supplement their existing generation. So we'll jump ahead to that a little later. But one of the things that we talked about as well is, of course, standards. There aren't any set standards at a national level. So right now you have states like California, New York, Texas, even Florida, right, that they all have, they all basically operate on their own rules. They have their own nomenclature. They have their own vocabulary and they have their own regulations. So when it comes to the national level, I mean, NERC has a few standards in regards to renewable resources and even storage. But the challenge of course becomes how do you deal with distributed energy resources, which are way below the threshold for compliance and regulatory oversight. So this will be a new challenge. So one of the things we should hope for and maybe strive for is perhaps a national standard or some additional standards itself, regulatory standards that cover distributed energy resources or at least aggregation. Now, we talked about the definite benefit for the utilities, right? And one of the biggest challenges any utility has, of course, is figuring out where to build generation, where to install it, getting it permitted, and of course all the associated transmission that comes along with that. Very difficult thing to build those easements, very difficult to get approved. These site plans take years, almost a decade ahead to be able to put that together, right? With these DERs, if they are the ones that are providing the incentives and controlling where they would prefer some of these resources to be placed, they're now working in partnership with residential, commercial, and industrial accounts to serve as micro grids or again, distributed energy resources that together are aggregated and become a micro grid. For example, this is a couple of pilot programs that already have happened in the west coast of the US where they are looking at or they've already done this pilot test where they were dispatching the electric vehicles as a 15-minute generator, right? Meaning they were discharging over a period of maybe one hour, right? And they didn't use the entire capacity of the battery, they were just using it to supplement, for example, the generation that the utility didn't have. The other interesting benefit there is also emergency power, right? So when you have a certain loss of generation, you can call upon these different resources that are at the residential level and use them as an aggregated generator. So it'll be interesting because that could present itself with a certain type of level of reliability and if it's managed correctly. So the only way that the utility can actually stay ahead of this is they are the ones that are controlling, for example, when, where and how and how much is installed. And the best way they can do that is actually making sure they regulate the permitting process when it comes to starting both solar sites and also energy storage at the residential industrial commercial level. So now comes the third and fourth party into this equation, which is really the, if you have EVs, the automaker has to definitely buy in and approve the use of their product as an energy resource, right? Which, of course, this can get into some kind of warranty issues. But of course, I'm sure that can be worked around given the fact that the automaker will of course, I'm sure benefit or profit somehow from this particular arrangement. So that could be a partnership with the customers, the automaker or the hardware manufacturer and the utilities. There could even be a fourth party now that involves an app where this brings us to the final point that I wanted to make in this case, which is the peer to peer energy marketing. So imagine you are now in a community where you have a certain type, certain size batteries, you have two EVs, you got solar panels, your neighbors only have solar panels. You are then decided to, you're not going to drive for the next couple of days as you work from home and you're relaxing. So you decide to put the stored energy on that car for sale at a certain price. And I guess now you're selling it at peak and it's going to be a lot less expensive. You charge it off peak and now you're going to sell it on peak and you're going to sell it for less than the utility and you'll sell it to your neighbors or whatever pool within your particular neighborhood at a price that's competitive with the utility. So this whole peer to peer energy marketing gets to the level of granularity where you're basically using the low voltage system out there, which is usually the distribution buses to be able to buy a cell power between the close neighbors. Or you can sell your power to an aggregator, which is somewhere up into the distribution system. And of course, be able to participate in these DER aggregator markets. At the end of the day, I mean, not even do any of that. You can just be available for dispatch for the utilities. Say, for example, the utility needs help during what they call the end of the beginning of the lighting peak where all of the solar power goes away and now it has to turn out a bunch of generators should be able to manage, for example, the sunset, which is what they call the lighting peak. Usually a lot of stress in the system. So if you have a lot of resources out there at the load, which is really the best place to have it. Now you can support both the demand that increases rapidly over a short period of time is usually one hour. And I've seen them go up maybe two to 3000 megawatts in a one hour period. And they'll come down just as quickly. So that's an example where DERs could serve the utility. If the utility had the ability to manage them and use them as a generating resource. So that's one example. The other example, of course, is just being available for dispatch should an emergency arise, or should the utility need, for example, additional generation in a real hurry, or they need help with voltage or even frequency, depending on what sort of control or inverter system you have. So these possibilities become really interesting. I think we're only a few years away from that being widespread. Really the only barrier now is the widespread adoption of electric vehicles, or at least widespread adoption of small storage devices at the residential, commercial, industrial level. But the future's not far off and we're going to get there pretty soon. Naturally, there's a lot of uncertainty, right? There's a lot of unknowns regarding these sort of planning studies and how we're looking at this. There's different utilities of taking different approaches as to how to best plan and mitigate and try and predict, because of course, this sort of prediction requires the reallocation of a lot of resources, just by the mere fact of providing incentives for the installation of these devices. That has the cost. I mean, you may offset the cost of building generators or transmission lines, but that only depends on a certain level of adoption. So if you don't have that level of adoption, you're looking at the challenge of, of course, they won't have to make that investment. The other challenge there as well is if people buy these vehicles, are they going to participate on this, what they call dispatch market, right? So that's the other thing. So you also have to incentivize that particular product as well. So usually that has become so many different variables and so much different volatility on all these factors. They're doing what they call at least regret analysis, which usually involves quite the, they're not trying to predict every single scenario. They're just trying to predict or come up with different plausible scenarios so you can give yourself room to be able to adjust as things adjust. Now this tells you how difficult it's been over the last five, even five years in Europe, Australia, when dealing with these resources and they've had, they've been far ahead when it comes to legislation and public appetite for it, but at the same time there hasn't, there hasn't been the adoption that everybody was hoping for, especially at the utility level, right? From their perspective. So not as many customers got on board as utility had hoped. So there has to be a different way of looking at this when it comes to providing incentives. So ultimately, these did different topics. We talked about what it is, we talked about where we are right now as an industry or percentage. We talked about the challenges when it comes to modeling and planning and how we come up with studies to be able to do a long-term, near-term and next day. And we also looked at examples of some of those different states that are very progressive and forward-looking that went ahead on their own, but now they all have a different hodgepodge of terms and protocols and procedures that don't quite line up with each other. So that's examples of states I gave, but at the very end, let's talk about the benefits that this could bring if managed correctly and why it's imperative for the utilities to really be at the forefront of this sort of process and with the incentives they can offer. So I've already seen that happening in my state, specifically with the electric vehicle chargers, namely the Level 2 chargers, and those are going to be interesting because one of the plans is, of course, is that one of the larger utilities in Florida is planning to have a Level 3 charger at every gas station in Florida. So that could be a monumental shift when it comes to range anxiety for most of these in prospective EV owners. So once you have the ability of charging your car anywhere you go, or anywhere that there's a gas station, then that sort of abates and alleviates some of that fear and anxiety when it comes to owning an EV. So that's the case. You can see a lot more adoption, but along with that, something everybody always talks about is, can the utility handle, can the system, can the grid handle all this additional load? And when you look at it, it's almost as if you're, think of it, charging any of you, it takes about maybe two to four hours. Think of it as running your dryer for two to four hours. That's how much load you put on the system. So it is significant, right? But so it requires a little bit of planning and a little preparation which is why some of the utilities now are deciding when you can charge your vehicle and it'll usually be off peak, which of course helps them deal with their value issues. So again, that's another idea when it comes to DER integration is learning how to manage this resource and to benefit the utility and benefit the grid. So hopefully we'll have another segment on this particular topic as things develop, but I will be attending a few seven hours coming up on specifically DER integration. So whatever I learned there, that's different from what I talked today or knew, I will be sure to have another segment that will discuss this even further. So once again, I look forward to sharing this. I know that the people in Hawaii and of course the rest of the world are always, always interested on renewable resources and getting towards that net, not just net zero, but real zero when it comes to generating energy and the using energy. So this place like Hawaii, for example, this is really important. So again, thank you all for your time today. I really appreciate the presence and I look forward to some of the questions hopefully in the comments below. So I'll try and get to them and answer them as much as I can. And I look forward to any of our questions. So have a wonderful day and this resume, this pretty much concludes our short for today. Thank you and have a good night. You can also follow us on Facebook, Instagram and LinkedIn and donate to us at thinktecawaii.com. Mahalo.