The clock has started ticking down on backup generators in California’s demand response programs. On January 1, 2019, the California Public Utilities Commission’s Demand Response Prohibited Resources decision officially takes effect. The decision (officially Decision 16-09-056) mandates that fossil-fueled resources can no longer be used to provide demand response.
The decision doesn’t remove fossil fuel generators from use for backup or for facility power generation, just from demand response (DR). It’s clear, though, that they face near-certain elimination from the California power landscape in the near future. The historic green energy bill signed by Gov. Jerry Brown on September 10th, 2018, specifically requires that 50 percent of California’s electricity be powered by renewable resources by 2026—seven short years away.
Needless to say, this has some profound implications for the future of distributed energy resources (DERs) and DR in the nation’s most populous state (and the world’s fifth largest economy). California’s “bold path” toward 100 percent zero-carbon electricity by 2045 will take it through uncharted territory potentially full of threats to the reliability of its far-flung electrical grid and the costs of the electricity it provides.
Demand response in California, as elsewhere in the country, has been a valuable tool in managing demand-side energy use, protecting the grid, and funding progressive sustainability initiatives. Generators have been a valuable part of DR, providing additional opportunities to save and earn as part of their commitment to a balanced California grid. But California has long been strict on the use of non-emergency generation for demand response, and the green energy bill tightens restrictions to an outright ban.
With fossil-fuel generators permanently pulled from DR participation in California, then, the question facing participants is, “Now what?” There are no easy answers—in a constantly evolving energy universe like California’s, there never are. That said, CPower recommends a couple of steps you can take to ease your transition into a post-fossil fuel world and continue to save and earn.
No Generators? No Problem.
The 2015 court ruling that vacated the EPA’s rule—referred to in the industry as “the Vacatur”—took effect in 2016 and upended DR participation. Hundreds of fossil-fuel backup generators were withdrawn from DR programs in most of the nation’s wholesale energy markets
One water agency, though, found they could still successfully participate in DR without their generators. Virginia’s Lake Gaston Water Supply Pipeline supplies water to Virginia Beach, the state’s most populous city. The Vacatur forced them to withdraw their diesel-powered generators from their DR program. Without the generator to sustain pumping during curtailment as part of DR, they faced the prospect of not being able to curtail the required power during an event, which meant pulling out of DR completely.
Working with CPower, Lake Gaston’s curtailment service provider since 2010, managers were able to research new methods of DR participation without generators. These measures included a full pump shutdown, something they weren’t sure they could do successfully. After a thorough analysis and review of their operations with CPower, it turned out that they could. Read the full story here.
Back to Basics
Before you mourn kilowatts lost, take a moment and consider if there are kilowatts to be found to replace them. Start by asking yourself, “What’s changed since I received my first demand response check?” The answer might be, “Everything,” or something close to it.
How have your day-to-day operations changed in response to changing market conditions? What upgrades have you made to your lighting, HVAC, IT, security, and communications? Is your physical space smaller or bigger? Have you added locations? What’s the state of your building envelope? Is it sufficiently insulated? Has on-site staffing grown or declined?
These are questions to be answered when you have a knowledgeable energy engineer, like those at CPower, conduct a thorough assessment of your facility. Your new “deep dive” assessment forms the foundation for creating a new curtailment action plan, one that matches your available kilowatts to available demand response and demand-side energy management programs. Chances are you’ll find new kilowatts to replace those lost from removed generators, and possibly more.
Dollars for DERs
Now is the perfect time to think beyond the generator and embrace other dispatchable distributed energy resources, or DERs, for your backup power. Behind-the-meter technology like storage batteries—charged by renewable but intermittent resources like sun and wind as well as grid energy—can be enrolled by CPower in California’s demand response programs (Capacity Bidding Program, Base Interruptible Program, and Demand Response Auction Mechanism aka DRAM) as available generation to help when the grid is stressed. You can combine your DER asset with demand response programs to offset kWs lost from generators.
For example: California State University, Dominguez Hills is one of the most sustainability-focused campuses in the state system. In 2017, CSUDH joined with CPower and Stem, provider of the school’s 1 MW intelligent storage system, to create a combined curtailment and storage program. By stacking these technologies, CSUDH significantly reduced their environmental footprint, provided approximately 400 kW of grid relief, and generated revenue that flows back to the school to fund further sustainability initiatives. For their efforts, CSU was also recognized with the 2018 Smart Energy Decisions Innovation Award for Customer Project/Onsite Renewable Energy.
As California moves toward 100% zero-carbon energy, it’s safe to say that fossil-fuel generation, on both the micro and macro level, will continue to be phased out. Demand response, however, will continue to have an important role in California’s energy re-imagining. Demand response continues to fulfill its primary role, protecting the grid of the world’s fifth largest economy. Look for thought leaders and decision makers to find new and better ways to integrate renewables and dispatchable renewable energy resources into statewide demand-side energy management programs. And look for CPower to continue to advocate on behalf of our customers to ensure their ability to save and earn while protecting the grid.
In this paper, CPower’s Meg Kelly will explain how organizations can earn revenue for their qualified energy efficiency (EE) projects by offering their permanently reduced demand into PJM’s forward capacity market.
The paper will detail what types of projects qualify for monetization and the best practices for measuring and verifying EE projects so they can earn maximum revenue through PJM.
A complete guide for earning revenue with demand-side energy management
The data center industry’s recent push toward a more efficient and sustainable future comes at a serendipitous time when energy markets around the country are working to reduce demand via energy efficiency investments and to integrate distributed energy resources (DERs) onto their energy grids in an attempt to diversify their fuel mixes.
Data Centers with distributed resources at their facilities like backup generators are in prime position to reap significant financial benefits by working with a properly licensed company that can help them monetize their existing energy assets.
This paper offers a detailed explanation of how a data center can monetize its existing energy assets with demand-side energy management.
programs and practices that comprise it. In this explanation, we’ll take a close look at the evolving energy industry in the US with an emphasis on the growth of DERs and the role they play and will continue to play in North America’s fuel mix of today and tomorrow.
The following is an excerpt from “Monetizing Energy Assets in the Commercial Real Estate Industry: A Complete Guide for Earning Revenue with demand-side energy management” by CPower:
For the past several years, the economic and policy climate of North America has created an impetus for green and sustainable energy-efficient buildings. The commercial real estate (CRE) industry has contributed to this momentum.
Keeping the supreme goal of providing a great tenant experience at the forefront of their operations, commercial real estate facility managers and executives are increasing their focus on energy management plans rooted in a sustainable building philosophy based on cost-effectiveness and energy-optimization.
The CRE industry’s current push toward a more efficient and sustainable future comes at a serendipitous time when energy markets around the country are working to integrate distributed energy resources (DERs) onto their energy grids in an attempt to diversify their fuel mixes.
Right now and for the foreseeable future, grid operators and electric utilities in each of the nation’s six deregulated energy markets have created a wealth of incentive programs to encourage commercial and industrial organizations to help integrate their grids with distributed energy.
CRE organizations with distributed resources at their facilities like backup generators, solar photovoltaic cells, fuel cells, energy storage and more are therefore in a position to reap significant financial benefits by working with a properly licensed company that can help them monetize their existing energy assets.
The Importance of Tenant Experience
No two commercial buildings are alike and every commercial real estate organization is unique. One trait CRE organization’s share, however, is the unwavering desire to provide a great experience for their tenants.
More and more commercial real estate companies are realizing that sound demand-side energy management–the practice of modifying consumer demand for energy–can play an integral part in providing a great tenant experience.
Without satisfied tenants, of course, the CRE industry wouldn’t exist. That’s why every measure a CRE organization explores concerning energy management should be examined through the tenant-experience lens.
Demand for Green Buildings
Utility costs related to energy, water, and waste have a significant impact on a CRE organization’s profits. For decades, CRE organizations have sought to reduce these impacts by making their buildings more efficient and (if at all possible) environmentally friendly.
Green buildings–those which are environmentally responsible and resource-efficient–are estimated to consume 30-50% less energy than non-green buildings. Green buildings also use an average of 40% less water, emit 30-40% less carbon-dioxide, and produce 70% less solid waste.
Green Buildings, Happy Tenants
In the last several years, CRE organizations across North America have recognized the direct correlation between green buildings and tenant attraction.
The increasing popularity of green leases, which include an up-front establishment of sustainability goals and allocation of implementation responsibilities between the owner and the tenant, is proof that the notion of sustainability is a value shared between CRE organizations and the tenants they serve.
Since the Great Recession, many tenants’ business performance has been and continues to be evaluated by customers and investors looking at aspects beyond the strictly-financial. Tenants want to tell the story of their operating in a green building that actively pursues sustainability efforts with a positive effect on the community and the environment.
CRE organizations who oblige will not only provide a superior tenant experience, they’ll also be in a position to monetize their efforts through demand-side energy management.
Energy Assets in the CRE Industry
CRE Organizations that have made their buildings more energy efficient–whether by lighting upgrades, HVAC improvement, or any other measure, may be eligible to earn money for the permanent reduction of their electric demand.
They may already possess energy assets like back-up generators, energy storage, solar generation, and more that can also earn revenue through demand-side energy management.
When selecting a company to guide your demand-side energy management, it’s important to consider the company’s scope of demand-side expertise. Do they serve the markets where your properties reside? Does the company specialize in one type of demand-side energy management, or is it equally skilled in a wide range of energy asset monetization practices?
Most importantly, a demand-side energy management partner should earn your trust in every aspect of the relationship your organizations share.
Demand-side energy management is not a one-size-fits-all exercise. No two buildings are alike and every CRE organization is unique in its complexities.
Like your business, your demand-side energy management strategy should evolve and refine over time, forever in pursuit of perfection as energy markets continue to change and your needs as an organization evolve.
Visit https://cpowerenergymanagement.com/commercial-reit-lp to learn more about CPower’s extensive experience in the commercial real estate industry, including how Tishman Speyer Commercial Real Estate earned more than $1.4 million through demand-side management with CPower as their guide.
To read the entirety of “Monetizing Energy Assets in the Commercial Real Estate Industry: A Complete Guide for Earning Revenue with demand-side energy management” click HERE.
Stand anywhere between Fifth Avenue and the Avenue of the Americas from 48th to 51st Street in Midtown Manhattan and you’re bound to see hundreds of passersby gazing at the iconic sights of Rockefeller Center. If Gregg Fischer is one of them, however, he probably won’t be goggling at the usual tourist highlights—Radio City Music Hall, Christie’s Auction House, the skating rink, or NBC’s broadcast studios. He’ll be heading into one of the center’s ten Art Deco buildings to speak face-to-face with a tenant.
To Gregg, the tenant’s experience is everything.
As the Director of Energy Systems for Tishman Speyer Real Estate, Gregg is personally responsible for managing sixty commercial complexes nationwide. The 8.8 million square feet that comprise Rockefeller Center is just a piece of the more than fifty-million square feet of class-A commercial office space and luxury residential properties Gregg oversees.
“Have you ever seen a circus performer who simultaneously spins ten plates on his feet and arms and head? That’s what I feel like every day of my life,” Gregg says, describing his daily mindset in balancing his company’s needs with those of his tenants. “I make sure all the plates don’t crash.”
For Gregg, every day is filled with minute-by-minute communication with both his tenants and their operation, procurement, and accounting staffs and the departments within Tishman Speyer, from his own team in design and construction to property management as well as the company’s partners and investors.
“The more we innovate on the demand-side, the more the grid, our community, and our tenants win.”
—Gregg Fischer, P.E., Director of Energy Systems, Tishman Speyer Commercial Real Estate
A leading owner, developer, operator and fund manager of first-class real estate worldwide, Tishman Speyer believes sound demand-side energy management—the practice of modifying consumer demand for energy—is crucial to providing a stellar tenant experience. “The more we innovate on the demand-side,” Gregg says, “the more the grid, our community, and our tenants win.”
Gregg is quick to point out the fallacy that Class-A tenants breed Class-A headaches. He would know, since the vast majority of Tishman Speyer’s portfolio consists of Class-A commercial office space that houses high-profile tenants and guests on a daily basis. Informing and educating tenants about the types of demand-side energy management their buildings participate in and the benefit their participation has on the grid, environment, and community helps tenants not only cope with the shifts in energy use but embrace them. “Our tenants spend a lot of time at work,” he says. “The more they learn about our energy management practices the more connected they feel to the building. It makes for a better experience.”
Communication and education are the cornerstones of transparency in the commercial real estate industry. While his preferred method of tenant communication is face-to-face and one-on-one, Gregg also employs a host of mixed media approaches to explain why buildings participate in demand-side programs. “We offer free walking tours of our buildings. We do lobby info-graphic signs. We do elevator screen messages. We even have a tenant smartphone application. Communication is the building block to trust and the key to making [demand-side energy management] work.”
Before Tishman Speyer considers any demand-side energy project, Gregg evaluates the project’s potential for tenant and community disturbance and impact, the potential change the project may bring to the building’s asset value, and other aspects that can affect the project such as leasing and contracts as well as incentive programs.
“CPower has experts in every market to help distill down the key details for our national customers. That’s our job.”
–Michael Mindell, Sr. Account Manager, CPower Demand-Side Energy Management
When it comes to introducing and executing demand-side energy management projects at his company’s properties in New York and elsewhere in the country, Gregg isn’t the only one spinning multiple sets of plates. CPower and its team of energy experts are by his side, juggling platefuls of responsibility and communication to help optimize Tishman Speyer’s tenant experience.
A demand-side energy management company that serves more than 1,300 commercial and industrial organizations nationwide, CPower provides customized solutions that combine demand response, demand management, and distributed energy resources tailored to serve the specific needs of a given organization’s facilities. CPower’s creed centers on the conviction that no two buildings are alike and every organization is unique.
Among CPower’s national team is Michael Mindell, a veteran account executive who’s been involved in the demand response industry since 2001, two years after the New York energy market was deregulated by the Federal Energy Regulatory Commission. Michael serves as the primary contact for Gregg Fischer and coordinates with CPower’s teams in the various energy markets where Tishman Speyer participates in demand-side energy management to help present to Gregg the key information necessary to make informed decisions in a timely manner.
“The energy industry is highly complex,” Michael says. “Each energy market is different in their regulations and ways they operate their programs. CPower has experts in every market, including regulatory advisors and engineers with experience in hundreds of commercial real estate facilities to help distill down the key details for our national customers. That’s our job.”
“CPower does a great job of understanding things for us in a short amount of time. Then they come to the table with ideas and solutions.” Gregg says of the demand-side energy management company. “Michael and his team are an honest sounding board that helps me see things in a fresh and different way. Our relationship is such that they can offer very upfront opinions that make the case for doing something either weaker or stronger.”
That CPower operates in all six of the country’s deregulated energy markets and has extensive knowledge of the programs and regulations associated with each market is a big advantage when the time comes to evaluate demand-side strategies for Tishman Speyer’s buildings. “I don’t have the time to go through the fine print and evaluate each and every program. I rely on CPower for that. Michael and his team do a great job of digesting the details and explaining which programs in which markets we should be participating in and what the various impacts might be.”
In 2017, its first year working with CPower, Tishman Speyer had 34 commercial properties participating in demand-side programs in two energy markets: New York, where 25% of the company’s global portfolio resides and PJM, home of the world’s largest wholesale energy market. Through demand response programs, which pay organizations for using less energy when the grid is stressed, Tishman Speyer earned nearly $1 million in curtailment revenue during its first year while earnings in PJM approached $400,000.
In 2018, Tishman Speyer will expand its demand-side energy management participation to include the New England market. For Gregg Fischer, the expansion is about more than improving his company’s bottom line. “It’s my responsibility and Tishman Speyer’s responsibility to leverage the benefits of our demand-side energy management into an experience that tenants, visitors, and guests have never seen before.”
To Tishman Speyer, it’s all about the tenant experience.
Properly permitted, your emergency generation—EG—is both a reliability asset and a revenue generator. EG provides a great opportunity to earn revenue and save on energy costs through demand response (DR) and demand management programs.
The path from emergency generation to revenue generation, though, may seem like a complex, confusing, and occasionally contradictory thicket of state and local environmental regulations. Few organizations fully understand the scope and intricacies of EG regulation, which often results in misinformation, missteps, and missed revenue opportunities.
Fortunately, CPower’s extensive experience and knowledge base has led hundreds of organizations through the jumble of regulations and provided a clear path to monetizing EG assets. This webinar covers everything today’s energy managers and engineers need to to know to maximize the benefits of their EG portfolio. It includes:
- A brief history of emergency generation as a component of demand-side energy management, and the numerous rule changes that have created the current EG landscape
- How existing generators can be upgraded to meet increasingly stringent permitting requirements, bringing previously excluded MWs back into the market
- Success stories illustrating how CPower has helped find and reclaim “lost” megawatts and enroll them in lucrative demand response and demand management programs
Join Ray Berkebile, CPower’s nationally recognized EG permitting expert, and CPower engineer Alison Keefe as they lead this in-depth look at how your EG assets can generate revenue for you, too.