 Good morning from Stanford, California. My name is Will Chu. I'm the co-director of the Storage X Initiative at the Precourt Institute for Energy. And together with my co-director, Professor Itui, I'm delighted to welcome everyone to today's Storage X symposium. Today we're going to have a thematic discussion around energy storage and building energy efficiency. And I am delighted to be hosting three distinguished colleagues who are veterans in this field. Let me start by quickly introducing everyone and we'll get started with the presentations. So we have joining us today, Alexi Miller, who is the technical director and lead engineer of the new buildings Institute. Good morning, Alexi. And then we have Diane Grunek, who is a pre-core energy scholar at Stanford and also formerly the commissioner of the California Public Utilities Commission. And then finally, joining us from afar and early, we have Grace Ralph, who is a senior analyst at the Hawaii Public Utilities Commission. And I hope that we'll be having a deep dive into energy storage and buildings today. And for the next two hours, that's what we'll talk about, and then getting a very spirited discussion between the five of us. So let's go in and get started. Alexi will kick us off. Thank you. And thank you, Will and all the others who have helped put this event together. Happy to be here this morning. So I just want to start with a little overview. We're going to be talking about storage in buildings, the what the why and how. And I'm going to start with a picture of sort of why do we care about this and what can we do in buildings. So just a quick note, I work with the new buildings Institute, we're a nonprofit organization based up in Portland, we're actually a California nonprofit. We've come for more than 20 years working to advance highly efficient buildings, zero carbon buildings through research through policy development and through market guidance and market transformation. We think of there being five foundations of zero carbon building policy and indeed of zero carbon buildings. So these are the foundations that sort of define what we're trying to get to in the building sector energy efficiency is has been foundational for a long time remains critical. We've seen a lot of growth in renewable energy both at the grid scale and at the building scale. I think that's sort of a pretty known quantity to folks here naturally grid integration and energy storage is is a topic near and dear to the hearts of I think most people on this symposium. And there's been a lot of growth in attention to that topic and growth in deployments out in the real world. And building electrification which is getting a whole lot more attention, including now from the US Department of Energy, some exciting announcements around that this week and ditto embodied carbon has been getting a lot more attention. So all five of these together, when carefully considered and deployed in a, in an integrated way add up to zero carbon building policy and is the kind of defines where we're trying to get to society. So a couple key themes. I think we all recognize the way buildings interact with the electric grid is changing quickly. There are new and changing pressures on buildings and those are those pressures come from market sources from regulatory sources, and it's, it's changing rates it's changing the very structure of the energy system we're moving toward an interactive grid. So if we want to keep having our buildings do the things they do where we have these great places to work and play and live. We need to consider what that means what the building operations mean for the grid operations and vice versa. All that is in the context of this big push to decarbonize our energy systems in general the electrical grid and other energy systems. So we move toward a future where we've got more renewable energy, making up, you know, more of the mix. These systems need to be better integrated with each other and energy storage is going to play an important role in making this happen in enabling buildings to optimize that participation in tomorrow's grid and enabling buildings to actively help decarbonize our energy systems instead of stand in the way of it. So just briefly, I think one could consider the electrical grid of the past as being something of a one way street. Of course, it's the wires go all the way around, but the energy flows go from big central power plants out to offices homes industry etc. We're moving toward a future where there are two way flows from various different nodes across the grid, we may have energy storage at the large scale and renewables at the large scale we may also have those resources behind the meter. In offices homes industry etc plus you've got moving energy storage in the form of electric vehicles. This, this vision has a lot of a lot more potential but as you can imagine it has the potential to be a lot more complex and to need some more careful integration and careful deployment. So I'm going to focus my, my talk today on behind the meter energy storage in in some of these settings and what that means for buildings what that means for the grid and how we get there from here to some extent. In my personal context for the last, I've been with nbi seven or eight years, and I've been managing the tracking of zero energy and zero carbon buildings and so from 2012 to now we've seen more than a 10x growth in these zero carbon buildings, it's, there still aren't all that many, but we're getting toward much larger numbers. And so that started us thinking well if we get these lots and lots of zero energy buildings, we get this to scale that's great what does that mean for the grid can we really do what we're trying to do, achieve our larger goals which we'll get to in a moment, if we do have thousands and hundreds of thousands of zero energy buildings. Any about that and I like to think of what it would mean. I guess I'd like to think of there being sort of two poles of zero energy buildings. The graph here on this slide shows the same building a zero net energy building a building that nets to zero energy over the course of the year in this case it's netting over the course of the day. On the left is the building with doing so with only PV so a whole lot of solar panels on the roof. It gets you to zero but as you can see upper the upper left graph, the green line is the solar PV and it exports, mainly around noon, obviously the solar panels are not putting on power at night. So there's this the lower left graph you can see there's a large net load where you're pushing energy out to the grid during the middle of the day and you're pulling energy back from the grid at night. That's all well and good but you're treating the grid as an infinite battery when you do that and indeed the grid is not really an infinite battery there isn't infinite capacity to absorb energy and send it back later. So the building on the right takes that into account now you've got the same building but with a real focus on deep energy efficiency so the load is reduced in the first place, and then some focus on load shifting or demand flexibility that has moved some of the loads you can see that dark blue section in the upper right moved them from the late afternoon to around noon, which better matches the solar load shape, and you don't need as much solar since it's so efficient. So then you get the lower right which which has much lower exports and lower imports right then and it's easier for the grid to handle hundreds of thousands of these buildings on the right, then it is to handle lots of them as they are on the left. So as we push for zero net energy buildings, we want to be pushing for buildings that are good grid citizens if you will that are that are easy to serve and we can really scale this thing up. Why do we care about this at all. What's the point it's not really about energy per se we talk about energy efficiency. But ever since the the oil crisis of the 1970s, I would posit that that's about the last time that source energy was truly critical on a society wide basis. The US has been the largest or one of the largest energy producers in the world for several years now. It's not about running out of energy, it's about the impact of using all that energy and and those are basically greenhouse gases or carbon and cost. So those are the two fundamental drivers and I would add a third now, which is resiliency this is a picture of Puerto Rico, where massive storm damage resulted in the power grid going down for a shockingly long time, and had enormous social implications and energy storage. I'm going to go back up a slide energy storage can address all three of these things carbon reductions cost savings and enhancing resiliency about the buildings and the energy systems on carbon. This is a graph of 2020 marginal grid carbon data in California from the National Renewable Energy Lab Cambium data set. So those low carbon hours the black or darker color shows higher carbon hours. So months go from the left to the right and hours go from midnight down to 11pm from top to bottom. You can see the California grid is much cleaner during the day than it is at night and there's also some seasonality right it's it's cleaner in the spring than it is in the late summer and fall. That's 2020. Here's 2030. The general picture is the same things clean up a bit more during the day, but you still have this this diurnal swing in which, when the sun is shining, the marginal carbon is low or the marginal carbon emissions factor is lower the grid is cleaner as opposed to at night. So you can think of there being a sort of a you can play the carbon arbitrage game right charge low discharge high. In terms of cost us do we just released a national roadmap for grid interactive efficient buildings. This came out on Monday. I highly recommend taking a look, and they estimated that there were national savings of $818 billion a year or between now in 2040 100 to $200 billion of savings available from grid interactive efficient building strategies. These are strategies that think back to that graphic of the the two zero energy buildings it's that kind of thing right demand flexibility load shape modification etc. So the dollar value is pretty big. And actually these the this focus actually doesn't even include some of the energy storage strategies that I think this group is is really focused on. So, there's a lot of savings available is the point okay, great. So how do we get there from here. Well, I'm going to talk about three, three basic areas of approach. First are passive measures so traditional energy efficiency measures, say, insulation in the walls, or thermal mass. So we have an impact on the building's load shape that is to say when the building uses power during each hour of the day. The graph on the bottom here is a load shape, the gray line is a baseline load shape, and the pink area is the proposed so it's a building without thermal energy storage and a building with thermal energy storage that we modeled to support the grid optimal buildings initiative. I'll get to what that is in a bit. And basically what we found is the use of adding adding thermal energy storage and then putting some temperature controls in the building to take advantage of it enable this building to shift its peak from late in the afternoon to earlier around noon, and also reduce that peak at the same time. So permanently installed building features a can have just a overall impact on the load, including during peak hours in fact especially during peak hours, and be can enable further, further impacts. You can also have efficient mechanical systems HVAC hot water, lighting, etc right these these, these are systems that demand energy to run, and they often demand more during peak hours, peaks are driven by in large part air conditioning and other mechanical systems, you know summer air conditioning right that's your classic afternoon peak hour driver. In there in the picture is heat pump water heater that's actually the one I helped my mother in law put into her basement recently and it's four times three or four times as efficient as her old electric resistance water heater she's quite happy with it she calls it her spaceship. But the impacts of these highly efficient systems are obviously that they reduce loads during peak and off peak hours. So the application for energy storage, which is that if you are using say battery storage you can get more out of those kilowatt hours if your systems are more efficient so they're they're a multiplier for the impact of battery storage and then you might also have thermal energy storage, whose round trip efficiency is enhanced because the systems are more efficient. And indeed you can have some kinds of thermal energy storage that have a greater than 100% round trip efficiency. And then we have active or active systems or systems that provide demand flexibility. I think lithium ion batteries are the sort of the core technology for a lot of folks listening so I don't think I need to get into a lot about what that is here, but these have very clear cost carbon and resiliency value propositions. So he likes to talk about shed that's dropping load shift that's moving load and shimmy that's short real time adjustments for things like frequency regulation other answer services. Okay, those are good. I also want to make the point that we're talking about what you can do in a building. No building is an island. We're talking about decarbonizing the energy systems and we're talking about saving carbon cost and enhancing resiliency across both the building and the whole systems you can do this at multiple grid nodes this can happen at the building, you can have a micro grid, there can be controls at various points from the building up to, you know, up to the generator all the way up the grid that have the ability to either control or dispatch resources etc. So storage resources may be deployed behind the meter or all the way up. I'm focusing mostly on behind the meter, but that's partly just for sort of convenience and being able to talk about it, but I do want to make the point it can happen at various nodes. And interestingly, a paper from Lawrence Berkeley lab just came out. It's really about much higher up on the grid system right like the generation system and the question was, is it worth more to have solar plus storage or renewable plus storage than it is to cite these things independently and the answer was, yeah, it is. And I would posit that as you move farther down the grid nodes toward behind the meter that value differential or that that that same theme holds that it's still worth more to have solar plus stores and it is to have just solar or etc. All the way down to behind the meter plus you've got all these other benefits right you can minimize your demand charges you can play nice with time of use rate structures enhance resiliency, all those good things. Now, I mentioned CO2 arbitrage charge low discharge high, and I wanted to get a little bit into that we've been doing some analysis with us at NBI to support the grid optimal buildings initiative. We've been doing some analysis to say, Okay, if you have a an energy storage system. You want to be able to use that system to charge when the carbon is low and then use that energy to provide power either back to the grid or to the building systems when grid carbon is high. I'm sure there's a lot going on in this graph. The little red dots at the top of the top 5% of grid hours, the red dots at the bottom are the lowest 5% of grid hours in terms of carbon so y axis is is carbon. And then all the rest all 8,760 hours are represented here. The dark green dots are peak hours in terms of time of use and this happens to be the Southern California Edison. Residential and build it as both residential and business time of use rate structures they have, you know, certain hours is basically summer afternoons it's actually just afternoons. So, these are the hours during which you should be charging and discharging your carbon and you can see there's a pretty significant diurnal swing say we're looking at at around the 5000 5600 hours that's mid to late summer. I'm a couple of those very highest 5% hours but the lowest hours are actually quite low. So you can imagine charge at the bottom discharge at the top, and there are some hours where you can really take advantage of the time of use rates as well but as you can see it's a bit of a, you have to be a bit careful optimizing that. That's California here's Florida. Now, it looks broadly similar you can see there's still a pretty good swing. So much of the year. Now I want to point out the axis changed. Now we're at 800 kilograms of CO2 per megawatt hour. If we go back to California with the same axis. It looks a bit different. So, the swing still exists, but Florida's grid is so much dirtier than California's that that you've got a lot more to play with, if you will the swing is is is higher and larger. So when you're thinking about dispatching energy storage and buildings. This is some of the analysis we're doing to say okay where should we prioritize it locationally, what kind of energy storage makes sense thermal battery etc. And then when do you charge when you discharge and how do you do how do you do that so that you optimize both cost and carbon and by the way make sure you get that resiliency benefit as well. I mentioned grid optimal. I'm leading the grid optimal buildings initiative, the central focus of that is developing new metrics for quantifying building grid integration and defining the quality of interactions between buildings and electricity grid. So we've put those metrics together. This slide deck has links to a blog and a peer review journal paper on them. They published a lead credit so buildings can get up to three points for enhancing building grid integration or enhancing building grid interaction quality. And those are that meant that that credit is based on these metrics. So that's that's out there and of course energy storage is is a core pathway to achieving those points into enhancing the outcomes of building grid integration as measured through the grid optimal metrics. Those cover both the passive side like load shape modification and the active side demand flexibility like battery dispatch or thermal energy storage dispatch. Right now we are leveraging the work on those metrics to put together utility program criteria. You can see the supporting members on the right and if anyone from these organizations it's on. Thank you for your support I appreciate it. The organizations are considering pulling this into to better integrate their energy efficiency and demand response programs so that we can have this this highly integrated approach to building energy usage that considers both time of use energy efficiency demand flexibility. And that's one of the things that we're trying to do in terms of cost to carbon and resiliency. So we're putting together trying to get this out in the utility programs. Also putting together some market facing design guidance so that a an architect and engineer building owner, or a building operator does not need to know all the stuff about how the grid works at all the different nodes down the way. They can say, Okay, give me the 8020 80% of the benefit 20% of the effort. Give me a concrete something I can, you know, sink my teeth into how do I improve the situation here can I get some points in lead can I get some credit in utility incentives, etc. We're also working with various stakeholders across the country at the state level in the national level to think about how does this fit into code standards and policy frameworks and policy frameworks is is is really critical and we'll be hearing So, in short, you know, we're, we're actively working on these topics within grid optimal or accepting pilot projects, program participants, there are a lot of ways that one could participate. Basically, the, the point here is that buildings can be active participants in a decarbonized grid, or they can stand in the way of the transition to a decarbonized grid and I hope that that we are able to work toward and achieve a future in which buildings actively encourage the transition to a resilient, affordable, safe and clean energy system. So with that, I'm going to close here and I guess we'll have a little Q&A session, and then we'll proceed. Thank you very much Alexi for getting us started. I think I bought exactly the same heap of water heater for my house. The rebates really good rebates. Exactly, exactly. Well, let's take a few questions here. Let me, let me begin with a high level question so you discuss the opportunity for energy efficiency in terms of dollars, and it's indeed very significant. Could you break it down for us in terms of residential versus commercial versus light industry. How big is the pie for each one of them. Well, you've got, you've got energy efficiency and you've got demand flexibility or demand response and the nice thing, the beautiful thing about this grid integration thinking. DOE calls it grid integrated efficient buildings or GABS. Everybody loves that acronym but we're talking about GABS. The interesting thing about GABS is that it allows us to start to integrate the what has previously been siloed energy efficiency programs or efforts to tap into energy efficiency potential and demand response. That's the demand flexibility side of things. So the value potential has, they've begun to combine those two. That said, that didn't answer your question. I know that was that was lateral, but the broadly speaking we're talking about, you know, it's not it's not a third a third and a third it's probably 40% buildings. So maybe a little less commercial and a bit less than that industrial but that's, you know, don't hold me to those numbers it's commercial and residential are often broadly similar in terms of their efficiency potential, and also impact on emissions and then industrial is somewhat smaller. But there are some real wild cards that are happening right now, I would say that the two big ones are electrification of transportation and electrification of building loads. And as we get a lot more building electrification and transportation electrification, that's going to drive some significant changes in how the electricity grid works and what it how it interacts with buildings. So, whether you can use all these EVs or some of these EVs electric vehicles as as, you know, two way resources to provide power back to the grid or back to buildings. So we have some significant implications on the potential for efficiency and demand flexibility, and also on how we get there from here, they're being indeed carbonized energy system. So, that's something of an answer and something of a tangent. Maybe later on we can also talk about the incentive and the on the regulatory side how it impacts the different segments of buildings, maybe along the same line. Let me also ask you about new building versus existing buildings I'm not sure if NBI implies that it only works on new buildings. Let's talk a little bit about sort of the opportunities and challenges when you're dealing with retrofitting buildings to improve its efficiency versus building a new building, you know elite certified building from scratch. Yeah, we do think about both new and existing buildings, despite the new in the name. So, within new buildings, a lot of our focus has been on moving the needle on codes and policy advancing model codes and advancing deployed codes in states and other jurisdictions. We've moved quite a long ways. So there are, I think that the new buildings are often a bit simpler to talk about because you've got it. Here's what we would do in the absence of a program or a high efficiency approach or highly flexible approach and here's what we are going to do it's better. The existing building, something like one or 2% of the buildings are of the building stock is new each year is the stat I've heard. So, over time that adds up and we do need to focus on new construction, but that does mean that, you know, by 2050, as if I remember this right, most of the buildings that will exist in 2050 are already standing right now. So, if we're going to achieve our big bold goals of decarbonization and energy efficiency, then we have to focus on existing buildings and the the approaches are often much more custom. There are some interesting programs that focus on deep retrofits. There's a program in California called realized run by Rocky Mountain Institute that is basically trying to scale deep retrofits in a way that basically sparks a new industry to do industrialized highly scaled deep retrofits, especially housing it's based off the energy sprung program from the Netherlands and retrofit New York is doing something very similar out in the state of New York. So these are efforts to basically create and scale up quickly a new industry to do very in depth and very fast deep retrofits of buildings, but which is going to be critical, but then you've also got there's some careful thinking going on for in we're working a lot with New York so there's some careful thinking for example in New York about how much investment should we put into modernizing the distribution grid. Transmission renewable generation at scale big wind farms and big solar. Envelope improvements in buildings transitioning from gas boilers and furnaces to heat pumps, other efficiency measures so that you've got this whole slate of options. And there's some some deep thinking and some careful analysis going on to figure out what's the most strategic way to make our investments, including deep retrofits as well as these other options to get there from here, but energy efficiency has been the first fuel it's the most affordable, you know, way to get kilowatt hours cheaper than building power plants that has been the case for a long time. And it's still the first fuel. So that's the first place we want to look is operational improvements and retrofits of existing buildings and that applies when we're talking about energy storage as well. There's behind the meter opportunities on thermal battery and energy efficiency. And the more integrated an approach we can take to that that considers. Let's think about deploying our storage and retrofit or and an improvement to the building systems, the better we can we can be strategic and achieve our goals cost carbon resiliency. Alcinia likes and maybe that's like two more question. Let's talk about batteries specifically electrical storage and also thermal storage. We have heard in our symposium, a number of talks on long duration storage stationary for the grid, and there is a trend to go to longer storage and really look at the cost of energy stored. What is the trend in sort of the residential or the smaller units. Is there also a need to push toward, say beyond a four hour storage or beyond a hour storage. What are the considerations there and how are they different from a larger scale energy storage. I have seen behind the meter I have mostly seen a focus on something like four hours. And I think that's probably fine. Now, if you're talking, but you can do a lot more behind the meter I think I mentioned that we've got cost carbon and resiliency as as key drivers. And I think for a lot of folks, putting a system in their house, or especially smaller commercial but commercial as well. The thing that often tips people over the edge is not the carbon savings at the cost it's the resiliency aspect. So, if you can pair that solar that storage system with a source you've got solar plus storage and you can recharge your, your storage during the day. You can designate critical loads. For example, some inverters have the ability to either completely island or turn off and power just a little couple of plugs so you can keep your freezer your fridge on from your solar, and that would be extended through the storage. And that's, that's going to push more people to to install these systems and then we just need the carrots and sticks if you will to encourage them to integrate those into the larger system so they can help us achieve our bigger energy system goals and utilization. But I think I have not seen a ton of long duration storage behind the meter. And it may often be that at least at this point with current technology it makes more sense to, to target that four to eight hour range maybe, and then find ways to extend its impact. You can use energy efficiency through solar plus storage, rather than trying to put a lot longer or more, you can, you can do more with less like I mentioned with highly efficient systems, keep up water heater. It's three or four times as efficient so you can run it three or four times as long on the same kilowatt hours so I would, I would posit that we're well served to think about what is the point of the storage we're installing. How long can we get these building services we're trying to get, keeping the fridge running. Like I said really resonant with that, at least when I tried to convince my wife that we should install a battery system in my very electrified and solar powerhouse it's always being about resilience rather than the return on investment through energy opera charge so I think that's a really good point. Maybe the last question, safety. What are the benefits of adding energy storage to two buildings. Are there any concerns about safety in the same way we think about electrifying transportation. Is that on people's mind and what is MBI doing to address this aspect. Yeah, there are. And one, one way we've had to do with that is in the national model codes. We helped put together some language for. It's basically an optional thing and jurisdiction can adopt it's called optional appendix. It's where the jurisdiction could say we're updating our building energy code and we want to add this piece where you when you build a building or do a retrofit that triggers code. You should make it solar ready or storage ready or solar plus storage ready. Like, that's basically saying you don't have to put the storage in, but make sure you've got a breaker on the box. It's the right size make sure you've got conduit that's the right size. So when you do want to put that in you're ready to go. And it's somewhat similar for solar ready right you your electrical systems are set and they're ready to go in the development of those solar plus storage ready provisions we had to think about and talk with experts on fire safety and electrical safety and such. So, at least on the code side that's that's being pretty carefully considered and on building codes that the fire safety and the electrical side they have their own seismic to they have their own places in the code that may not be right in the middle of that solar plus storage provision. It's it refers to somewhere else. The, you know, there's the safety in terms of, can I make sure my battery does not light my house on fire. And that that's pretty important. Obviously, that has something to do with where you put it and the details of the installation so that's not to be ignored. But then there's also that resiliency side, you know, can my battery or my, my system. Help me be safer in my home during a wildfire event or a power shut off, you know where my, my powers shot as as many people in California have learned or have seen, you know, can I can I achieve better safety better air quality other metrics. Through having this system in place. So, there are a couple different aspects. We have not gotten deep deep into explosions and fire safety, basically defer to the experts on that one. Thank you Alex I love thinking about the improvement in safety with energy storage I think that's a great way to think about it. Alexi, thank you so much for more questions but unfortunately we will we need to move on, but thank you for getting us starting we'll be back for a discussion after Diane and grace. So next, if I can have Diane, have you come to the stage and give us the next presentation, Diane floors yours. Thank you. Okay, great. Um, so I am, excuse me, the policy segment of this presentation. And I want to thank Alexi that you really set up a lot of what I'm going to be talking about. And also the fact that you've covered so much of the technical side, but I'm going to do a little bit deeper dive now onto the policy side. And I should say my focus is going to be on California, because it has been a leader, but I have little parts of this that I'm also going to talk about that are applicable elsewhere. So I wanted to start off with just the key takeaways that storage can thrive with policy support, but it's not a one and done I mean the more that I got into preparing for today's panel, the more I realized just how complex the storage policy is, especially when you think about how it's interacting with the energy efficiency policy with demand response with our various market mechanisms. So good policy on storage has to be across multiple dimensions. And here in California, energy efficiency has been our foundation for more than 40 years that when I was commissioner with the public utilities commission I had the great honor in my mind of being the lead commissioner on energy efficiency. And so smart storage policies smart policy around building starts with make that building efficient, the less that the building uses the less costly it is less impact it and then your solar is properly size. So that it's serving the load of that building, but then with storage not only are you getting the benefits to the consumer but as Lexi so well said, it can be a good neighbor a good companion with the grid itself. I'm live here in California I'm associated with Stanford and I will say California is the leader on when we're talking about targets programs incentives codes for both new and existing buildings and I'm going to get into that more. I'm delighted other places getting into this. You know, beat beat California we all need to be moving ahead. The behind the meter, BTM, you really have to think about and I think Alexi helped us start to understand that how you're balancing benefits to the customer to the local distribution utility as well as if they're also operating the transmission side and and grid benefits the grid operator. And sometimes those are all in alignment, but sometimes they are not and I'm going to give an example of this. And so you need to think about which of these are you targeting how are you optimizing how are you balancing. We also are still developing, not just in California but I talked with experts around the country. It's a work in progress with our market rules at the wholesale level, as far as methodology platforms and especially interacting with some of the utility demand response programs. And I'm going to be talking mostly about the state level, but federal support is critical. I'll end up with a little bit in that area but especially in the R&D and some of our tax mechanisms so those are my takeaways as you think about the presentation for me and others today. Next slide. I'm going to be talking, I'm doing a quick tour of policy 101, then the drivers for policy and buildings, California's journey, a little bit on wholesale markets and then ending up with legislation. Next slide. So, I found teaching at Stanford, it's usually a technical audience and that may be the case today that it's good to start off with, what do we mean when we say policy. They're specific to laws, regulations and programs and they try to encourage and support a specific outcome. The key thing is actually policy is made by governments. You can have advocacy for policy by a whole range of stakeholders, but it's really just government that makes policy, it's at the international, national, regional, state, local level, and it is across legislatures, governors, chief executives and then implementation by agencies. And we also have markets, they can be run by private entities like here in California, the CAISO, it is a non-governmental entity, but under our federal laws it is regulated by a governmental agency, the Federal Energy Regulatory Commission. I should note that going back to the government at the state level in the United States, every state has a public utility commission, that's where I was a commissioner that regulates the rates but increasingly implements programs on the clean energy side with the, what we call industrial utilities like here in California PGD, Southern California Edison, we have a separate body of utilities, the municipal utilities that are controlled and run at the local level and then we have a hybrid in California community choice aggregators that are created through a governmental structure but lightly regulated at the state level. Each state in the United States also has a state energy office, and here in California it's the California Energy Commission that I'll be talking about. So we actually have a lot of tools for who can be doing policy. Next slide please. So I just went through basically who creates it again at the federal level, we've got Congress, we've got our primary energy agencies, the DOE FERC and the Environmental Protection Agency, especially as we're thinking about clean energy and climate. The state I talked about we've got legislators, governors, PUC, state energy offices, and then our city councils and publicly owned private entities just to emphasize they sure do influence they advocate they come up with great ideas, very important for implementing but they don't actually create the policy side. Next slide. So Delia Lexi set the stage, our tools that we have on the policy side that we talked about our carrot sticks and sermons. Carrots are the money side tax incentives subsidies rebates grant but they can be those are direct but they can be indirect facilitating or streamlining permitting because that saves saves costs down the road. Sticks are the mandates and sort of the most well known is our renewable portfolio standards, but we also have energy efficiency targets requirements codes and standards are a major one when we talk about buildings I'll be getting into that. Because of some of the really exciting developments of how codes are starting to think about storage and then sermons these are labels energy stars best practices. And in my decades of policy, you know, combining all these tools is really what's most effective the problem is it's difficult to think about how do you coordinate. Generally long term so that there's a good signal to the market, but all of these tools together are what makes for good policy. Next slide. So why do policymakers care about storage and buildings and again I'm on the behind the meter. I've heard about it, reducing customer cost consumer costs you know people generally are the ones who live in the buildings are going to be that making the purchase decisions for putting storage in their home or owner of a commercial building. Generally speaking, though there is resiliency, you're looking at the cost grid optimization we again had a great lead into that from a Lexi how you can reduce the peak reliability and deferring transmission and distribution upgrades that that as you aggregate storage and other buildings. That's where some of the most interesting work is going on renewable integration again we've talked a bit about that our greenhouse gas emission reductions and then the resiliency. But these are the core reasons why policy makers are thinking about storage and buildings together because there were some real benefits there. Next slide. So here are our main policy tools for supporting encouraging behind the meter storage and buildings. I'll go through again the three categories I talked about. And I want to give a shout out to the National Energy Storage Association that they have a good web page on state level policies for behind the meter storage and building. Some of their ideas here as well as some of my own that sermons doing some cost benefit studies to actually understand what works in your jurisdiction and what doesn't best another sort of over on the other side is best practices in local sustainability, because you generally have to get some sort of interconnection you have to get some sort of approval when you're putting in either a major retrofit in the building or if you're doing solar plus storage sticks. I'm going to be talking about in California procurement targets, having the local utility having to procure a certain amount of storage and then designating some of the theme behind the meter storage. Also, where you have in the state level utility planning processes and integrated resource plan distribution planning, transmission planning. That can be mandates from the regulator that says you have to think about storage you have to show where it's cost effective and how it can be integrated. And then the carrots. I'll be again talking about that but incentives for actually installing behind the meter storage, you can have your rates, so that they are set to encourage storage rather than to be ignorant about it in California we've been moving towards time of use and that's really a driver if you don't have any differential in the cost of what your electricity. How much you use and when you use it, it's actually very hard to make that business case for storage because storage is looking at the time of day or the season, and so the rates are hugely important. Business models that across the regulatory structure can think about different services provided through our storage we've talked about demand response where you can use storage to lower that peak wholesale markets I'll be talking about. And then just support to reduce those soft costs so these are the types of very specific policy tools when we think about storage in buildings and behind the meter and you can see what a wide we have a great range of tools, but how again you think about what do you put in when the market is actually quite complex. Next, please. So, I'm now moving to California specific. It is actually, I think a pretty darn good, good story to tell that California is a leader in storage. So let me just go through them, that we start with our state laws on electricity and climate and we have two major ones I mean we have a host of others but SB 100 basically says a mandate, the state is going to be getting to zero carbon electricity by 2045. And then we have a second law SB 350 that says for our economy why carbon emissions by 2050 we are committed to getting 80% below our 1990 levels. So this is what drives a huge amount but it gets down to it includes stories what is driving as well as what we've already talked about building decarbonization are zero energy buildings, etc. I've talked about in California we have two major agencies the Energy Commission and the California Public Utilities Commission, I'll be talking about these three tools specifically but mandated procurement of storage incentives that are offered. And then the building code. I don't have time today to talk about R&D but I do want to note that in California we've had long standing support for R&D at the state level it's currently assessed through a small charge on our investor own utility electric bills and then there's another gas fund as well and in the current three year cycle. It's covering about $550 million. So it's very large, it includes money that can go to storage and includes from that money that goes to behind the meter and it's not just R&D but it's also thinking about best practices applied pilot projects so I wanted to be sure I mentioned that. And then we have our wholesale markets is another driver here in California for how we're thinking about storage. Next slide. Let's talk about procurement. Remember I said that that's a major tool it is a stick it is a mandate and in California in 2010 became the first state to mandate LSE is load serving entities that that's our utilities but it's also community choice aggregators. And then we have some portions that are served directly by our energy service providers for direct access but basically the law passed and said to the CPUC you decide should there be targets and under the leadership I will say of former commissioner Carla Peterman. She said we're going to go ahead we're going to do it and we said I think I'm pretty sure that was the nation's first targets on here's how much our investment on utilities have to procure for storage. It started off at about 1325 megawatts by 2020. That's coming gone it turned out we could do that. Usually what happens when you set policy targets you can meet them. Everybody gets working on it. It's now 1500 by 2024 I think we've surpassed that. And in the last revision it actually said we want to have at least 200 megawatts of that be behind the meter. We also had another law in 2016 that authorized the PUC to go even further with storage and specify that it could approve up to 125 megawatts more of what has to be procured for behind the meter. And we have so far I think that we've had one approval that's come from PG&E on a behind the meter proposal for thermal storage. I think the others are still being worked upon. So one can go to the website of the California PUC and see sort of where we are on the targets but overall it's been quite a successful use of this policy tool. So next slide. That was the sticks the mandate you have to go out and procure and I think that if we're going to really embrace storage. We do need to where you have utility procurement requirements to include storage and to specifically say a portion has to be from behind the meter because that really then gets the market going. But there's the carrot side the money side and that's what really also is so important. So we in California started in 2001 a program called self generation incentive program. And in my research for today's talk. It's the longest running program on sort of the incentive level for distributed resources in the country. But but there are also programs by our municipal utilities. This is the one that is run through the California PUC, which as I said does not regulate municipal utilities here in California our units provide about 20% of the electricity so they're quite a significant player and they run their own programs and they're also quite involved in this. So we started off with having our program just on solar PV because frankly in 2001. That's what people were thinking about. But in 2008 it was enlarged to be solar PV and storage. And then in the next year in 2009 it was authorized that you can give incentives just for storage. You know, energy storage alone energy storage alone that in 2018 it was extended under a state law that authorized the PUC to keep this program going because the cost of it is collected through rates and then it becomes this big pot of money that then can be put into programs that are providing incentives rebates to people installing these systems in the buildings and what's interesting is that over 620 million 80% of the funding is going for new behind the meter storage. And that's because in good policy if you set up a long time incentive system, a major goal of it is to drive down costs, which you're subsidizing. And we've had phenomenal success around the country around the world on driving down the costs of solar PV that's put on groups. So now we're thinking about well let's take that same long term approach, massive amounts of money that are public money through through electric rates and drive down the cost of behind the meter storage as well. So we're thinking for why we have the majority of the money going now towards behind the meter storage, but there certainly already is discussion, because these monies go quickly about how should we extend this program what's going to be the thinking of what we're going to accomplish with this. There's other customer incentives. We've talked a bit about you can lower your bills that's a direct incentives that the ones on the SGI P program are lowering the cost of buying and installing the system, but then once you have the system, you also have incentives through good rate structure to be able to lower your bills and that's where storage comes in with their California OU rates being able to decrease the usage the purchase of electricity during peak periods, especially with commercial industrial customers that tend to have high demand charges that's another great use behind the meter storage. And then you have a bit about. I'm sorry, you also have the utility demand response programs and wholesale markets of distributed energy resources and storage. When it is also coupled with solar can be good ways to participate in these markets. So again, I want to emphasize we have a wide range of tools to be encouraging behind the meter storage and buildings. Next slide. So now I am going to shift over to the building codes, which oftentimes isn't talked about as much but I am preparing for this got really excited about it that I hadn't studied California's code for, you know, a bit of time. I want to thank Energy Commissioner Andrew McAllister who's the lead on it for talking with me, and also the head of the building management office at the Energy Commission will Vincent for doing some great information gathering for me and just talking about this. So here in California, we have long standing building codes, and they have been oriented towards energy efficiency, but we're really looking at how can we be decarbonizing our buildings and the goals of our, our code is called title 24 are. And that's historically been we want to do energy efficiency because we want new buildings they apply to new buildings are major retrofits. We want them to be efficient, we want them to be using as little electricity or natural gas as possible that lowers costs. It also helps lower our carbon usage. So now we're thinking increasingly about how can we be more sophisticated using a building code on lowering carbon emissions. Overall, we want to use our code to enable pathways towards all electric buildings there's some really good thinking about how we're getting to that pathway. We want to minimize our buildings impacts on the electric grid we hope that's one of the things that's coming out today. We want to be promoting demand flexibility again Alexi really I thought did a good job of laying the understanding of why that matters. And then we want to provide tools to the state code for what we call reach codes in California local governments can adopt more stringent energy codes than the state one, if they're approved by the Energy Commission and I'm going to give an example of that. So our current code went into effect January one of 2020 and it was the first code state building code in the United States that requires rooftop solar on single family buildings and low rise multifamily and in California and our cold low rise multifamily are up to three stories. So this is where it actually required a solar. Then it said it did a lot of examination of solar and storage and that's where combining those together you can have smaller PV systems, which lowers the cost then of that new building makes it more affordable and then once the building is occupied, the actual occupant costs are lower because of lower bill so one of the things that we have in our building code in California is energy efficiency we have a very, very strong focus on that, but we want to have what we call right size solar PV. We're not just trying to throw on as much as you can you want it size to match the load in the building, and the load has been reduced through energy efficiency, and that's a real team we have so then. And the current code did is it didn't require behind the meter storage, but it used a very elegant approach I think, which is, because much of our code is based upon performance, as well as prescriptive measures that you can get performance compliance credit through installation behind the meter storage, and it has three options and each one of them has more increasing sophisticated sophistication and therefore you get a higher performance credit. The basic control allows battery charging only when the PV production in the building is greater than the onsite electric bill. And discharge is only when the PV production is less than the onsite them load so you're really focused on, you know, let's get it so it's really offsetting the electricity usage in that building. The next one is sort of the more sophisticated one it's having the discharge being during the highest priced to you hours of the day. And so that's again matching where our bills are going. And then the most advanced which is a man advanced demand response control that allows the storage system to charge and discharge in response to signals from the local utility, or a third party aggregator and this is really the vision of saying that you want to have your storage, not just meeting the needs of the customer, but also being a good player with the grid where you get the controls, as I said from a local utility demand response program or from an aggregator who's then interacting in the wholesale markets to them be using that storage at the times when the grid most needs it, and to be charging at the time when the grid doesn't need it. So it's again I think a very sophisticated way of using a building code with behind the meter storage and it has in the cost benefit analysis all sorts of ways of using of examining use cases to make sure that this approach is is working. So that's the tool we have in California now. Next slide we're now in the process of developing and adopting our new building code and I actually I want to make sure I mentioned. Our codes in California for the building side do not include requirements on electric vehicle charging where the charger is connected to the building, and that is because that type of equipment can be moved. And so it's not considered a fixture within the building there is thinking going on as we get to larger arrays of the charging particularly at commercial sites that maybe we can at least have some incentives in the code similar to what I've just talked about to have those EV chargers also be working well with the building load and with the grid itself so here we stand with the new building code the California Energy Commission just last week released its formal proposal. We will adopt it after public comment and propose changes in August, and it will become effective January 1 2023. We always have a good lead time so that the industry can get ready for new code provisions. There will be no change in that code with regard to what I just described for the single family and the low rise multi family in terms of the solar and the incentive for performance credits for behind the mirror that part will stay the same on the single family low rise. But the big change is that it will. It proposes that the same approach will then be used for high rise multi family, greater than three stories and for selected types of buildings within the non residential sector. And this is again a major step to say we are really embracing the role that solar is playing and encouraging are behind the meter storage. There's lots of use cases about because with storage you can and efficient buildings you can reduce the amount of solar that's required. So it shows that this type of approach will be cost effective. The increased upfront costs will be payback over the occupants usage of the building during the building's lifetime. It also is reducing the annual solar exports which because of the infamous duck curve in California matters a great deal. And the estimate is that this new provision will add about 100 megawatts or 400 megawatt hours of behind the meter storage annually here in California. But there were some limits that the analysis showed and this where is where we aren't quite where we need to go in terms of harmonization. For the controls on the storage matching the actual time of use dispatch scheme that it was noted that there is more work to be done. And really the price signal that our California retail rates while they are on time of use. They're not completely aligned with the California system peaks because we don't have what's called dynamic pricing where the price signal is absolutely aligned with what is happening. Pretty much in real time and the note was that this the dispatch constraint that is imposed on the battery system where essentially it's aligned with the to you base schedule rather than being able to look at the peak that that was a decrease the solar and battery benefits by about 10%. So this to me is interesting as sort of looking forward how how our rate systems may evolve combined with our controls to really get a much closer alignment. Next slide. So I wanted to just end with a quick look at the wholesale markets. As I said in the United States those are set through our are run by our independent system operators by our RTOs are regional transmission owners and they are regulated the FERC level federal level. FERC issued order 841 if you're in the policy storage world you know 841 that's where it really said our RTOs and ISOs have to adopt market rules that allow that don't discriminate against electric storage including behind the meter to participate in wholesale markets. We then have had subsequent orders ordered to to to to and to to to a last one was just adopted this this year and those are further directions for how to embrace distributed energy resources in market rules including storage and the big picture is that market rules are organized markets everywhere we're set up under the old system where we had base load power plants and then we had gas fired for peeking all very controllable all being able to say your system is operating 24 seven and as I think we all recognize the world we're moving into or have moved into is very different and a storage device is dramatically dramatically different from a base load plant or a gas peaker and how you have the market rules so that they don't discriminate against so storage solely because of his technology that is the world that we're all moving in. And in the FERC rules to participate in wholesale markets the storage resources have to combine be 100kw or larger and that's why you hear the talk of aggregation that you basically have third parties that are entering into contracts with storage and if it's behind the meter with building owners and then setting up controls and then in the aggregate those can be bit into our systems. There's a lot going on in California I've listed here just a couple that there was a joint workshop at the CPUC with the Kyso November 2020 that really started to think about capacity valuation for behind the meter hybrid in other words with solar plus storage resources. The Kyso issued a white paper just last month on energy storage enhancements that there's just a lot of thinking going on of we know we are not having behind the meter storage participate in our wholesale markets anywhere near the level that we think it can happen. And so how can we change the market rules what are the technical requirements that need to be what are our methodologies and then if you have behind the meter storage participating in a retail program. Say through net energy metering or through a demand response. How do you avoid double counting that resource but how do you also if it can participate in the wholesale market, make sure that the benefits is providing our value and these are rules still under development not just here in California but I talked to a number of folks and sort of every place with wholesale markets are grappling with this next slide. So I just am ending my last substantive slide on pending legislation though I just this morning found out that my second these are three laws that have been proposed in California but the second one is now in what's called our suspense file which probably which means it won't get passed this year. It was going to require local governments to have automated permitting for solar PV and then systems that are both PV and energy storage there was opposition. There's another one the first one is requiring the PUC to set a capacity value for behind the meter resources so that there can be participation in our resource adequacy markets. That's quite controversial the CPC is also looking at the issue and it is possible that in a session yesterday or last night it also has is being deferred to allow the CPC to act I'm just not sure and then the final one is very, very very controversial here in California we have a very extensive net energy media ring program for customers of the investor owned utilities that basically it's at your paid for any excess. Generation from the systems on your building solar or solar plus storage at the retail rate. The utilities and others are proposing that it go back or go to more of an avoided cost approach and I'm certainly not hope, even in the Q&A going to get into this. And that also is being discussed at the California PUC so these law these bills are in flux because sometimes if it's also being addressed at the agency level. The legislature says no we're not going to get into it other times they say no we want to. And then at the federal level there are now proposals to extend the investment tax credit for the various clean energy systems, which right now can be a solar PV plus behind the meter storage, but there's also proposal just to set up a separate ITC for standalone storage. So it's going to be interesting to see how these go. This is my last slide. Next slide last slide. So I'm just going back to what I said at the beginning I policy supports can absolutely support behind the meter storage and storage in general. But it's complex and you really need to think it through you need to think about how you're balancing the different benefits and interest. The market rules, especially that area between the retail and wholesale wholesale side are still being developed, and federal support is quite critical as well as what's going on at the state. So that's it. I want to thank you very much. Diane thank you so much for the terrific overview of the policy side. If I could start with one of my own questions first. I'm glad you talked about met metering. And let me just tell you, I have been very confused on the evolving tariff structure for with my utility PG&E. And I can tell you that that the changes have sort of up and downs on my incentives for storage. And I have a big solar system. I want to get your thoughts on how does a consumer like me cope with this evolving tariff structure and how do I know their grandfather and classes and so forth. But I thought since you brought up the very important topic of ne metering. Can you say a bit more, what should be done there in terms of getting the right incentives to the consumers. Oh, I'm going to take a duck on that one. I'm no longer a commissioner. And I don't want my social media accounts I do very little social media or email be flooded with what trying to say what's the right approach. What I will say is, you have hit upon as a former regulator, and even for legislators what's what's one of the most difficult questions it's one thing if you say okay going forward. These are the rules for anybody who is considering purchasing a solar or solar plus storage system. It is another thing then to say how long can that consumer expect these rules to be in place because after all, these systems are 10 may, you know, 20 years lifetime. And a regulator's responsibility is that they have to interact with how things change. And what we don't know is what the rate costs will actually be how and so that is one of the tensions going on. Now, which is that net energy metering because it is, at least in California based principally on your retail cost of electricity in other words you compensated the concern from those advocating the change has been well, the utility rates are rising. Quickly, we have high utility rates in California. The cost of the solar system has not been rising that level and so if you, you know will are getting the benefit of a net energy metering program. It's really because of factors unrelated to solar or storage that's giving you this benefit. But at the same time, if your investment was based upon hey, this is the amount of money I think I'm going to get. That makes it difficult in looking talking with the energy commission this week about the new building code. They are not assuming that the current structure on net energy metering will continue going forward so they're taking a conservative approach and they said it still pencils out for being cost effective to be consumer. So, not answering it directly, but it is very, very difficult. Yeah, I want to ask a question. Hi, Diane. Really, really, really nice talk. No more net energy meter. No more net energy meter. Well, this is fascinating. So really compile all the thinking together in one place. So I probably later will ask for your slide. I have a question. The code implemented since last year on these single family low rise multi family. Very interesting. I want to a pro a little bit on the electric car charger right that's very interesting even though it's not within the code yet dimension. So thinking about that with the man and response for that application, of course, more than a decade ago we say V2G data has been discussed. This becomes really interesting sounds like. This is enough incentive for electric car owners to participate and having the benefit. This could be a really good use of this distributed energy sources already, you know, I have a Tesla right here. I know charging and discharge in my battery for too many cycles were damaged the car, but shallow cycle is fine. If you don't do full charge, you don't do full discharge. If I just away, I could participate with the grid and we see now incentive. I will do right just I have a character in my house so I want to see your comment on this. Now, let me get back to there being different policy tools. So for the building code that is really when it thinks about eb charging, could it mandate, or provide this performance incentive approach for when the building is built, a charger is put in, and then it becomes sort of what our system is going to be and it just remember, you reminded me that I forgot to mention that I talked about reach codes that there is now at least one city in California Santa Rosa that for its new single family homes. It does require installation of storage. This is a trend I think we may be seeing that you're actually going to have to put in storage, or there's another city that storage ready, but he, there's still our incentive programs for eb chargers, it's just not in the mandate for a new building and that I know when we bought our test so we got a $500 rebate from PG&E for actually the car, not even the charger, as well as federal and state credits the, but there are also easy rates for when you are charging your electric vehicle and I'm pretty sure I don't know what service area you're in, if it's PG&E. After midnight, usually I do that after midnight. No, who's your local energy provider? I don't know if you're in the city of Palo Alto or PG&E or you may belong to a community choice aggregator, but I'll offline help you find out if you can benefit from an EV charging incentive through a rate which we actually have not gone there yet. My husband keeps saying, I am why don't you know let's look at it so you'll then set me to do it and then we'll have pre-court sort of announce how everyone can do it around the stage. But this is where, more seriously now, we do want our charging of our vehicle since we have such a vision in California for electrifying our transportation, we want them to be friendly to the grid. And this is where it's going to be the same thing as behind the meter storage systems or batteries with the charger, which is what is going to be the way that the rate system, your electric bill is set up that you the consumer can benefit from it. And will that be aligned with when the grid wants that electricity or doesn't want you to take it and that's going to be the same, same tension. But let's put this on our homework list where to find out. And Diane looks like we need to hire you as our personal energy advisors. I can tell you that personally I have adjusted my lifestyle around the EV to a terror from PG&E. Quite liberating off my pool pumps are now running between 12 and 3pm. It's really very interesting to do that. We have a lot more questions but I think let's go to Grace first and then come back and have a panel discussion. So, Grace, if I can have you come to the stage perfect so we'll hear from Grace with the Hawaiian perspective and then we'll bring everybody to have a spirited discussion for about 15 or 20 minutes at the end. Grace, all yours. Well, good morning everyone my name is Grace and I'm a senior utility analyst at the Hawaii public utilities commission, which as Diane mentioned is a governmental agency that oversees the investor owned utilities in the state. I'm very excited to be here today. Thanks for having me and especially to follow Alexi and Diane's presentations, which really set the stage super nicely. I'm going to speak to how Hawaii is deploying storage in buildings as resource as a resource to meet the state's environmental goals and I know that our audience may be full of engineers so I'll just tell you right up front I'm very much not an engineer. But I'm hopeful that I can make the policy side of things as exciting for you as it is for me. So, I'm going to cover the why of storage by providing some context on the landscape in Hawaii. And then I'm going to focus on the how and in particular I'm going to talk about how we can get utilities and customers to adopt storage and make their buildings more efficient in a way that works for the grid and for the climate. So before we get into it I wanted to first frame our discussion with some key questions that we're grappling with as we deploy storage and buildings. From my perspective, perhaps most importantly, storage needs to be financially attractive. It really needs to make sense for customers who often have to make a big upfront investment. And also for utilities it needs to be as, if not more cost effective than other resources that can provide the same grid services. So in practice that means providing incentives to customers that are high enough to make it pencil out for them, but that keep costs low enough for the utility to be able to invest in those resources and provide savings back to customers. A lot of factors go into this, and this has been talked about a little bit already this morning but is the price that customers are paying for their electricity, higher than what they're being paid for selling their electricity back to the grid. Where are they getting a high incentive there. What happens when more and more batteries come online and the values decline for these resources as it's still pencil out. Like William noted, we can't just keep changing the rules and the prices on customers who invested in a system and are expecting a certain return on their investment. And then ideally, you know batteries will help to reduce the system peak demand. So when that happens, how can we get customers to adapt to now discharge their battery at a different time can we keep changing these rules and keep changing the terrace on them. And it's really challenging to design and deliver programs that are both stable, but flexible. And then another big challenge is really ensuring equitable adoption of storage and deployment of efficiency in buildings. If you're not making your programs accessible for all customers. You're both missing out on system value. You know you could be deploying storage in different geographic locations, and you know getting higher penetration of storage. And you're also, you're also widening the gap of how much low versus high income families pay for electricity every month. But that storage can help address climate change and to increase the efficacy of solar systems that meeting system needs. So how can we drive fast adoption. We recognize that climate change is a crisis and we really need to address it quickly. So how can we get folks to uptake solar quickly. What marketing incentives and education are necessary to do so. Finally, storage really should be serving the most efficient loads possible Dan talked a lot about this. First, because that means we're not over sizing and overspending on those resources. So how can we deliver both services to customers at once. Okay, so why storage in Hawaii specifically. First and foremost, Hawaii is committed to tackling climate change. Diane would call these these policies sticks. And the state has set a carbon neutrality goal by 2045. And just a few weeks ago, the state actually became the first state to declare climate change and emergency. So in my role at the utility regulatory agency, the state's policy objectives most directly impact the utilities we regulate via the energy efficiency standards, and the renewable portfolio standard of the rps which mandates 100% clean energy by 2045. Also very relevant is that Hawaii has the highest residential energy costs in the country. So customers here paying more than 30 cents a kilowatt hour which is just it's staggeringly high. And this has a really huge impact on families here, especially low income customers. And this has been especially pronounced during the coven 19 pandemic in which many folks are struggling economically. Here all of these policies and statewide conditions have led to a really unique situation in Hawaii in which we already have a very high penetration of rooftop solar. The chart on the bottom of this slide shows that customer solar is currently the biggest contributor to the rps, and that it's been growing steadily over many years. Importantly, of the almost one third of single family homes in the state that have solar, almost 80% of them also have battery storage so that's a huge fleet of resources at our disposal. But it's not without its challenges really to optimize that for the grid, given that these systems create a landscape of owner over generation in the middle of the day. And an expensive peak demand to meet in the evening, often with fossil fuels so that's sort of that duck curve that Diane mentioned. Also, many of the solar systems, you know came online quite a few years ago, and they're aging and may not be readily controllable by the utility or, you know they can cause reliability issues. When there are many systems on a single circuit so programs really need to be designed to help address these challenges. We also has a unique regulatory landscape in which we only have one utility per island. All of them are vertically integrated utilities, meaning that they typically own their own generation systems, or purchase it directly from a third party, rather than from a wholesale market. All of the investor owned utilities here are owned by a parent company Hawaiian Electric and we call them he go. And then we also have a separate administrator to deliver energy efficiency program so our utilities are actually not the ones delivering efficiency programs. And Hawaii energy is our administrator here. They do a fantastic job delivering efficiency programs. And then at that level of separation between the utility and the administrator, you know, it creates an additional silo and an additional level of coordination that's needed to really make sure that programs are well coordinated for customers for simplicity and ease of understanding, and also for the grid. And then, just back in December, the public utilities commission finalized a performance based regulation framework PBR. And so this this framework completely severs the tie between electricity sales and the utilities revenue. So now the revenue is actually predetermined based on a formula formula that's indexed to inflation and productivity and a couple of other factors. But the utility also has the opportunity to earn additional revenue for meeting specified policy goals. And I'm going to get into a little bit more detail on that in just a bit but generally speaking there are opportunities to earn rewards specifically for bringing distributed energy resources DRs online. And that includes storage so that's a really big why of storage for Hawaiian Electric is that their profits are intact in part actually tied to deploying storage and other resources. The final why that I'm going to talk about is, is that Hawaii's grid system actually really needs storage. So first, Hawaii's islands are uniquely vulnerable to climate change and natural disasters and Alexi showed that slide of the hurricane on Puerto Rico and you know Hawaii is equally as vulnerable. There's not a lot of backup options we can't just easily connect to another state's grid and it can take days to import fuel, if needed. And so this makes resilience really important for both individual customers and for the utility and these pictures at the bottom, because Hawaii is just so unique and I think it's helpful to actually visualize that. So in addition to solar EV adoption here is really high and growing and in my mind this just makes electric resilience even more important, because cars and transportation really are a lifeline for customers so in a in a disaster situation, you know you need to be able to charge your car. And these other pictures also show the beautiful mountain ranges on a wahoo we have the koalao mountains. And it's just fascinating to me they're a giant translation transmission lines that go right over the top of these really high mountains and that makes it not easy to restore power in what in poor weather conditions so you really have to prepare upfront for the resilient conditions needed to serve Hawaii's unique grid system. So a second storage and in particular customer cited storage is really only increasing in any importance as we move towards that 100% renewable goal. As I mentioned before, storage can help to smooth out the valleys and the peaks created by that variable renewable energy. There's also really limited space land space on our islands which means that we have basically no choice but to really maximize the use of customer cited resources in order to meet that 100% goal and to meet our climate goals. And then, finally on this side of, I've noted that Hawaiian Electric has committed to retiring its largest generating unit by September 2022 so just next year. The next coal plant is Hawaii's largest generating unit it makes up about 15% of the capacity on a wahoo the most populated island. And we've run into challenges with the utility scale solar projects that were intended to meet that capacity need when the coal plant goes offline. And so in order to meet that that capacity need the commission is really prioritizing deploying storage in buildings to help meet the capacity need. And this means that we have to get a lot of customers to adopt a lot of storage really quickly so I'm going to talk a little bit more about how we've started to design those programs to meet that need. So we'll be doing this as Diane mentioned, there are both carrots and sticks and to get what we've had today where we are today, Hawaii has had a long history of programs that incentivize customers to adopt solar and storage but mostly solar. And these are the programs that we would say provide the carrots for customers who install solar. So similar to California Hawaii has had net energy metering in place for a long time. And Hiko has offered actually a number of other solar programs over the years. And in particular their smart export program also encourage customers to install storage paired with their solar systems. The program pays customers for electricity discharged to the grid during the system peak and encourages charging during the day by not providing any credits for energy delivered during that time. Hawaii Energy again this is our efficiency administrator obviously has a very long history of offering robust efficiency programs and incentives. Some of those are noted here but they have a wide breadth of programs that they offer. And recently they've been pursuing programs in addition to efficiency that helped to optimize demand based on system needs and just last year they they began to pilot an energy storage program. And I will say it's pretty unfortunate just the timing of this program that it didn't really take off as expected due to COVID and Hawaii Energy had to pivot a lot of their programming because of the emergency. But I think I'm really excited to see where this goes because the program was really innovative and really was aimed at meeting a lot of those key questions I highlighted up front. The program offered an upfront incentive for storage up to $2500 and it was targeted towards customers that already had solar installed and what I think is particularly great about this program's design is that it was designed to reach underserved markets that are really harder to reach like townhomes or condominiums which can be difficult for permitting and also often have lower income customers than single family residential homes so the the the the program also targeted circuits that were over constrained on the grid or and those that were particularly important for resilience like critical loads. For example wastewater facilities or hospitals. And then in addition because Hawaii Energy already offers efficiency programs they are very well poised to first optimize the load and then to deploy storage and one of the ways that they're considering doing this is by integrating this storage program with a whole home energy audit program up front. So as I mentioned I'm really excited to see this program get relaunched because it really aims to address a lot of those key questions that I outlined up front. So within the performance based regulation framework we established opportunities for the utility to earn additional revenue for exceptional performance in critical areas. And performance incentive mechanisms or we call them PIMS are essentially carrots then for the utility to adopt storage and other DRS and to use them effectively. So all of these film PIMS do help to promote storage in some way but some more directly than others. So the first pin that we adopted in this framework is one to incentivize an acceleration of the renewable portfolio standard. Basically if the companies if the utilities can bring renewable energy online quickly they can earn rewards and both storage and efficiency can help with this by optimizing load and making those renewable energy targets easier to hit. The second PIM encourages the companies to acquire grid services from customer cited resources like demand response solar and storage and this is intended to help maximize the value of the resources that are already on our system and that are rapidly coming online. Another really interesting component of this PIM for me is that it helps the companies the utility to gain experience with using those resources for additional grid services and really deploying them in their system operations. The interconnection approval PIM encourages faster interconnection of DRS. So if the companies really fully met this PIM at the end of the five years their performance would be amongst the best nationally and we're kind of chasing California on this front. And this is really important to me because it really helps to improve the customer experience of installing solar and storage by making sure that those customers don't have to wait for months to get their systems turned on. And you know customer experience is important and word of mouth is really important for getting customers to want to deploy DRS. The next PIM is intended to incent collaboration between HIKO and Hawaii Energy to deliver energy savings for low income customers and this one is interesting to me. The commission recognized that many of these PIMs place a necessary emphasis on DRS but that these are not accessible to everyone. So this PIM aims to help facilitate a more equitable participation in the energy transition. And then finally a PIM for usage of the company's advanced metering infrastructure and this PIM is intended to help the companies prepare to maximize the benefits of their planned AMI investments. And you know AMI can really help customers to maximize the value of their storage systems and their buildings and it really helps to ensure that buildings can actually be a resource and work in concert with the grid needs. So I just wanted to note that the grid services PIM in particular really aims to help HIKO integrate storage and customer systems into the everyday operation of the grid and this is absolutely critical going forward. So right now we're actually in the process of developing new programs to incentivize storage adoption for two main reasons. First we're realizing that some of the very high incentives that we offered years ago like through the net energy meeting metering program are no longer appropriately balancing sort of that customer and utility value piece. And yes those high incentives were necessary years ago when solar and storage were new more expensive and less attractive to customers. But now costs have come down and you know customers recognize the value of these systems so we're sort of trying to reevaluate how to set those incentives. And then second as I mentioned earlier we have a really urgent system need to meet. The chart on this slide shows new utility scale projects coming online in the next two years and the red line shows the expected capacity need. So there are two yellow boxes on this chart that show time periods where the capacity needs are expected to be higher than available capacity or where the reserves are at least very tight. And so these are in the fall months when Hawaii typically experiences its high demand. So Kiko does have a plan for addressing these system needs and we recently approved a large utility scale battery system to really help address this capacity need. But in addition we really want to make sure that we have extra capacity available to make sure the lights stay on and therefore we are aiming to rapidly increase adoption of customer cited solar and storage systems. So for that reason we've asked stakeholders to help us design these programs, both for this immediate need and then also to be more sustainable and stable in the long term. The programs aim to allow customers to enroll with any device that can provide capacity resources. So that's why we call it a bring your own device program. It could be storage, it could be solar demand response, potentially in the future electric vehicles, those kind of devices but but we are really expecting that the program will probably largely help customers that already have solar systems to add a battery and to schedule it to dispatch during that evening peak when we need those resources. Technically the program is aiming to enroll up to 50 megawatts of capacity so that's quite a big program to be standing up in just over a year. And we've already received program proposals from the stakeholders to this docket and their proposals are all similarly focused on scheduled dispatch from batteries in the evening, but they really vary in terms of the level of incentive being provided to customers so given the very real and urgent system need for this program, we think that the value is probably quite high for these programs. For example, if we didn't have them, you know, we'd have to deploy very expensive resources to to meet that need so again it's sort of that balance of getting customer update without overpaying. And so we are expecting to have a decision on this order quite quickly so keep an eye out for that in the near term, and we'll be looking to stand that program up quite quickly. So I just wanted to return finally to our key questions for storage deployment deployment and I hope that these real world examples have illustrated why these questions are so poignant and are very top of my mind. It's really critical to making storage work in the real world and they're very much focused on how to deploy storage so what is the right incentive level to provide that will one create access to storage for everyone. Achieve storage at scale, and ensure that storage is optimized across the system, and especially with regards to buildings themselves to make those to make buildings themselves a flexible resource for the system. And so I think it was probably evident but these are very much still items that we're exploring so I hope in the coming months and years that will have some additional lessons to share and we're always looking to learn from others experiences to so let me know if you have any advice for us and with that I will turn it back over to the panel I would welcome you all to reach out afterwards and looking forward to questions. Grace, thank you so much with apologies we're running a little bit late so I thought we would just go ahead and have everybody come together now. There's so much questions coming in from our audience, and maybe we can take a few moments before we finish up at nine. So Alexi if I can have you also rejoin as well. Maybe let me just ask a segue question, connecting Grace's talk to their earlier talks by Alexi and Diane. You know we've heard so much about how California and now Hawaii is really, you know ahead of the pack. So, what have we learned from the past 10 years in terms of behind the meter energy storage implemented in these two states. And how have that been different than what you had expected, and how will this shape the policy going forward for the rest of the country in the world. I'll start in my mind and this is not, you know, sanctioned by the regulators who have, or the legislature said, I think what it shows is the power of the mandates and the incentives that if you ask somebody 10 years would we really have a lot of stories be available, whether it's behind the meter or in front of the meter and I think people would have been skeptical that we could really do it and I think what one thing that is is true the technology. It's there. I mean, certainly we're improving it everybody wants to get for in front of the meter larger than you know the four hours that sort of thing. But I would say that we weren't sure when our first mandates are first targets were adopted, could this happen. And so I think it goes to show. Wow, storage is a real resource. I think that the other lesson and grace you said what you know. Well you had brought up what I discussed is that it's, it's hard though to think about what's going to be the balance between a long term program that provides incentives, and the level of those incentives, when you're still understanding the market market situation, as well as the cost side of it. And so I would say that's definitely still a work in progress. The third area. I'll mention is that when for first put out its order saying hey, storage needs to be part of wholesale markets. I'm not sure anybody anticipated just how hard that is, and that we just don't have the level of participation that frankly we had hoped for that we will will need so that's a work in progress. Grace. Yeah, I mean I totally agree with everything you've added you said Diane and I guess just to add one additional perspective is that I think we really have to prioritize the customer experience and making sure that it's easy for them to enroll to adopt to finance systems, and then to deploy those systems in a way that gives them a return on their investment in in a way that's simple so making it easy for them to schedule their dispatch during the evening peak when those prices are high. You know allowing them to charge during the middle of the day I just for me I think word of mouth is really important and getting folks to adopt solar and storage and I think just making it really easy and intuitive for customers is a really important part as well. And I agree with what you've both said definitely I'll add something that I think is an important lesson learned. Sort of echoing one of the very first things I said what is the point of doing this in the first place cost carbon resiliency those kinds of benefits and actually Diane you had a few more in there as well, the system support grid system support. And then lesson learned, for example, the first generation of the s chip program the soft generation incentive program when well not the very first but the first version with battery storage. There's some research into that and it turns out it actually increased greenhouse gas emissions was a misalignment between peak time of use rates or demand charge reduction and greenhouse gas reductions and so the signal if you're operating a battery just based on cost, that's a reasonable way to do it right that's straightforward enough that's how most battery dispatch software is set up etc. Well it doesn't necessarily get you the greenhouse gas savings and so those rate signals and emission signals and we're not aligned and that that's been adjusted in the current version of the s chip. The exact issue is sort of has been considered and pretty well addressed but the fundamental issue remains in a lot of places and it's still you've still got this challenge of misalignment between rates and greenhouse gas. There are a lot of ways to crack that nut, but it just points out to me that that we've learned that if you have multiple goals, carbon cost resiliency that kind of stuff. You're not necessarily going to get all of them through the optimization of just one so it argues for considered policy approach and and you know equipment technical deployment strategy to actually make sure you are achieving all the goals you think you are. Well, can I ask a question here. Well, I'd like to thank three of you. Very good discussion here. Coming more from the storage side right so, you know, please mention I completely agree, make it really simple for the customer to understand the benefit of doing so if you do PV plus storage. Um, I have a solar roof I have a Tesla but I don't have a behind the meter storage yet. I myself still need to figure out where the financial it makes sense to do it if I still need to figure that out I bet this most family, the house owner still need to figure that out so not so easy. I think the regulation is changing right so you don't know, you know, what does he mean you want to install this I wanted to last for 30 years. Probably, my empathy will not do it. Not from the storage standpoint from, you know, character from California from Hawaii. What's the feedback so far from customer saying what's needed from storage standpoint if that feedback we can fit into people like we're in me working on technology, that would be great. I'm going to do a little bit of a pushback, just going off of what Alexi said, which is, it gets back to from the consumer's viewpoint what is their goal. You know, is it cost savings on your electric bill. Is it being a good climate citizen, where, you know, you're saying, with the storage with adequate with proper controls, I can minimize the electric, the non solo electric usage of my house because we are not yet at a zero grid. Or I can be a good grid citizen, essentially by helping reduce those times of peak when we don't have adequate renewables and so it is, if one thing comes across I think it is very hard for policymakers to design the policies that optimize across all those goals and Alexi I just couldn't say it better than you did, you know, carbon and costs do not align all the time. And so how policymakers align those goals is one thing because then it turns up in the incentive you may get, but it's also, I think always an individual choice, but part of it is, you know, can you even get the knowledge of if you put in storage in your system. What would it mean for carbon reduction, and that's the education I think that we need to be spending more time on so that there's an understanding of not just the cost benefits but the carbon as well. Yeah, I think that I completely agree. So they will be a percentage of people will be able to adopt this for the CO2 consideration. And to the really the whole public to adopt it the got to be a financial reason behind it. And so, and also I have I have my additional concern maybe I will and I know too much about the benefits. I actually don't want to leave you I am inside my house, because you can burn down the house and what this accent keeps coming the resist too high. I actually wanted outside of my house is that inside of my house. All these questions I have on the storage system. Well, actually motivate me to write better technology safer. I want to make sure it does not burn down my house all these questions really come up the more I know that actually the more concerned I have. We're in exactly the same boat. And Alice if I can also chime in and maybe we can finish on this point is, I think it was Alex who brought this point up initially, which is exactly what is the role of behind the meter energy storage in catalyzing the taking off of the industry as a whole We certainly saw that solar this was key, getting all the solars on residential rooftop drove the solar cost down which enabled mass adoption right now we don't really have to talk about the economics of solar it really makes sense already today. Thanks to this positive loop. Energy storage part is a little bit unclear and vague to me maybe we can finish on this now. What is your thought on the importance of behind the meter storage to get this going and get a catalytic and self sustained on more massive deployment of energy storage in general. Maybe grace. Great question. I think, for me the first thing that comes to mind is that Hawaii has very limited space. And I mentioned this in my talk but you know we just do not have the land mass to be able to deploy massive wind farms or you know, utility scale solar systems to to really meet that 100% renewable portfolio standard goal. And to me that really speaks to the need to get solar and storage to every customer on these islands, and really maximize the use of our roof space and to to optimize that with the grid and to me that's that's a huge role for behind the meter storage. I mentioned to we have a giant battery coming online here a utility scale battery. So I think there are lessons learned from both and they definitely operate in different ways for the utility system but there are lessons to be learned from the availability of behind the meter storage systems that are already online and operating as a utility resource that can be deployed for you know, larger scale systems as well so I think there's a lot of lessons that are going to be learned from behind the meter that are applicable in the larger scale as well. And this is a sort of, you've made me think I have an ask for anyone on the call who is in a position to do this, we did a great optimal, the pilot deployment in Northern California, put in a behind the meter battery it was at the headquarters of our community choice aggregator Sonoma. And the battery system did not have a way to optimize based on both carbon and cost you just couldn't get the carbon signal in so please if you're designing these systems. At least leave the door open to the customer to be able to get that carbon benefit if that's what they're trying to do by being able to take in a carbon signal that could be from what time that could be from one of the California the Midas system is considering that there are different places you could do that but it would be great to make sure that the technology is capable of dispatching on both cost and carbon. So we don't have to kind of hack that and come up with a way to to create some kind of synthetic cost dispatch approach and then if the technology can do it. We can make sure we have the right policy levers in place to take advantage of that so those that are on the call if you are in a position to make your battery system able to take in cost and carbon, that'd be great. Well Diane any final thoughts from you as we close today symposium. Just that I even though I've been in this area a long time I certainly learned a lot as well and so I'll send it back to you you know with all the great work at Stanford and story jet symposium. I think it'd be terrific if you sort of had one stream of it, exploring these types of issues that are going into the policy side I call it the real world side but policy makers are allocating billions of dollars now towards storage towards behind the meter storage and, you know, getting a better understanding of integrating the technology development with the policy setting is one of the critical areas we have that Alexi I till you just said it I hadn't even thought about that I mean, my goodness what a benefit that would be to have battery storage systems that can give both those signals and since, you know, I'm part of Stanford what better place than Stanford but I hope in the great work that storage X is doing that you think about how can you help the policy making side and then what Grace did so well of talking about was the consumer side. You know how do we have the messages that are easy that are understandable, and that really get consumers and all levels, saying yeah, I understand what the benefit is, and I will be moving forward. Thank you for the great feedback Dan always appreciate it. Let me just end on the note by saying I think this is a very specific topic which really connects the policy aspect that technology aspect and even the human behavior aspect. I think that's just a very rich topic for further exploration. Thank you, Diane Alexi and grace for joining us and especially grace I think now it's finally 7am and this is coming up. Thank you for we really deeply appreciate it. So, I like to remind everyone we have two more excellent symposia schedule for the spring quarter here. So now we'll have Frank blown talk about VW's battery strategy. And then on June 18, we will have two of our academic colleagues talk about the latest development and battery cathodes for lithium ion batteries. So just a quick advertisement. So she has Stanford have an online education program, and Diane is one of our distinguished instructors, and she teaches an online course on building energy efficiency. So for those interest that you can go to online.stanford.edu to look at some of these courses where Diane and her co instructor see Camelo talk about the many aspects of building energy and efficiency. I invite you to join us on LinkedIn where you can hear more about our exciting progress here at Stanford. And with that, thank you everyone for tuning in today and we're looking forward to seeing you for our next symposium and let me thank everyone once more.