Piecing Together the Puzzle of Community Power
December 12, 2019 | Henry Herndon
The cities, towns, and counties are buzzing. The Granite Geek is scared out of his wits. There is something new in New Hampshire called ‘Community Power.’ It has captured the imaginations of many, but no one can quite seem to explain what it’s all about.
I figure I’ll give it a shot.
For the past few months I’ve been on the phone with all manner of energy wonks with different perspectives on Community Power. Each company, each person, each perspective provides a new piece to the Community Power puzzle that is beginning to take shape.
There’s the young woman who founded a Cambridge-based start-up deploying a technology that reads utility dumb-meters as though they were smart-meters. According to her, “our energy data sets us free.” She tells me she sees Community Power as a way to “encourage people to make investments in solar-plus-storage at the customer level” to manage peaks, reduce costs, and provide resiliency.
Then there are the solar developers, both local and international. From their perspective, if cities and towns really want to ink deals to build new megawatt-scale solar as part of their aggregations, they need to set Community Power up in a way that allows for long-term contracts for power. The one-to-three-year fixed-price products typical of energy brokers won’t do much for new renewables.
There’s the global renewable energy supplier that owns gigawatts of hydro, wind, solar, and storage and is active in California and New York aggregation markets. They explain that “structured renewable energy supply products... particular generation shapes that complement the generation profiles of other renewables... or match a community’s load shape” are a product they excel at, a product that has become particularly popular with aggregations in other markets.
There’s the company that sells energy risk management software to utilities and community aggregations. They tell me that “behind the customer’s fixed nine cent per kilowatt-hour energy supply cost...” is a portfolio of energy resources and contracts made up of power purchased in real time wholesale markets, capacity costs, contracts for blocks of power or a particular generation profile, long-term PPAs with various generators, demand-side management strategies, and hedges, hedges, hedges.
Finally, there’s the Executive Director of Redwood Coast Energy Authority (RCEA), one of the country’s leading community aggregations. He tells me about the cities and towns of Humboldt County, California, and how they worked together to form RCEA, the joint powers authority he now works for. He tells me about his Governing Board, made up of appointees from the different cities and towns that oversee him and his staff of six, the back office managing Humboldt County’s energy portfolio.
At first, the phone calls seem like a jumble of puzzle pieces that I can’t quite fit together.
But when I take a step back, the puzzle begins to form a clearer picture. Why not democratize energy procurement decisions to the manageable and physical geographic scale of a city, town, or county? Why not rely more heavily on distributed resources and prosumers to shave costly peaks, instead of paying exorbitant capacity costs for a fleet of centralized fossil fuel plants that sit idle for much of the year? Why not leverage data collection and the internet to make smarter energy decisions? Why not buy power from the renewable generator down the street instead of buying Renewable Energy Credits from Texas wind? Why not take into account the fact that a community’s electricity usage patterns actually affect the cost of electricity?
When I take a step back, Community Power almost starts to seem logical. And I start to wonder if maybe we’ve got it all backwards – maybe it’s the traditional way we buy power that doesn’t make a whole lot of sense.
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Governance, and a Shared Vision for Community Power
More than the calls with the energy companies, it’s the conversations with the municipal and county staff and officials of New Hampshire that are stuck rattling around in my brain.
They ask questions like, “at what scale is it cost effective to set up a shared back office to manage Community Power energy portfolios? How could we structure a Governance Board to oversee a back office that serves multiple communities? Once the back office is up and running, what is the process for new Community Power programs to ‘plug in’ and set up their own energy portfolios? What role does community size play in the governance and decision making? Do small towns have the same voting power as big cities? What is the right number of communities to start with?”
Evidently, there are still some unanswered questions. But it seems to me like New Hampshire's cities, towns, and counties are starting piece together a shared vision for Community Power. And as that vision comes together, it might well mean big changes for the energy sector.
December 12, 2019 | Henry Herndon
The cities, towns, and counties are buzzing. The Granite Geek is scared out of his wits. There is something new in New Hampshire called ‘Community Power.’ It has captured the imaginations of many, but no one can quite seem to explain what it’s all about.
I figure I’ll give it a shot.
For the past few months I’ve been on the phone with all manner of energy wonks with different perspectives on Community Power. Each company, each person, each perspective provides a new piece to the Community Power puzzle that is beginning to take shape.
There’s the young woman who founded a Cambridge-based start-up deploying a technology that reads utility dumb-meters as though they were smart-meters. According to her, “our energy data sets us free.” She tells me she sees Community Power as a way to “encourage people to make investments in solar-plus-storage at the customer level” to manage peaks, reduce costs, and provide resiliency.
Then there are the solar developers, both local and international. From their perspective, if cities and towns really want to ink deals to build new megawatt-scale solar as part of their aggregations, they need to set Community Power up in a way that allows for long-term contracts for power. The one-to-three-year fixed-price products typical of energy brokers won’t do much for new renewables.
There’s the global renewable energy supplier that owns gigawatts of hydro, wind, solar, and storage and is active in California and New York aggregation markets. They explain that “structured renewable energy supply products... particular generation shapes that complement the generation profiles of other renewables... or match a community’s load shape” are a product they excel at, a product that has become particularly popular with aggregations in other markets.
There’s the company that sells energy risk management software to utilities and community aggregations. They tell me that “behind the customer’s fixed nine cent per kilowatt-hour energy supply cost...” is a portfolio of energy resources and contracts made up of power purchased in real time wholesale markets, capacity costs, contracts for blocks of power or a particular generation profile, long-term PPAs with various generators, demand-side management strategies, and hedges, hedges, hedges.
Finally, there’s the Executive Director of Redwood Coast Energy Authority (RCEA), one of the country’s leading community aggregations. He tells me about the cities and towns of Humboldt County, California, and how they worked together to form RCEA, the joint powers authority he now works for. He tells me about his Governing Board, made up of appointees from the different cities and towns that oversee him and his staff of six, the back office managing Humboldt County’s energy portfolio.
At first, the phone calls seem like a jumble of puzzle pieces that I can’t quite fit together.
But when I take a step back, the puzzle begins to form a clearer picture. Why not democratize energy procurement decisions to the manageable and physical geographic scale of a city, town, or county? Why not rely more heavily on distributed resources and prosumers to shave costly peaks, instead of paying exorbitant capacity costs for a fleet of centralized fossil fuel plants that sit idle for much of the year? Why not leverage data collection and the internet to make smarter energy decisions? Why not buy power from the renewable generator down the street instead of buying Renewable Energy Credits from Texas wind? Why not take into account the fact that a community’s electricity usage patterns actually affect the cost of electricity?
When I take a step back, Community Power almost starts to seem logical. And I start to wonder if maybe we’ve got it all backwards – maybe it’s the traditional way we buy power that doesn’t make a whole lot of sense.
---
Governance, and a Shared Vision for Community Power
More than the calls with the energy companies, it’s the conversations with the municipal and county staff and officials of New Hampshire that are stuck rattling around in my brain.
They ask questions like, “at what scale is it cost effective to set up a shared back office to manage Community Power energy portfolios? How could we structure a Governance Board to oversee a back office that serves multiple communities? Once the back office is up and running, what is the process for new Community Power programs to ‘plug in’ and set up their own energy portfolios? What role does community size play in the governance and decision making? Do small towns have the same voting power as big cities? What is the right number of communities to start with?”
Evidently, there are still some unanswered questions. But it seems to me like New Hampshire's cities, towns, and counties are starting piece together a shared vision for Community Power. And as that vision comes together, it might well mean big changes for the energy sector.
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