Harvard Law School Group Pushes Virtual Power Plants in Massachusetts

April 19, 2016
A Harvard Law School group is urging Massachusetts regulators to test virtual power plants – possibly as part of microgrids – as the state moves to modernize its electric grid.

A Harvard Law School group is urging Massachusetts regulators to test virtual power plants – possibly as part of microgrids – as the state moves to modernize its electric grid.

The school’s Emmett Environmental Law and Policy Clinic raised the idea of utilities demonstrating virtual power plants in comments filed last week before the Massachusetts Department of Public Utilities. The DPU is reviewing grid modernization plans proposed last year by its investor-owned utilities.

Akin to microgrids, virtual power plants are a collection of intelligently controlled distributed energy resources that can act like a single power plant in relation to the grid and energy markets. They often serve a group of customers that are either identified by a utility or aggregated by a private entity.

Still an evolving concept, virtual power plants take on various forms, and may include a range of distributed energy resources — from home energy management devices to energy storage and full-scale power plants.

Their newness leaves regulators grappling with some of the same regulatory and revenue issues that face microgrids, such as proper payment streams and legal use of utility wires.

In this case, Emmet suggested that the utilities test urban virtual power plants whose customers might be universities, municipalities or large corporations. They would buy their electricity directly from the VPP’s distributed generators at a rate negotiated with the utility, likely close to retail prices.

On another gnarly issue for both microgrids and virtual power plants – use of utility lines — Emmett cites Massachusetts law that it says gives them access to the lines.

Specifically, Emmett says that if the virtual power plant owns or leases distributed generation it qualifies for access to the lines as a generation company. The VPP also qualifies as a competitive retail supplier, since it would sell electricity directly to customers, according to Emmett.

The virtual power plant would pay a fee to the utility for use of the lines. But the Emmett clinic suggested the rate be discounted because the virtual power plant would use only distribution wires, not the full distribution system.

“Such demonstration projects could include microgrids that use wires owned and operated by distribution companies and technology that is similar, if not the same as that used in VPPs,” said the Emmett clinic.

Benefits of virtual power plants

Massachusetts stands to gain several benefits from virtual power plants, according to the Emmett clinic. These include greater resiliency, lower greenhouse gas emissions, and more efficient use of energy.  In addition, VPPs could help avert construction of costly infrastructure since virtual power plants are located close to their customers, according to the filing.

A virtual power plant also might be able to earn wholesale market revenue; it would have the opportunity to participate in ISO New England forward capacity, demand response and ancillary service market as single entity.

Emmett pushed for the virtual power plants as part of its larger call for social justice within energy modernization. The group pointed to a 2014 study that said the average Massachusetts household with earnings at less than 50 percent of the federal poverty level spent 42.6 percent of its income on energy.

“Energy burdens are higher for low-income households than other households primarily because their income is lower, but also in part because their homes tend to be older and less energy-efficient. The disparity increases when heating costs are considered,” the Emmett clinic said.

The DPU is reviewing the comments filed by the Emmett clinic and several other parties before issuing a final grid modernization order.

About the Author

Elisa Wood | Editor-in-Chief

Elisa Wood is an award-winning writer and editor who specializes in the energy industry. She is chief editor and co-founder of Microgrid Knowledge and serves as co-host of the publication’s popular conference series. She also co-founded RealEnergyWriters.com, where she continues to lead a team of energy writers who produce content for energy companies and advocacy organizations.

She has been writing about energy for more than two decades and is published widely. Her work can be found in prominent energy business journals as well as mainstream publications. She has been quoted by NPR, the Wall Street Journal and other notable media outlets.

“For an especially readable voice in the industry, the most consistent interpreter across these years has been the energy journalist Elisa Wood, whose Microgrid Knowledge (and conference) has aggregated more stories better than any other feed of its time,” wrote Malcolm McCullough, in the book, Downtime on the Microgrid, published by MIT Press in 2020.

Twitter: @ElisaWood

LinkedIn: Elisa Wood

Facebook:  Microgrids

Exploring the Potential of Community Microgrids Through Three Innovative Case Studies

April 8, 2024
Community microgrids represent a burgeoning solution to meet the energy needs of localized areas and regions. These microgrids are clusters of interconnected energy resources,...

Fpo H2 Innovation Experience Rendering Preferred

Emerson Technologies Help SoCalGas Deliver Clean Energy for [H2] Innovation Experience

The drive for a renewable, carbon-free energy transition reaches individual residences and consumers with small-scale hydrogen production and utilization.