NRG Energy and Green Mountain Power have teamed up to remake the Vermont grid with microgrids, distributed energy, and products to help consumers manage energy.
The companies intend to replace a “creaky old grid infrastructure from the 20th century” with a “21st century energy eco-system,” according to David Crane, president and CEO of energy giant NRG.
Early next year, the companies plan to begin rolling out new electric products and services for consumers and businesses. They will offer community solar, energy management systems, micropower, personal power, electric vehicle charging and similar distributed energy offerings.
The pair also intend to leverage NRG’s microgrid capabilities to transform the distribution grid “to a market-based platform designed to create efficiencies and distributed energy solutions,” according to a September 2 news release issued by the companies.
Green Mountain Power already is constructing a 7,700 solar panel microgrid to generate 2 MW in the city of Rutland.
The utility’s latest effort adds to a growing movement in the Northeast and Mid-Atlantic to develop a less centralized, more distributed and greener grid. Connecticut, Maryland, Massachusetts, New Jersey and New York have high profile regulatory efforts and pilot projects underway to foster distributed energy and microgrids.
Outages caused by Superstorm Sandy and other severe storms served as the initial impetus for the region to remake its electric grids. But increasingly states cite other benefits, such as reduced emissions and economic development.
Owned by Quebec-based Gaz Metro, Green Mountain Power is well situated for the statewide effort – the utility controls most of Vermont’s electric distribution system.
New Jersey-based NRG brings to the deal a growing portfolio of smart grid, distributed energy and retail energy products. The independent power producer’s backbone, however, remains a large fleet of wholesale generating assets that total about 53 GW.
In an earnings call last month, Crane said he sees industry value swinging from the wholesale to the retail energy markets. To that end, the company has restructured to capture more retail business. NRG also recently announced plans to acquire Goal Zero, which offers personal solar products.
Demonstrates utility microgrid play
Mary Powell, GMP president and CEO, described the utility’s partnership with NRG as “a really big deal for our customers and for Vermont.”
”Our customers consistently tell us they want tools to save money and move to renewable energy sources, and we can show the rest of the country how to get there. This is what our energy future looks like,” she said.
The deal also demonstrates how a utility might take ownership of the microgrid play, rather than fear it. Some utilities worry that the growing use of distributed energy will erode their customer base and send them into a revenue tail-spin, what has been dubbed the ‘utility death spiral.’ Other utilities see microgrids as a new business opportunity.
Crane said the Vermont project will “prove that the concepts of ‘electric utility’, ‘renewables’ and ‘personal choice’ are not mutually exclusive.”
The plan has the backing of Governor Peter Shumlin.
“I’m proud to stand with GMP and NRG today to announce a partnership that will help Vermont transform our energy future,” Shumlin said. “We know the threat that climate change presents our economy and our way of life, but with this challenge comes opportunity. This partnership is exactly the type of leadership we need to seize that opportunity and create a model for the rest of the nation.”
Vermont represents a good statewide lab for a more distributed grid because of its small size and strong green energy inclination. The state houses only about three percent of New England’s power plants, about 900 MW, according to ISO New England.
The state has been planning a major shift in its power portfolio with the retirement this year of the 604-MW Vermont Yankee nuclear unit. The state’s energy plan calls for achieving an energy mix that is 90 percent renewables (including transportation fuels) by 2050.
Vermont already derives about 20 percent of its electric supply from renewables, much of it from Hydro-Quebec imports, according to ISO-NE. But it has been pushing to secure more renewables locally through its Sustainably Priced Energy Enterprise Development (SPEED) program. The state plans to serve 20 percent of the total statewide electric retail sales with new SPEED resources by July 1, 2017, and 75 percent by 2032.
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