29 Apr Distributing the Next Generation of Clean Energy: Why DG Matters
John Conley, CEO
As we speed down the tracks of the most critical decade for accelerating renewable energy, there’s now compelling, peer-reviewed research that quantifies the value of distributed generation (DG) projects – including commercial and community solar and storage – on the US grid.
We’ve always known intuitively that these projects can fill in all pockets of available grid capacity while deploying locally sourced clean energy directly to the communities and businesses where the energy is used. But this new research tells a more tangible story: that deploying at least 247 GW of distributed solar would be the most cost-effective way to transition to a clean energy system by 2050.
An Ode to DG
This year marks the start of my 19th year in the solar distributed generation (DG) industry where I’ve had the honor of working on a significant volume of project and capital deployment. When I joined the industry, module prices were north of $3.50/watt, a 15% discount on retail energy seemed like a great deal, and each incremental project seemed to set a record for the largest or first of its kind. It was exhilarating to push policymakers, load-serving utilities, and commercial enterprises forward to the edge of the energy transition.
Back then, our work seemed more art than science, driven by sheer instinct and a blunt-object kind of thinking that the deployment of solar generation located nearest to an energy consumer simply made sense. We intuitively knew that something distributed must inherently be superior to something centralized, even if it costs a little more. And now, nearly 20 years into this journey and with more than 100 GWs of distributed energy resource (DER) capacity installed nationwide over the past 5 years, there’s data to back this up.
Groundbreaking 2.1 MW solar project, developed and built by Dynamic Energy, is Connecticut’s first community solar project.
The Data on Distributed Generation
One compelling model comes from the work of Dr. Christopher Clack and his colleagues at Vibrant Clean Energy, acquired by Pattern Energy. They used a rich composite of granular, localized data to demonstrate, evaluate, and quantify the potential value that DERs can provide to the U.S. electricity system. Their 2020 study, “Why Local Solar For All Costs Less: A New Roadmap for the Lowest Cost Grid,” has been peer-reviewed by leading scientists, economists, and public utility commissioners. Based on blunt-force instincts, it is not.
Their modeling software is a combined capacity expansion and production cost model that factors myriad permutations: simultaneous 3-kilometer, 5-minute dispatch and power flow simulations, multi-decade representations of fossil and variable resource generation, storage dispatch algorithms, policy mandates, weather inputs and climate-changed induced impacts to grid infrastructure.
The Impact of Locally Generated Energy
Traditional utility-planning models were built from a central grid planning perspective, only considering resources above the 69kV bus, even though the distribution grid is where most energy customers connect with the electricity system. But Dr. Clack’s model reveals that true net value of transmission and distribution cannot be adequately considered by omitting the impact of DERs.
In doing so, Clack’s model demonstrates that DG can do very valuable things: reduce demand volatility, reduce peak and overall demand requirements, and reduce utility-scale ramping requirements. All of this can significantly impact how much capital ratepayers need to front – and where they need to front it – to cover the cost of peakers, baseload, firming capacity, and even utility-scale storage.
Two other compelling points from his research:
– DG is the most cost-effective way to reach 95% emission reductions from 1990 levels.
– Leveraging more local solar and storage can save the U.S. $473 billion by 2050, not including the societal benefits that come with 1 million net new jobs.
Distributed Energy Can Generate Change
Over the years, many of my early DG peers have taken their talents to other important clean energy segments like utility-scale development, product manufacturing, and asset management. I’ve remained strapped onto the DG train which, on any given day, can feel both unstoppably bound for glory and fully engulfed in flames, flying off the tracks.
Dr. Clack’s study sings loud affirmations that my 18+ years have been spent in the right place for me. It also compellingly validates Dynamic Energy’s core focus on distributed energy projects. The financial, ecological, societal, and community impact of DG is something our entire organization holds dear. Our mission: to distribute energy & generate change.
But don’t just take it from me. Read what the luminaries have said about DG:
“Traditional planning models that analyze the grid in piecemeal fashion have resulted in overbuilding the grid with underutilized utility assets that are unnecessarily costing our country hundreds of billions of dollars. This study proves that empowering consumers with cost-effective technology requiring utility permission can save the country hundreds of billions on top of enormous societal benefits.”
– Jigar Shah, Co-Founder and President of Generate Capital, quoted in localsolarforall.org.
“DG is near and dear to my heart. The first major technical paper I authored in solar was in 1990, called ‘Photovoltaics in the Utility Distribution System: The Evaluation of System and Distributed Benefits.’ This paper summarized a deep quantification of many benefits solar provides when distributed in the electric transmission and distribution system, including reduction of electric losses, thermal benefits to power lines and transformers, voltage support, and reliability increases, which afterwards we called in summary ‘solar grid-support.’ ”
– Dan Shugar, solar industry pioneer; Founder and CEO, Nextracker
Investment in Distributed Generation
In 2022, Pattern Energy, one of the world’s largest privately-owned developers and operators of utility scale wind and transmission projects, acquired Dynamic Energy – ushering in the next phase in the company’s commitment to forging a cleaner future.
In case you missed it, Pattern recently closed financing on its $18 billion SunZia Wind and Transmission Project, the largest renewable energy project in U.S. history. This monumental project is the culmination of more than 15 years of development, with hundreds of land lease and rights-of-way agreements signed, thousands of permit crossings and FAA filings recorded, and scores of offtake agreements negotiated.
So why would a company developing projects at such a massive scale want to hop on the distributed generation train?
“Through our direct investments in DG, Pattern has secured a piece of the highest growth segment of the solar market while also improving the value of our core utility-scale assets through the critical grid support provided by distributed generation.”
– Hunter Armistead – Pattern Energy CEO.
At Dynamic, we’re working side-by-side our utility scale counterparts, helping to accelerate the transition to clean energy and deploy the massive scale and scope of clean energy needed to reach the nation’s decarbonization goals.
Welcome aboard the DG train, Pattern. Buckle up!
