Is There a Micro-grid in Your Future?

everybody is here welcome to Park everybody this is I think our ninth season here at park and we really appreciate the hospitality the park people have given us we love their dining room and the catering that goes along with it and of course this theater style auditorium so it's just terrific for this kind of an event so anyway I want to say just a word about Park so this is the the advertisement but it's a really interesting place many of you probably know this is where Ethernet was invented and a lot of the that Apple based sort of things like Windows and so on that were icons that were created here and then used so it's quite a historic place from that standpoint these days what it does is that researches and technologies and certain vertical segments typically on behalf of large companies sometimes it incubate s-- startup companies as well so that's that's what Park does and we really appreciate their being here okay so what you came to hear is is there a micro grid in your future and the answer is probably yes and it's going to happen in all kinds of interesting ways which you're going to hear about soon I want to introduce now our host and moderator Barry cinnamon who is also the event manager he put this together he he recruited the panel and everything and I call him mr. green because he's been in the solar industry for how long since 1977 1977 that's tops appearance on top of the nuclear engineering building at MIT interesting history anyway here's very soon [Applause] let's get to the right slides here Hey all right it's working all right Doug thank you very much for that introduction they're very very kind I want to get just a sense of the audience of how many people are familiar with solar and sort so if you have solar on your home or your business raise your hand well Cosette who doesn't have solar on their home business it's like 10 people okay um among the people well regardless whether you have solar or not who's planning on adding a battery to your to your solar system or just to your house you've got one all right just very few people probably have them now and Peter will explain why in a minute so I want to get started with some introductory slides just to set the background for this absolutely terrific panel that we have here the global warming problems that we're having just keep getting worse and worse you're probably familiar with the depressing UN report that came out last week about how hard it's going to be to keep global warming less than 1.5 degrees C it's it's just really really challenging this report talks about an investment that's required of 900 billion dollars per year by the world economy for 25 years to keep it under 1.5 degrees so we have to act very fast and hopefully we have the political will to do that now in addition to that money what's really going to accelerate that our economics I could draw economics are gonna drive these practical solutions and foremost among that are cheaper solar cheaper batteries and also ironically higher electric rates because that's going to improve the economics for customers yeah the interesting thing is conventional utilities cannot generate and deliver power as cheaply as behind the meter sources behind the meters way we characterize it if if your power is behind the meter it's owned by the customer if it's in front of the meter it's owned by the utility and it's just interesting how those economics have changed on-site generation and on-site storage is going to be a lot cheaper than any system that's put in by the utility and the electric rates that we're paying are dramatically different whether it's utility electricity or your own electricity for example California average electric rates are now 22 cents a kilowatt hour if you have rooftop solar you put in a system now you're looking at electricity rates of about seven cents a kilowatt hour amortized over the lifespan of the system so it's a third the price and it's just gonna those that discrepancy it's just going to increase solar is gonna get cheaper cheaper and you know utilities no doubt in my mind are gonna continue to see their electricity costs go up now battery storage is growing really fast but it's tiny it's microscopic these are some slides from green tech media we're still at the blade part of the hockey stick you see that little red curve over there now of course we're in sharks territory so my apologies to you diehard Boston Bruins fans now you look at these charts the utility scale and and some commercial storage has been out there for about five years but the first practical residential battery storage systems just started shipping about a year total we LG Chem was nice enough to provide us with this 10 kilowatt hour battery if anybody wants to see what it's like come over and you know kick the tires a little bit but this is the kind of battery that's going in and it's they work and that's that's just a terrific benefit now what what many people are gonna think you look at this hockey stick and what's going to continue to happen it should continue to go up how many people based on this curve think that we're gonna install more residential batteries in q4 than we did in q2 how many people think it's going to go up okay believe it or not the sales of batteries like this and Tesla's they're actually gonna decline at the end of the year the hockey stick is broken and the reason is we don't have enough batteries the demand just kind of went through the roof and LG Chem and Tesla pretty much the only ones out there they really just were surprised by the incredible demand and Peter's gonna talk about that a little bit more later and you know we kind of know where he's based so we know where we can get the batteries if this emergency oh by the way this one's a dummy it's not gonna work okay but nobody just buys batteries you're buying a complete system just like nobody buys just the solar panel so you need you need for a battery storage system or energy storage system we need the solar panels we need an inverter we need a backup sub panel for critical loads because these systems right now can't power the whole house they can't power a central AC but they can power your critical loads pretty much indefinitely as long as the Sun is going to shine the next day but what's what's interesting about this kind of battery technology unlike conventional lead acid technology which is what I used to put in 15 years ago is this is an integrated battery subsystem it includes a battery management system with the charge controller temperature controls it has it's almost a bulletproof outdoor rated enclosure it has circuit breakers and software so you can just kind of hang it on the wall and it's just going to work for 10 years I believe the Tesla system similar now in addition to the battery you've got the inverter and the inverter as you can see in this picture it's kind of the heart it's a centralized part of the whole system it connects to the solar it connects to the grid it connects to the battery and there's software that runs on the inverter multiple layers of software that allow installers to operate it customers to see the performance and the manufacturers and even the utilities to manage it and and also the inverter provides a communications gateway Communications is really a tricky challenge but you know we'll talk about that more now cool thing is we all know this is just a nice trend we saw the the graph at the beginning battery costs are coming down fast but here's the irony even if batteries were free completely free these battery storage systems would still be relatively expensive you can just see if you subtract out the $2000 cost of the cells from the $12,000 cost of the system it's kind of wondering you know how does this apply to electric vehicle it's kind of similar right so I I took a look to see what the the SRP of a Chevy bolt is thirty six thousand dollars Bernadette you drove one here right good and and so then I wanted to see what the battery subsystem for that that Clarke cost and GM has it on their website for fifteen sixteen thousand dollars so the subsystems about half the cost of the complete system and and interestingly for the 2018 battery system that you might add to your house with this battery the battery subsystem itself is about fifty five hundred dollars so where's the rest of the costs if the cells are so cheap well there's a lot of other cost factors involved we call them soft costs in the industry it's things like installation permitting inspections interconnection with the utility overhead it's just it's just like building a house right two by fours are really cheap but it still cost $350 a square foot to build a house around here so there's just a lot of work and labor involved so in addition to reducing these soft costs there's another big opportunity that's the infamous duct curve at least its infamous in our solar industry we all know what it is you might have heard about it read about it so this duct curved on the left is basically a representation of California's electric demand of how the demand changes throughout today and when I started in solar out here about 2001 the peak demand was around 1:00 p.m. in the afternoon electric rates were highest on the time-of-use plan in PG&E territory from 10 a.m. to 2 p.m. but what happened is a lot of people started putting in solar so it kind of mellowed out that curve there was no longer a blue spike in the middle of the day and then what happened is the utilities added a lot of solar and wind and you can see that curve at the bottom that gray curve which is a nice bell-shaped curve shows what happens to the solar generation during the day and when you overlay those two you get this orange you know dip look looks like a little bit of a valley somebody must have thought it looked like a doc maybe they had too many brownies that afternoon and now we're kind of stuck with that duck curve image forever so the challenge for utilities and we look at looking at at the right in in the morning as solar starts coming on the utilities have to gradually shut down their generation otherwise there's going to be too much generation because we've got solar from the utility we've got behind the meter so they kind of start shutting down those natural gas plants the big problem is they have to ramp up very quickly in the late afternoon that's the neck of the duck that's where the big problem is and battery storage is the absolute perfect way to soak up that extra solar energy during the day so you can store it and then use that energy in the evening at the you know that the head of the duck and there's good economic reasons to do this so so you think that the reason why customers would be installing batteries right now is to react to the fact that there's this duck curve and they want to you know save some money by doing that well they want to bet you think that the customers would want to cook the ducks goose so to speak I'd probably completely mangled that metaphor and it's surprisingly wrong they don't care it was a big surprise than to many people in the industry let's look and see why businesses and homes are installing battery storage if you look at the top part of these lines that the jagged mountainous parts this represents the power demand for a typical customer whether it's residential or commercial they're all kind of similar now commercial and industrial customers want to remove those Peaks they get hit with these things called demand charges for example for a commercial building like this building although maybe every gets a special rate who knows for this building in nine o'clock in the morning equipment turn you know it turns on people plug in their electric vehicles there's a spike in the morning and they charge extra really high amount for that peak DeMint so if you have if your business has big banks of batteries you can deplete the battery at that point and you can eliminate those really high demand charges many companies have higher demand charges than their kilowatt hour electric rate charges so that's a really good reason to put in batteries for from a commercial customer standpoint yeah one would think that residential customers would want to install their batteries to time shift their energy we call it rate arbitrage Inc the the day time rates if you're on the e V electric rate in PG&E territories twenty five cents a kilowatt hour so if you have solar you can run your meter backwards of twenty five cents a kilowatt hour that's nice but the afternoon and the evening rates are forty five cents a kilowatt hour it makes a lot more economic sense if you could store your daytime energy in your battery and then you use that daytime energy in the afternoon and evening when it would be forty five cents a kilowatt hour it's a kind of good economics the big surprise to the industry almost every inverter company just kind of missed this and I got hats off to solar edge because they didn't the the residential customers don't care about this arbitrage thing yet it just it surprised everybody especially some inverter companies and pattered companies now the the surprises homeowners and and some businesses they're putting in batteries for when the grid goes down you know that shouldn't happen we're like first world here but you know sometimes maybe not we've all experienced occasional blackouts but it's getting more and more common you might have read the paper that last weekend PG&E cut the power off to 60,000 people up in Napa Sonoma and Lake Counties because of high wind events at 50 mile an hour wind 55 mile an hour winds so PG&E said well we don't want any chance of any more fires maybe their insurance company we're blinded the reliability and they shut the power off to 60,000 people we're just you know there's no fire there's no earthquake its new a nice breezy day no power and and that kind of thing is gonna happen more and more so not only are these grid failures more and more common but we're also much more dependent on electricity when the power goes out in our 21st century paradise we can't cook we have no hot water we can't heat or cool our house we can't drive anywhere to get food because our evey might be out of batteries we can't even call our friends to complain it's like Gilligan's Island in 2018 and that's the reason why most residential customers are putting in batteries it's for that resiliency okay I've talked way too much already you came to hear from our fantastic panel of experts these are like I would consider these the world experts on these issues so I'm gonna get started here our first panelist is let me get the slide going here Bernadette Del Piero Bernadette's the executive director of the California Solar and Storage Association for 40 years it was called the California Solar Energy Industries Association but Bernadette was farsighted enough to say hey you know we better rebrand because this industry is going beyond solar and and as a result of her hard work she just came off a successful three-year campaign for battery rebates in California and plus last week was a whirlwind of planning and he will board meetings and an annual meeting so I Bernadette a good friend and I would absolutely without a doubt say that she's the smartest and most effective policy advocate for solar and batteries in the entire country maybe in the entire world but deal beyond the u.s. right now so welcome here burr today [Applause] Thank You Barry that you know is a complex that there's not that many of us so to say uh so again thank you so much Barry Barry is like Chrissy's in the back there she knows Barry goes everywhere with a Swiss Army knife and that's basically a metaphor he is the jack-of-all-trades he is everything he is everywhere he's the former board president of calcia has been in the industry forever and it's always behind the smartest best and in this case one you know best well put together panels so it is a pleasure to be here I came up from Sacramento to come meet with you guys tonight I'm a little bit intimidated by Ana MIT grads under so lowly Cal grad but I do have a PhD basically in communication and in promoting clean energy technologies I've been doing policy work in Sacramento since 2002 I'm focused on distributed energy resources and so it's been a really pleasure to come on board with the California Solar and Storage Association real quick a background on us we are the state's oldest and largest clean energy business Association we have over 500 business members statewide and represent the whole sector of the industry of solar and storage contractors and manufacturers and service providers so it's great to be here I I want to start with four of my favorite facts related to solar one is that we are today it doesn't surprise me that so many people raise their hands in the room here you'd be surprised how many people in the state legislature would raise their hands too it's helping us out a lot as we work to pass legislation butwe installs 11 solar systems an hour in California all year long 11 an hour and what my favorite fact related to that is twice as many people go solar in Bakersfield than in San Francisco and that a great fact and one of my other favorite experiences since joining the kalsa team in 2013 is the fact that it was Republican farmers that basically led to the passage of the federal investment tax credit they are the ones that pull together all the district meetings with all of those Republican members of Congress and and got that through with a republican-controlled Congress so this is not this is the politics of yes I like to say in Sacramento and and that's exciting because that's how we're going to get these solutions out on the ground and on the road and in our homes Barry mentioned all of those soft costs to deployment of clean energy resources and those are a real challenge a real barrier however one of the flip sides of that cost putting aside bureaucracy and Byzantine processes that we would like to streamline but is that solar and storage especially at the distribution distributed level is a job creator we employ over 86,000 people statewide those are in Bakersfield as well as San Francisco and that is more than all of the investor owned utilities and municipal utilities combined so we are turning those solar rays and those battery cells and to real jobs for real people and economic opportunity what I wanted to just focus on is what I think is really interesting as somebody who's been pushing transformational policies in California and hoping to lead the charge for the rest of the country is how similar where we are today is to where we were with photovoltaics in circle 2007 2008 and so Barry mentioned actually the shortage of battery cells that we're experiencing right now that's exactly what happens to the market basically around 2008 when the the solar industry started to take off in California and other countries around the world and manufacturing hadn't yet caught up once they did it only took a little bit then prices just dropped and we saw math massive deployment so real quickly I just have four slides to kind of illustrate where we're at so this is again piggybacking on some of Barry's slides this is California storage projects these are behind the meter storage projects both commercial and residential from the past 12 months and these are by reservations so those of you who really like to dig into data some of these will drop out some of these reservations won't be real but it's still a pretty good measure and proxy of how we're doing the the orange bars are megawatts installed and the blue line is the number of systems and so as you can see we've installed we're basically at the point of and July again over that 12-month period of installing about 160 megawatts of again behind the meter residential and commercial storage systems totaling about 5,000 installs okay so keep those numbers in your mind I'm going to show you the exact same time period for photovoltaic solar systems rooftop solar so as you can see here the exact same time period we installed a gigawatt again compared to 120 megawatts and 120 thousand systems over that same period of time this is basically where we are here is essentially if you were to map out that growth of photovoltaics that we've seen in California since 2002 you'd be we'd be basically around where we were circa 2007 so we're just as again Barry's hockey-stick we're just at the brink of tremendous growth but policy public policy absolutely drives these markets they don't happen on their own consumer demand is essential I always say there's three things we need to build markets transformational markets we need consumer demand we need experienced businesses and we need public policy and politicians that embrace the change and it's those three things together that make California so important to to our clean energy marketplace so SB 700 massive kudos to state senator scott weiner from san francisco he stuck with us and fought really hard to get this bill to the finish line in face of opposition from the utility companies to do something pretty simple provide incentives upfront incentives for consumers to add a battery to their home their farm their school their business we were able to get it through it's focused on customer sided energy storage it extends an existing program out to 2025 it authorizes up to 800 million dollars and these consumer incentives and it makes sure to preserve a good portion of the funds for disadvantaged and so this is just a visual of what we hope to see happen this is the almost identical chart to what we did see happen with photovoltaics again we passed in 2006 the million solar roofs initiative that did the same concept as what we're doing with storage we created a long-term program provided that upfront incentive drove consumer demand and lowered prices so what you see here is our vision of what hopefully will happen with storage if not sooner than what we're predicting here so again the blue bars are the megawatt or the numbers of systems in this case building up cumulatively over time as you can see 2008 so we're just getting out of the gates with our roughly four to five thousand systems that we expect to install this year and that blue line coming down is the price per kilowatt hour so as we decline as the price declines the rebate will basically also decline and what the consumer savings the value is will basically stay the same over the course of that period so we'll bring the prices down by increasing demand will bring that rebate down to make those 800 million dollars go further and we'll create all those jobs and economic opportunity as well as clean energy all along the way so last but not least I like to kind of continually remind our policymakers that these types of investments upfront investments while may seem expensive when they're casting these votes are really smart investments in the long haul so right now if we just do energy the old way where we as ratepayers all put all of our money in building centralized power plants and then having to build all the transmission lines and not keep all of that system we are actually spending way more money than we need to compared to if we were to build up our distribution system and distribute energy resources using more of our energy on-site negating a lot of the need for expensive infrastructure investments and in fact in March of this year Cal I so cal an Independent System Operator announced that they that there were 2.6 billion dollars of grid investments that were before gone because of distributed energy resources 2.6 billion saved by all of us ratepayers whether we had solar and storage or not those were real savings this is what we've been promising for many years and it's finally coming to fruition just to give you a context to that 2.6 billion that million solar roofs initiative I spoke to that we passed back in 2006 that was the three billion dollar program so it is more than going to be paying for itself for ratepayers to make that investment not to mention all of the clean energy and Community Development and economic development opportunities that it created so with that I'll pass it over to our next speakers and I look forward to the conversation and the questions Thank You Barry [Applause] all right oh great Thank You Bernadette next is Peter Gibson Peter's the head of energy storage solutions business in North America for LG Chem I never heard of LG Chem but that they're just a monster in batteries one of the world's biggest battery manufacturers their product this and their commercial and utilities conversions their products are so good that they can't make them faster right now Peter's main job is mostly to tell customers to give him accurate forecasts for next year because there's just no batteries right now they'll be here and basically just telling customers that wait till January for the next shipment and make sure you get your orders in early thanks thanks for inviting me to participate and thanks for inviting ology came to join the salient event and appreciate everyone spending the evening with us I feel like I'm the bad guy already without even saying a few words being the cause for these market slowdowns and and probably lots of other ill-fitting bad things too so what I wanted to do in the space about five minutes is just a very quick summary as to a little bit of LG and I don't this to be a sales job so apologies if it comes across that way that's not the intent it's really just to give a flavor to to the audience's to what what is happening within one of the world's largest battery companies there's others which are going through a similar thing say a little bit about the the way which you serve the market by means the products we put in there but then it's really lead enough to what our vision is going forward and and I think it's important just to make sure you understand where we are as a company and where our products are before we get on to to to the vision um so LG Chem is part of the LG group and you may be more free with LG in terms of TVs I since joined LG I now realize almost every Hilton or Hilton chain hotel has an lg tv in the room and it can never escape from work when you even on vacation and in the cell phones as well but we LG is a very large 130 billion dollar global business but it's got a number of business units are shown on this slide that are into chemicals electronics and telecoms and services so electronics that's the TV it's the white goods it's the the the telephone services on the right but LG Chem we are the chemical company part of the LG you go up and we are a scratchy a separately traded company it's a bit different how Asian companies are constructed but we have our own share holdings and we are a separate company traded on the sole boss and that gives us a lot of flexibility it's nice to have the big parent behind us with all of that financial security that brings but we have a lot of ability to to run the business a little bit independently now so LG Chem and I'm just diving straight into our business now we are about a twenty four billion dollar business the number varies a little bit depending upon what exchange rate we use here but the core competency is in chemical materials and and we we've been in this business on the chemical engineering business for more than 50 years and we used that knowledge of materials to move into the battery business back in the 1990's hard to believe was that long ago about 25 years ago is when LG Chem first got involved in lithium batteries and that was for consumer applications shown on the left side of the of the slide the usual things their laptops and cell phones but that gave us a good understanding of different lithium chemistry's and what worked well and that was used as a lever to get into the automotive business in the early 2000s and the automotive business shown on the top right that's a much harder business to get into especially for an Asian company and trying to get into the North American or the European car companies and we started off with some contracts with the Asian companies are the Asian car manufacturers but the big breakthrough was with the selection of our batteries by General Motors for the Chevy Volt with a V the hybrid the plug-in hybrid and that was the nearly 2000 that really enabled our battery business automotive business to take off and we used the automotive battery expertise to get into the stationary storage or stationary storage was the third link in the train and we we got involved in that prepa 2008 2009 so almost in that fit just that's in ten years but the key thing here is then the key message on this slide is the automotive and the station energy storage businesses have a very strong bond they basically use not just the same chemistry but the same type of cell and you'll see why that's advantageous not just LG Chem but to our customers when we talk a little bit about the about division just to put into perspective as well um I completely agree but what how Barry started off is saying that it was the tip of the blade on the hockey stick we sometimes have to remind ourselves an LG camera I did the term I use were still at the embryonic stage in the business despite the fact so much is being done in the past five years it's still a very early stage business having said that on the automotive side we've got almost a million vehicles around the world on the road with LG Chem batteries and that's everything from a small hybrid to a full battery electric vehicle and on stationary storage about five thousand megawatt hours of capacity that either deployed or on firm order so there's an awful lot of experience building very quickly on the road and stationary and to support that even though we are critically short of production capacity as has being mentioned about three million times already we manufacture in three continents we manufacture in Asia in Korea and China we manufacture in Europe in western Poland and surprise surprise we actually manufacture in the US and I'm not taking anything away from our friends in Freemont they've done a great job in promoting the storage business but there were many years behind having the gigafactory operational we had a factory in Holland Michigan manufacturing a giggle as of capacity in 2013 albeit for the automotive business for GM so let me talk a little bit about our products and I only want to do that with one slide and it's I'll just give a couple of details for each product segment on the Left we've got the residential business and I think I all bury some some credit for bringing this along to the event it's always good to see some hardware it's very often very rare we get a chance to see some hardware the on the residential business what my colleagues Lindt ran in the audience here she manages our North American residential business and we only delivered our first battery in April last year and this year we'll be installing more than 10,000 units and next year that residential business will be 125 million dollar business just for the batteries alone and it's extraordinary to really genuinely taking us by surprise how quickly that market is to take it off today we've got batteries in 44 US states California is unquestionably the largest market with about 60% but we simply have not been able to make enough of them it's it's it's really thickness by surprise next year even though we're more expecting to increase our production by about 3.5 x I still think we're going to be struggling for capacity for the next segment on the top right is the behind the meters commercial industrial segment I'm showing a picture of just one typical system that was put together by Lockheed Martin using our batteries but we work with about five other system integrators and and that business is being going extraordinarily fast in the past couple of years and the main reason for that is five years ago when I first came into the business most of these behind the meter systems were custom built but now we've got experience integrators like Lockheed Martin Johnson Controls caterpillar who are putting together standard building blocks and by having a standard building block this factory assembled test and drop shift there's the potential to reduce the cost that the installed cost that the equipment ambient installation costs very optimistic personally about the growth in that segment going forward and then last but not on the bottom right is the in front of the meter grid scale systems that's the the segment that most of the media tends to pick up pick up on but as we'll see later that may not be where the the real market opportunities lie so moving forward the vision I think it's really exciting to see how fast the mark how fast the map is well but also what lies ahead and this everyone's got their own crystal ball and C's is slightly differently but the subject of tonight's talk as micro grids I looked upon that is really mean distributed systems to student storage and unquestionably the the cost-effective storage is a key element to the success in distributed systems where therefore microts or whether it's just rooftop solar in storage and much is being achieved in the past five years to reduce costs when I first joined LG Chem the battery costs were about eight hundred bucks a kilowatt hour and now for grid scale systems they're about twenty five percent of that so a lot has being done in five years a lot is often made of the the mass production as being a way to reduce costs and to an extent that's partly true and this this slide shows the just the picture from LG Chem and if I can just it's about 60 giggles annually and in 2020 it'll be somewhere close to 130 keyboard ah so more than doubling and even then I think we're gonna be struggling to keep up with with with demand but mass production helps to bring costs down but it's not the only ingredient coming back to what we said before this the business is at the early stage of the hockey stick there's a lot can be done with the cell chemistry improving cell chemistry improving the module design improving the system design integration with the inverters and so I think it's a bit misleading to think that mass production is the only path towards bringing battery costs down there's lots of other factors that will help drive that and just to illustrate how I think this this plays into the hands of the handful of very large global companies are in the battery business LG Chem for the past five years we've spent a quarter of a billion dollars on research and development on batteries and the good thing is we can spread that R&D across two large segments automotive in the SS stations towards others and that's aimed at trying to improve energy density obviously reduce costs of course but if we can reduce the degradation and we extend the life they will all help to reduce the cost of the installed system so so a lot more that can be done apart from just the manufacturing costs and then the final thing in terms of the vision that would suggest is coming back again to micro grids the media does get a lot of attention on the large grid scale systems the announcements by the PG&E SC for large front the media systems gets a lot of tension but I personally think that the biggest market Falchi can in say 10 years time is going to be for distributed systems and distributed can be residential it could be behind the mean C&I it could be smaller scale systems on by the utility of the substations but that's where the majority of battery systems will be installed not thing large front the meter systems and so the answer to Barry's question is yes my friend rates do have a future thanks [Applause] all right terrific thank thank you Peter that was that was great I'm glad to see that you're here that we do have a future it's good it's good okay it's my pleasure to introduce Lior Handelsman Lear's the founder of solar edge the most profitable inverter company in the world we use their inverter they're great they work he started about a dozen years ago with optimizers that were you know improving the efficiency of an individual solar panel optimizers and software software was kind of handy then they did a very smart thing they they came out with their own inverter and software with the inverter now they're shipping their storage inverters that work with the LG Chem battery and in future others with software next I don't know what it is they're going to be doing but it's probably going to include software Lior has the longest commute home Bernadette's second longest to Sacramento but lear's got to go back to Israel but he's always thinking five moves ahead so personally I would never play chess with this guy [Applause] thanks Barry and very mention that I found it so love it so one of the first people and you know anything about solo when when we came up with the idea of optimization in solar in solar systems we googled for experts I think Perry was one of the first names we found and we flew in I flew in hoping that belly can help me he refused but we ended up still working together and being friends so thank you very and so actually I want to start by telling you how did we migrate into storage inverters and we as Barry said we were selling inverters to a to2015 we took so much public getting a very nice market share in solar inverters and in many of the homes that inverters our inverters were installed there was some kind of backup solution may be a small UPS for a for a computer or maybe a generator and the devices smart devices IOT was waking up smart thermostats and and other smart devices that control loads around the home and they will charge us and we even saw some systems where there was separate what was called AC coupled storage systems and the regulation around the world started to change same like in California from net metering it moved to time-of-use net metering in Hawaii solar systems were for a long period not allowed to be installed because there was too much solar on the grid kind of like a duck curve in the in the Hawaiian market and all around the world Australia Germany feed-in tariffs and net metering were kicked out and replaced with regimes well basically the utility said we don't want solar energy on our grid if you have solar energy use it or lose it and that actually we saw that as the next evolution in the PV in the PV entity it is the next evolution in the it was actually the next evolution in the PV market and we decided that our next generation of inverters are actually going to be one inverter to rule them all that is our storage inverter some other companies also have this you don't have to buy it from salvaged but we realized that if you really want to use your solar energy or else you lose it you need one inverter that can control a battery and without solar energy to the battery if you don't have anything to do with it so if it's now midday everybody's out for walk and your PV system is generating energy then why won't we throw that energy into a battery but even if you don't have a battery let's let's turn on the hot water heater if it's an electrical hot water heater let's charge the car lets out the energy to to energy load around the home so one inverter to rule them all an inverter that can provide backup fold home and involved in case of an outage and inverter that can control the battery and inverter that for show controls the the PV generation and even control loads around the wall the the home and your Eva charger so that in a market like Hawaii Chism what we call a maximize self consumption market you really can get to it to a point where you utilize in your solar energy even at night from your battery and utilizing your loads in a much smarter way because if you have a pool pump and you want to filter your water for 30 hours a week let me let the inverter decide when to do it and when will the inverter do it when those either low heads or when there's available energy stalled or being generated so that was a very nice face and in actually that is a lot of what we sell now in many of the geographies in Germany today one out of two systems that is installed is already installed with with batteries in Australia it's one out of four here in the u.s. it's not that that much if we're not in California but we are at a clear rate to go there in why I would assume that many of the systems are already with with storage and that actually opens a new opportunity and that is what in our belief is the next step for the solar blade we are all turning from consumers to what we call post humans you are all everyone that raised their hand you're producing energy and you're consuming energy and if you are a producer and a consumer then you are actually a possum and that is bringing about an evolution in the way our grid is built so the gate is slowly because grids don't change that fast we don't want them to change that fast we like our reliable power but grids are migrating from centralized network where there is generation central generation and long transmission lines which are by the way very very expensive and how to maintain it need to be continuously beefed up because we all consume more and more energy the grid is migrating to a new model of distributed the network where everyone can consume and everyone can produce and if you produce you don't have to just stay in this type of maximize self consumption if I have energy in my home and you don't have energy in your home why won't I produce energy and you can consume it it would save the network a lot of hassle don't have to route the the energy to a lot of losses and a lot of cables and you don't have to beef up continuously the network to our neighborhood because I have enough capacity to feed your home or we have enough capacity to feed everyone's home and that's the next step of day of the grid is bring some concerns from cyberattacks it also brings the zillion C from cyberattacks and it brings a need four very software exactly VPP so I want to show you a concept which is actually already running a concept which is called in the industry virtual power plant what is a virtual power plant it's an aggregation of systems so a virtual power plant is when you have a lot of systems these systems have batteries these systems have solar generation this system have manageable loads like iffy charges or hot water heaters or whatever big loads that you may think of and the utility to a software interface to a cloud software interface can actually see these systems as if it's one big power plant now what you see here is a ISM is a cloud service it's an aggregate or service Tsarevich provides this but also other companies as as I said early but not as many and we actually have running deployed virtual power plants around the world well basically if you are a network operator and you have a shortage of energy in a specific area and you let's say that you need let's take the simplest case possible you need 10 megawatts of power for the coming two hours because of that ramp in the Ducks neck and we want to cut and we're going to cut the Ducks head so rather than generating more power in the power station and maybe over time as lows go up you need to beef up the substation you need to beef up the power lines why won't you control all the system in all the systems in that area make them generate they need it then megawatt hours for two hours the 10 megawatt peak power for 2 hours in order to fulfill the need in that area now for a utility to do that when you have 10,000 systems or or even a thousand system that's very complicated because every system is different your system is down because your because you're out in and you have an outage and your batteries have depleted and you are now charging your car and your system is producing a lot of energy because you have a solar panel it's too much data for a utility operator to manage and decide what to do so the aggregate or service what it does it gets a command from this time to this time you need to dispatch ten megawatt of power the aggregator will then disaggregate that command into thousands tens of thousands of separate commands two separate systems if if one system has a low state of charge it will dispatch it at low power so it would last for the full duration of the event if if if another system has a lot of power it will dispatch it at a higher power it means if you are charging your car and you allowed us to control you if you charger then we can take your Eva charger off the grid for two hours that is like pushing power to the grid it is exactly symmetrical it's it's the same so it will disaggregate that command to thousands of systems in order to fulfill the load so that's one example another example is an energy retailer what do energy retailers do energy suppliers they buy electricity at the wholesale market at very ating prices and they sell them to us at little price which is a fixed price and now you have a price sells in the wholesale market me as an energy return I start losing money because I have to buy power expensive because there's a pice out on the wholesale market and I cannot up your prices because we have we have a deal if I as an energy retailer have a VPP deployed I can deploy that VPP and hedge against this myself and of course you as homeowners you need to benefit from that so usually the economy of VPP means that for you giving access to your resource you are getting paid in companies one very typical form of compensation is that you get part of the of your system at a big discount if a battery is I don't know X thousand dollars then you get it at two hundred five hundred dollars less and for that you give access for ten hours a year which is nothing in money it's a great deal for you so everybody makes money the system owner the energy retailer the network operator in this type of system it's not a dream I want to show to you how it actually looks so I might have to move over there but what you see here is time over power chopped so if you want one hour of power the the available power that this network can give you is kind of in the range of 0.6 megawatts if you want two hours of event you can see that the power that you get is around 0.5 because you want more more time so we cannot dispatch the system at the same power level so that's what you see over release is a is a time of a power chart but I want more power so I can add v's if this can give me power how by taking them off the grid so now you see that you get an added power of UV this is calculated on the fly as you're operating the system the system looks at the status of in this case 1250 connected systems 1250 EVs and 1000 solar systems see the status of every one of them and calculate on the fly for the utility operator or the network operator how much available power they can dispatch from this VPP I can now select an event to our event for 0.6 megawatt power and I dispatch that event and at the given time the given power will be dispatched and the utility operator tracks that event because sometimes we cannot in real time fulfill it systems go down homeowners come home and change the status of the system so they see real time how is the event dispatch and they can react and add more systems if they need so so this is an actual example just a few days ago we dispatch systems here in the PG&E area we have running VPP is in several parts of the wall I gave you two example we have running I can give you another one we use aggregation of systems to stabilize frequency on the grid it's a very tricky thing for a network operator to stabilize frequency as power is reduced as load is is reduced on on the grid the generator start to spin faster so the frequency goes up and as dead and as load increases the generator slow down so stabilizing frequency is a big deal so we have V PPS that react to grid frequency and give more power or take more power in order to help stabilize the grid that's a great deal for you you have a solar system you participate in that we take minut amount of powers from everyone and we as an integral stabilize the gate that's worth a lot of money it's called what is called primary capacity reserved for stabilizing the grid this in our view is the future of solar eventually I don't know exactly how much time it's going to take solar systems are going to grow from solo - solo plus storage that is not not the future that is the reality now and they will be great - a network of systems why because I really solar as Barry said so I was already cheaper then then fossil fuel and fossil fuel is eventually depleting but for us to get to a point where solar can be a leading player on the network and be part of the base load it needs to be a connected system because there's a lot of sense in distributed systems as Peter said as Barry said but for that they also need to be connected that is the future of a of a solo it's a little bit futuristic what I showed you now yes we have running VPP snow they are by no means even 0.01 percent of the amount of systems that we have deployed and not even 0.001 percent from the amount of solar systems deployed so it is still futuristic but in our view this is the future of solar and is it a micro grid or a macro grid what I just showed it's a micro mcafee right thank you very much all right terrific Thank You Lee are well have to I will never not take a meeting with you and guy again it's just it's it's all about software okay all right it's my pleasure to introduce the next panelist so we've got some we're talking about policy we're talking about the batteries we're talking about the inverters and software now we're going to talk about utilities but we're not going to talk about ordinary utilities Jan pepper is the CEO of Peninsula clean energy if you live anywhere between here and San Francisco Jan probably sells the electricity for your home or your business Peninsula clean energy is a new type of utility called a community choice aggregator or CCA so Jan will explain a little bit more that in their presentation and have to say that Jan is both in experience and named a very seasoned executive and I'm especially happy to have another spice joining me on this panel what a connection that's great so so how many of you live in San Mateo County all right so you are no doubt a peninsula clean energy customer so we are prints a clean energy is the official electricity provider for San Mateo County and we're providing all the residents and businesses with cleaner and greener electricity at lower rates so this came about actually in 2002 a law was passed that allowed government agencies entities like cities and counties to aggregate their electric load and choose what kind of electricity they wanted to have for their constituencies nothing came about from that bill until about 2010 when Marin clean energy started and they were the first CCA that started and we are the fifth in San Mateo County and we launched initially in October of 2016 with about 20% of the residential load and all of the municipal load and then we continued to roll out to all of our customers in April of 2017 and it's an opt-out program so basically everyone is automatically a customer unless you decide to opt out so I'll go into the statistics of that a little bit in just a little bit and we offer two products so as a peninsula clean energy customer you receive the default product which we called eco plus it's 50% renewable 85% greenhouse gas free it's priced five percent lower than PG&E and everyone receives that product if you want you can opt up to Eco 100 which is the 100% renewable product it's green e certified and we charge one cent per kilowatt hour more than Eco plus it's about two two and a half percent more than what you would pay PG&E for their typical product which is right now twenty nine percent renewable so it's a better product at a lower rate so those of you who live in San Mateo County how many of you have heard of Peninsula energy before okay so that's most of you I think so that's good as a basically this this whole transition happened you didn't have to do anything we sent you four notices as required by law a lot of people just took those and you know filed them away to read later and you maybe haven't read them yet so now you know all about us so how does it work so we purchased the electricity on your behalf PG&E still delivers the electricity over their lines and they still send the bills and you benefit from cleaner electricity at lower rates so there's a line item on your bill that says peninsula clean energy generation services and there's a credit on your bill for what you would have paid PG&E had they been providing about electricity to you so what what what are we all about so there's about 300 thousand accounts in San Mateo County only 2.4 percent of our customers opted out and went back to PG&E which is a really great statistic that's pretty much the best of all of the CCS that are out there and 16 of our cities opted up to 100% renewable energy because of the lower rates that we're charging seventeen million dollars is being saved by the businesses and consumers that can be reinvested into the community 261 million pounds of carbon is being avoided each year and we're investing in new renewables so burnadette should be happy about that that we're we're building both utility scale and we're also looking to build local renewables within San Mateo County just last week we did a groundbreaking for a new solar project called the right solar project in reseed County it's a 200 megawatt solar project that will start delivering power to San Mateo County in December of next year and then the other the other options good thing about what we do is that we put together local programs to benefit the community were we're governed by a Board of Directors that consists of a council member from each of the 20 cities in San Mateo County plus two of the county supervisors and each of those cities had to vote as to whether or not they wanted to be part of Peninsula clean energy there was unanimous votes in favor every city and the county they all had unanimous yes votes to become a part of Peninsula clean energy so there's a lot of support within the county for what we're doing and we just started a TV promotion program because what our main mission is to reduce greenhouse gas emissions we've we're taking care of that on the electricity side transportation actually is the biggest contributor of greenhouse gas emissions in San Mateo County it's about 61 percent the emissions come from transportation so if we can get people out of their gas gasoline-powered cars and into electric vehicles using batteries that who knows maybe they're LG batteries or whatever huh I'm sure they are yeah okay yes I think you said the volts were friends of your battery that using our clean electricity then we do a lot to continue to reduce GHG emissions one of our we we have to well we have a lot of a lot of goals but one of our key goals is to be a hundred percent renewable by 2025 and in order to do that we're going to need a lot of battery storage not only do we want to be a hundred percent renewable we want to be a hundred percent renewable on a time coincident basis so we want to manage to have our supply and our demand for every hour of every day be served by renewable energy and match that perfectly and using distributed energy is going to be one of those one of the tools that we will need to employ to do that using batteries and figuring out how to employ battery storage will be a lot of it and in fact I'll use this time to let you know that we are hiring for a distributed energy resources manager so if you're know someone who's interested in that to help us to deploy distributed resources within San Mateo County please go to our website peninsula clean energy comm and look for joining our team so if you haven't heard of community choice energy its rapid expanding across California the the areas of dark green are where the programs have launched already and there's actually 19 Community Choice energy programs that have that are launching there are a number that are looking at it and continuing to evaluate it and the prediction is that I think by next year about 40% of PG&E load will be served by Community Choice energy programs and maybe by 2025 about 80 percent of California's load will be served by Community Choice energy programs so we're very much interested in innovation and trying to move the needle to really be that we're not a utility but that energy provider of the future so is there a micro grid in your future we believe there's going to be a lot of those so thank you [Applause] okay well good it seems like it's unanimous there is going to be a micro greener in in everybody's future and we're gonna need software and a lot of batteries for it so that's that's encouraging okay now we're good we're gonna do the QA so there's just some pictures over there my panelists can kind of scooch up to the table over there we've got two microphones and I've got a few questions just to kind of get the ball rolling and and there's some of them are directed at respect to panelist you'll know what questions for you and we'll just kind of start from left to the right first big question specifically what policies do we need to accelerate the deployment of behind the meter micro grids and reduce costs Bernadette and you are great it's great questions billion dollar question where the policies we need to continue geez we dis is very mentioned earlier various policy opportunities and challenges in California with their relations to sturdy resource markets I wanna meet besides even though we'd be named ourselves a solar storm Association a few many different iterations of a name with smarts and sustainable by the end of that saying it's open source software and brains and opportunities there's technologies basically so been very near-term [Music] and then as part of a sharing economy that right to self generate that we've been benefiting from there's almost a million of us in California that ourself generators that is actually not sacred in any kind of state statute or any kind of regulation it absolutely can be taken away and some of our unfortunately municipal utilities and California have done just that so we need to fight for that that's going to take place at maybe in legislation we're hoping this year but it's also going to take place about Public Utilities Commission as they debate another round of net metering a policy is to create what is that value that you get as a consumer for the electrons you put back on the grid that value whatever that number is of the PUC equally is going to absolutely either make or break your ability to invest in a solar in a storage system with a smart inverter and whether or not it pencils out so that is kind of a policy priority number one packaged up in my mind as the right to self generate and self store and participate in the clean energy future second to that is reducing soft costs senators Marian mentioned that earlier this is an ongoing issue for us in California is a major part of the cost of going clean and we're going to need to keep at it our local municipal building offices some are better than others and making getting a permit simple and some of them are better than others at just understanding energy storage and lots of whole new technology we're trying to get our building officials and departments to enter the 21st century by doing permanent online and other reduce those costs on top of that we have problems with interconnection and utilities so especially on the commercial side utilities are really to our customers being able to turn on and Electrify that solar storage system of a timely manner believe it or not some of our large industrial commercial custom years so those are top three right now as we implement also this incentive program that we've just got passed have a question who here wants to guess a very important person who has a microgrid and his wife's vacation retirement one has to guess a hotel but exactly so as he decides that villains a lot as he rides off into the sunset Hammond and Gus Brown they are going to go home to a beautifully powered with a solar and and a huge battery data storage system there including to bear those are my top three top of my mind policies but you know ultimately the mealy wonky stuff that the or good love is all about providing that incentive for consumers to share their electrons across property lines so we do get to that aggregated again shared energy future right now there's no market for that so it is futuristic not only in terms of deployment but there is no market for it and that is one of the other huge issues that we are tackling on behalf of this industry at the public utility and as you might imagine the utilities are not quite there then what step with us so it's a battle to get there at the end of the day we will prevail you know if you read these IPCC reports you might get them to be depressed I think these presentations to me illustrate technology will take off so fast if we get out of it right so god that's what we have to do I was saying if you guys that I'm jumping we need to actually press our elected officials to make sure that they are clean us the we got one backup and she could I jump in on that yeah so brennidon talked a little bit about the utilities and the difficulties with interconnection they want to also add that as a non investor owned utility entity like ours wanting to do innovative projects that may provide support to the grid PG&E owns that grid and right now there's no way for us to be mana to monetize any benefits that we might be able to provide to the grid by the projects that we do so that's that's the other thing that needs to change on the policy side is that we if you're not the utility but you're doing something that supports the grid and allows them to say you know delay some other kind of upgrade that they're doing then we should be compensated for that and that mechanism needs to be to be employed so that we can do that and from the technical side one very important regulation that in my view is lacking in a so even solar systems today there are a big share of the of the grid production and we do not have enough certification and regulation around protecting these systems cyber protection physical protection this is something that someone can very easily disrupt the grid in a big way and there is not enough today Protection and regulation especially if you want to move forward to VP PS and things like that but even today there's not enough protection and regulation which can actually fairly easily be devised on how we do do we protect our day that is also something that is missing from the protective zone bill that really do a great job in terms of what's happening locally at state but just as if even the federal level I know this is a little bit more towards the front the meter and large behind Ameena systems but with FERC or two 8:41 which really encourages or mandates the regional transmission operators in the ISO s2 to give batteries like if storage systems equal standing versus other forms other technologies that provide services to the grid and it's the first time that the the audios nice those have been mandated mandated to treat storage that way that was a great breakthrough but the devil is always in the details because storage is such a different animal it's much more challenging to determine how in fact you put the value against storage because it's a generator and it's it's allowed and and what what rates apply when it's developing so if there's one wish list that we provide that the federal level would be some way to expedite the way which forego a 41 could be implemented because that would help not just fun to me they're also behind in the systems right security is a big issue there's there's kind of bizarre Byzantine rules that apply to who can send power over wires and and I kind of ran into this in our in our office in Campbell there's 10 companies in this unit in this big building each of which has 10 meters now we have solar and batteries on two of the units I can't send power from unit k to unit J between those two meters that that's kind of restricted that's only the purview of the utility so so what are some of the other limiting factors to trading energies between micro grids will blockchain help how can we do this if we can't use the utilities wires well there's no reason why we can't use the utility's wire I think that's a policy problem not an engineering or a physical problem I think the probably the most important policy we could pass but I'm not putting it on my to-do list just yet because I don't think I can pass it but is basically breaking up you know California took on deregulation 1997 we didn't really deregulate right we still basically have one utility per region the CCA's offer something entirely new but other than that it's a complete monopoly and it's almost entirely vertically integrated we should actually break up generation from transmission from distribution and actually put a third party in charge we do so with the transmission wholesale level with the California Independent System Operator but at the distribution level it's all one animal running the show and they don't always have I think the best interest in mind in terms of the evolution of these changes so we should set up a distribution system operator as a single most powerful policy to get what you're getting at but not this year okay so we're talking about these policies what are the attitudes of incumbent utilities towards the growth of this behind the meter solar and storage in micro grades how are they reacting we can be candid here that's almost impossible questions so succinctly because you talk to ten utilities or get 10 different answers but let me try any positive and we talk to you till he's worth inside California outside California and utilities are risk averse obviously they're paid to keep the lights on and not take to a technical risk but they do recognize the technology storage and integrate it with PV has more to offer and just a one example just to to show how it's happening I won't mention the utility but it's only East Coast well in the West but they are really seeing the way which the residential storage in particular technologies have moved forward and they will be deploying in very early 2019 initial pilot system but they plan to scale up to thousands of units but they didn't see but a huge potential benefit on the distribution system but by owning the assets and giving me the homeowner they have to host some sort of credit on their electric car but the authority has got the first call on how those batteries are charged and dispatched and they've done a face it's just very much similar to what law was talking about through the VPP that's exactly the system but I think your children's now started to see that customer cited storage and they're focused on residential could be C and I behind to be a commercial industrial but they can see huge potential advantage by aggregating these assets and deploying them as a fleet so I think that although he tilts are being swelled to come to market I think the growing realization of the benefits the distribution system that these assets to provide so I can I think I can bring a little bit of a global view so some of it sells in ten countries today my commute is is long not just to California to all of our offices and I think that the message that we should send to utilities and utilities are getting is that resistance is futile you see that over time the more mature distributed generation is utilities are adopting so you can see places around the world Germany is one people's an example but not only Germany well there is much more deregulation and not only that there are countries around the world where utilities are adopting solar in a big way the biggest installers the biggest advocates for solar in storage are the big UT not even the smaller and more agile utilities that need to differentiate themselves and they have already put together marketplace where you can trade energy and that is evolving around you up and it is evolving around Australia and yes there are countries in places around the world where utility comes to a nation and says we have one inspector for the entire nation you will wait five years for that inspector to come but the general message resistance is futile everyone will adopt a convention which time in addition Hill okay let's shift gears a little bit we're get bull get back to the questions a minute let's shift gears and based on the show of hands before we've had a lot of you were wondering once Peters company is able to ship enough batteries how can I add a battery to my existing solar power system are there any add-on systems that that somebody can buy today and and you know perhaps in Leo's terms how can I become assimilated in the VPP Borg so basically everyone can add a battery you can even have a battery if you don't have PV all you need is a small situation if you have one that is already managing your degree you can what is for GC couple your battery to the DC side of that inverter if it supports it and if you don't then you need another inverter to AC couple your battery and then even if you don't have PV you have backup you have the ability to time-of-use energy always permitting that and to pursue energy but AC carbon is a very popular option windows batteries Peter's working on I'll just add that the eight hundred million dollars in incentive funds just to reiterate that those are available whether or not you have it paired with the solar system the federal tax credit is a little different but you could get these the state tax credits or incentives with or without solar and you if you have a net meter 1.0 system and you want to protect that net metering you can add storage without knocking yourself into a different net metering structure make the economics not work out as well but yeah with time-of-use rates it should make a difference once those get rolled out and one of the things that that we're really interested in is using electric vehicles as our battery storage and as we're trying to match the supply to the demand in San Mateo County as a start if we can use once vehicle to grid technology gets there we'll have all of this mobile storage wandering around to the county and if we can harness that to conquer the duck curve or whatever the future problems are going to be I think that a really exciting place to go yourself we're gonna do that software can do anything so I do bouncing it'll actually listen okay so there's a lot we'll get to audience questions in about 15 minutes there's there's a lot going on in terms of tariffs and international manufacturing how are the current and possibly future tariffs and the US manufacturing constraints affecting the growth of micro grits and it specifically solar panels inverters and batteries is it having an impact now as far as concerned touchwood it's not having any impact to date we we are we are currently shipping most of our batteries into North American market from our facilities in China and so we're monitoring the tariff situation very closely when the first round of tax came in earlier on this year we would be concerned with lithium batteries were on the tariff list but they were just primary cells so they sort of once used in these disposable batteries the second T cells subject to recharge themselves have not been covered and work well so rather optimistically hoping they won't be because I have such a negative impact on your water business let alone our own business but it's something what's happened very closely the fact that we have a manufacturing plant in Holland in Michigan puts us in slight advantageous position have some flexibility but the impact of tax would be would be enormous because the percentage increasing costs the the industry is called the solo coaster because time keeps changing and race keeps changing and custom grade skips keeps changing it has it has a big effect eventually on the industry the increase of prices of solar modules had an effect on debate and solar systems are being installed and even now and there are weights on modules and even in vessels coming from China prices in the market go up when prices go up the rate of installation changes that is without a doubt the trend is still grow which is for the future this is a pattern about the future for for the future as long as the trend each day is gold and the prices keep dropping down and eventually [Music] all the time but month effect what that effect is a big thing I'll just add one of the interesting things about the the tariffs is what they did to non PV module manufacturing jobs in California and other elsewhere in the United States so a lot of the balance of system components the racking the other components that go into an solar system are actually made here in the United States and when we increase the price of a steel or aluminium or just increase the costs of the modules themselves it has a downward effect on market demand and growth and therefore it actually has heard manufacturing jobs here in the US so that's been a sort of this on you know the side side consequence that said I always want to point out given that my job is to keep the California market strong that decisions made by the brown administration around net metering around rate structures other issues will have slowed our market down far more than any Trump administration tariff decision so ultimately our market is still local and the decisions made by california regulators ultimately are far more impactful that's not to say that i'm not trying to like create a race between brown you can hurt us more don't get me wrong but but just to remind ourselves that it's our local state officials that actually determine the viability in the fate of this market what we're seeing is that the terrorists are going to slow down the building of new projects so right now if a company already has modules available and they can build a new project especially in the utility scale projects and they already have the modules that they bought before the tariffs were imposed that they can hold their price otherwise when we're going out there and we're putting out RFPs for new generation you know hundreds of megawatts of generation we're seeing that the start dates for those projects are farther out into the future because no so they'll won't start until 2023 when the tariffs have started going down so it's just going to slow down the industry and I think you know if you look at history and the history of tariffs and do they ever accomplish what someone thinks they're gonna do the answer's no these policy things are so challenging well talking about policies perhaps the most important policy we have in the solar industry and the storage industry is net metering started with net metering 1 then net metering two kalsa worked from a calcia council worked really hard on that now we're looking at a fight for net metering 3 how would possible significant changes in net metering 3 affect the growth of this microwave behind the meter industry pass it to the left it is absolutely the foundation I know no matter what so if you wanted to completely island yourself and have Exuma every California ratepayer is going to have solar and storage and they're going to just be an island unto themselves and never share electrons net metering wouldn't really matter we would just over build our systems we would have huge batteries huge panels on the roof and and we just wouldn't matter what net metering does is it enables us to more efficiently deploy renewable energy and reduce the cost of integrating those renewable electrons onto our grid and it's beneficial for all of us but it's absolutely the single most important foundational policy for the deployment of solar and storage and micro grids however you wanted to find them so the next governor is going to preside over this decision and it's it's just I can't underscore I mean the great structures are important but ultimately rates are probably going to keep going up even if the time periods changed so storage allows us to be agile and responding to that but what that value is and how you interact as a consumer with with the grid and how you get fair treatment for your investment your miniature power plan is we could really stop this market dead in its tracks with the wrong decision okay so shifting from policy to technology how can technology or equipment innovations both on the hardware the software side lower the installation labor and other soft costs both batteries and inverters well from a budget respect Ren keep it brief as well as so much could be done I mentioned before that not only is technology improving the energy density and therefore you need fewer battery racks off your containers your enclosures which always tends to reduce the installation cost but as especially in the behind me this commercial industrial segment the fact there are most standard systems are preassembled in the factory the factory tested drop shifted sites so that's two benefits that it tries to maintain a higher quality installed system if you're installing distributed systems different parts the country more remote locations the quality of installation will vary quite a bit and then you also reducing costs because having Labor doing the the factory assembly and possibly not doing the assembly in the field can be a bit across theta so this there's number different ways I wouldn't say there's anything it's extraordinary in terms of a cost reduction move but anywho anyway and save so two three four five percent it always helps to do to improve the economics of any installation so of course technology is bringing a cost reduction technology is bringing intensity and intensity batteries higher levels of production with modules more efficient inverters this is all things that technology is bringing we also see that the more systems are connected in monotone in control then interconnection becomes easier because eventually it's very different from someone connecting the power plant somewhere on degree there now you need to verify physically how the interaction in the the girls in terms of stability and when you have something which is stabilized in motor control mode monitor so the ease there can be an ease up in the feasibility studies and analyses and in the connection testing which will take a long time so technology is also helping in that so interesting just you know my recollection of the improvement in technology the the first battery storage and herder that we put in we do we do tests at our office and so I was installing this over the weekend but I couldn't lift the thing myself and we'd like 80 pounds hanging on the wall so I got assistance from my wife so the two of us managed to kind of hang the thing on the wall but now the new inverters are small enough so that I can just do something else and my wife wouldn't mount the inverter on the wall it's just a lot easier I mean they've got they've gotten that much smaller and also you know you mentioned the thing about monitoring the biggest customer service issue that I've had for almost 20 years has been monitoring and the cellular communications it's just plug and play just turn the thing on put the the SIM card in there and they work so that's a really big improvement that we've seen in inverters companies like Solar Age for enabling our business can't be underestimated before to the batteries a bit of a dumb animal it's it's they need to be told what to do and our interface with the outside world through the inverted control system so what yours company is doing is critical for your success so you know we're very very closely connected there okay well I had a list of kind of sample questions here we've got some time for audience questions sir let's get the microphones here another one okay coming down we got two okay so a lot of this really all comes down to economics and so when is the grid gonna be really smart where there's instantaneous price so that if I just I could buy a storage unit and buy low and sell high when when is the grid gonna have a signal out there here's the current price of electricity we've been thinking about that for a long time make basically real-time pricing and for some large commercial customers I think they are able to see what the wholesale prices are and to manage their their usage that way but the problem is that the retail prices and the wholesale prices don't line up at all so we need that in order to really have the grid be efficient so I don't know I've been in this business for thirty years and we've been talking about it for thirty years now we have Amazon so for those really paying attention part of our pitch for this ESPE 700 again getting back to this it's a it's sort of a dumb policy right we're just trying to deploy a bunch of batteries with it that's all but ultimately we see it as a bridge to when we will have true real-time pricing we estimate this is going to take another four years maybe of PUC policymaking to get to any kind of real price so at the earliest for a couple of years away okay great I've got a question back here Dale yeah I've got I've got some technology questions to partner one for Peter than one for Leo Peter from the battery technology you've spent we said a quarter of a million dollars over the past few years and over the history there's been manganese and phosphate and flow batteries have you looked at anything else that will help us get out of the sort of flattish costs on the lithium ion and then for lis or Barry tells me that right now we can get an invertible we can take two of these ten kilowatt hour things okay how soon can I see one that can handle five or 50 kilowatt hours okay so the first question love battery should roughly straightforward well pretty well the few companies that we actually manufacture arranged differently in chemistry so I am phosphate collecting titanate most of the batteries we do today on nickel cobalt manganese MCM well the big advantages of NCM is the much higher volumetric density and so it's good for automotive and exceptionally good for behind the meter systems residential lc9 but for sure we really we know there's going to be a world beyond lithium lithium batteries oh by the way there's a big misconception guides to materials availability lithium is in not in short supply the the issues for our batteries today tends to be the cost of cobalt because it comes from the limited number parts of the world so we and uh some of competitors doing all we can to reduce the cobalt content so I still think that with today's lithium chemistry even with MCM there's there's a lot of life ahead of it it's not it's not gonna be term Alana Ted for the next five ten years it's got a water future ahead of it and as lobbying provements can be made by mixing the ratios of nickel cobalt manganese but beyond yes we do a lot of research that 250 million dollars that you spend annual in R&D it's looking to how can we improve the chemistry's of tomorrow but I literally you're ahead two years ahead but also what would be the chemistry's in twenty years time you mention flow batteries it's something what kind of interesting as well there's nothing that we make commercially available but we think there will be a time when that we need for storage asset that can deliver 12 plus hours of storage actually I've worked for flow battery company in the past it wasn't very successful chemistry but there's a lot potential level flow batteries but the interesting thing is so in North America there's not really much of a market demand you know we've deployed lithium batteries that meet an eight-hour need on the East Coast and that was economically viable but we still not seen many applications that have warned that they deployment is something like a flow so for the folder for the question how soon can you have 50 kilowatts of power a lot of power so yes today our system for example can handle two of these there is no technological limits limiting for two two is a product decision and not a technological issue okay so not many people opt for two batteries and even much less than that opt for more because of the paths so we made the product decision not to support mold important to there's nothing in the technology that supporting five whole things just a matter of synchronizing the bus and in having enough communication ports and so it's a public decision and not a technology decision but batteries are getting bigger and bigger also so 50 kilowatts I think also in battery density and with three and not too is just around the corner if someone needs it and willing to pay for it okay questions we've got a question over here on the left please this is getting back a bit to the economics of the thing I've always been a fan of trying to figure out the economic cost and my metric now is dollars per kilowatt hour transferred because the batteries like a tire it wears out and it depends on how you use it so just talking about kilowatts or kilowatt hours doesn't help you in the economic value and I wondered what you think about that yeah way to start the problem is there's as many different disciples as you can probably list and that's it's interesting that that question comes up occasionally when we talk to some customers they want to know what dollars per kilowatt hour is in particular applications but it's really hard for us to come up with that and so that's why we always is a matter of course we just start with the dollars but kill it now for the the basic rack system before degradation because the way that battery could be used is infinite it's really challenging I understand exactly where you're coming from and Stan way to ask a question like that you really want to know what the cost would be for your particular use of using battery but if I had 100 companies in here you'd probably find those about 98 different ways the battery is going to be used yeah so well simple very quick answer that is it results in having to do a quick analysis to see what the size of the battery is to meet the need that you have and that's the same whether it's behind the minute commercial industrial or whether it's in front the minute system the only reason the only market segment where it's easier to address that is using residential because it's size based on the battery being cycled once a day 365 days a year unfortunately so actually you've asked something that is also missing on the regulation side and in the very very early days of Solomon Vern tells everybody had their own way of calculating efficiency long long long time ago so I can have the best peak efficiency and someone can have the overall something efficiency or a max power efficiency and then came the hill in California the CC waited efficiency which basically took some weighting based on the amount of Sun hours that they are a day to wait the inverter efficiency and that became the wall and that became certified means of measuring inverter efficiency we are lacking today in the battery world some kind of in a great measure of how much how many megawatt hours can a battery dish out in the course of its lifetime some countries have tried the defining something like 80% capacity developing 10 years on an average cycle but what is an avid cyclist the temperature the problem that makes it a little more complicated than the innovative efficiency of an inverter is that it really is multi parameters that every one of them have a significant impact the depth of the cycle the number of the cycle the rate of the cyclist the temperature of the battery these are at least some of the of the of the factors I I can think of I still believe that some agreement per industry or per segment needs to happen because trust me they are very very different batteries out there they are all named rated the same I'm just gonna joke that so I Drive a Chevy bolt which I was joke is basically an LG battery on wheels and there's all of this technology and then there's consumer behavior and I gotta tell you I can't put a price on the joy of putting it on sport I don't care if this learn at my battery but I can tell you what you do is you put a 10 year old and a 7 year old in the backseat and they try to get the display and make you put the display that gives you your driving technique score and that will rein me in your score 5 so when people ask us that question when were selling the batteries LG does a pretty good job of specifying the warranty on this battery so it lasts for 10 years and they guarantee that I'll have a twenty seven point four megawatt hours of capacity over those 10 years which is basically cycling almost every day for a 10-year period y'all mentioned a good point as well about the the battery being rated for the energy throughput that's that question comes up quite a bit as well and you mentioned theirs as well they vary but for something to say behind the munich like emotion of dusty old larger system or from tamiya system that question gets asked a lot with goes to how we relate the warranty to the battery but the problem is when you get is something like a larger battery how its operated can vary tremendously so for example i have two batteries that have the same energy throughput over 10 15 years but the degradation rates can vary a lot if one battery is held in a high state the charge versus a medium or low state of charge or if it if it charges and then immediately discharges so it's it'll be doing at a high temperature while the rest period between charge of the start there are some effect that like the part mentioned several more but those are the key differentiators that could determine very different degradation rates and therefore different sizes of battery for the same application ok great any more questions so one way in the back and then you sir in the middle who do the back first hi this one's probably mostly for mr. Gibson but obviously off and jump in you said something about a market for 8 to 12 hour application or maybe the lack of a market there but mention something on the East Coast so I'm just really curious what is a market for at 8 to 12 hour energy store yeah so just very simply um I can't mention too many names to the project I'm officially being announced all the one project isn't filled commercial operation the other one is will be in commercial operation in December but there are two projects in New York State in the provider capacity and the provider capacity in an area of the grid not very far away from New York City which has severe capacity constraints in certain times yeah and that's why they need the 8 hours of capacity each one those projects is rated 5 megawatts for head ass so that's why it's an eight-hour system we're blessed eight to 12 what I was referring to there is to go beyond 8 hours I was just picking 12 just randomly but certainly the longer the duration the more expensive lithium-ion battery is because it's kilowatt hours Omega what else and so lithium can really struggle to be competitive if you're looking at 12 hours or more duration to be supportive and that's why I think there's an opportunity for 12 athletes but what in the five years of being in the storage business world you cannot only call one project which also was on the East Coast around New York where they were looking for 12 hours solution and they eventually decided not to go with batteries in the went with standby customers instead okay we got time for two more questions we'll keep them kind of brief sir over there in the middle one general comment I'd make is that to look to Porto Rico the other electric system was completely demolished and they're rebuilding it with micro grids and and solar in a big way and then the second comment is the question for Jan is this new exit fee that PUC granted going to effect the CCA regime yes so just to give a little background for for any departing load customer when their direct access customer and Community Choice Energy Pro customer with the idea is that the utilities purchased power or made investments in in contracts for power for all these customers and now that they've all left and become CCA customers the utility needs to dispose of that power that they contracted for and because prices right now in the market are relatively low they're disposing of the power and at a loss so they may be paid $100 per megawatt hour for something and now they're only getting $30 per megawatt hours so there's an exit fee that's charged to all of the CCA customers so that the customers who stayed with the utility are any different and it's called the power charge and difference adjustment over the last year there's been a large proceeding of the Public Utilities Commission to discuss that exit fee and the CCA is provided evidence of what we thought would be a fair value the utilities provided evidence of what they thought was a fair value and the ruling that came out last week was heavily in the utilities favor we believe that it's totally wrong that in fact the CCA customers will now be definitely supporting the bundled customers and so yeah it's it's a problem because the way we price our electricity is we take we we set our prices based on util on PG these rates so if PG these residential rate is is whatever it is we will take five percent off of that rate in order to provide the savings and then we'll also subtract off the PCIA rate so that what our customers are paying to us when they pay our rate plus the PCA a varies they are still five percent below PG so when that PCIA increases which it is projected to increase substantially the the amount that we can collect now is squeezed and it puts more pressure on us peninsula clean energy is in very good financial shape we purposely didn't launch any additional programs or anything until we made sure we were financially strong but it could limit the amount of other programs that were able to offer or the rate at which we're going to do that so you will see us in the legislature you will see us at the Public Utilities Commission we are going to fight this so so that it is fair for our electric customers okay we had one more question over here on the left please and said this is relates to what you just said Jan but also something Bernadette you mentioned you said the cost of electricity is gonna keep going up you think right is that because of the PCIA because the more renewable generation there is and if everyone is trying to get to 100% renewable and it's solar the cost is just going to keep going down so is it because and if 80 percent of Californians are expected to shift the CCA's by 2025 is it because the BCAA charge that you expect the prices to keep going the retail prices to keep going up there's there's the reason that prices are going to go up in our opinion is because of the distribution of transmission charges so if you look at your bill there's a generation charge which isn't the CCA's charge what's the PCIA and then there's the electric delivery and then there's a whole bunch of other non-white possible charges for nuclear decommissioning bla bla bla bla bla but really if you look at the delivery charges which is the transmission and distribution system those are going up considerably the bill that was just passed and that might be a little comment on this as well the the wildfire bill that was passed basically is going to charge the ratepayers for any negligence that PG&E incurred because of all the fire so people that were killed so they're they're going to be stalking all the shareholders will bear a little bit of it but most of it will be on the ratepayers so yeah it's it's I think it's difficult because the utilities do make their rate of return on their capital infrastructure so the the poles and wires and other things that they put in the ground is what they earn their rate of return on and the way they make their money so and with more distributed generation you know there's a concern that well that should reduce the cost of the distribution system and there should be mechanisms for entities like ours and others to be able to be compensated for the investments that the utilities don't have to make but that goes against their profit motive so there's some some difficulties there were some conflicts the way that the market is set up I'm sure has almost 9:30 we were at a PUC event last week it was myself and some of Jan's colleagues from the CCA and our panel was called the disruptors panel and you know that's just lovingly undone lovingly how the PUC thinks of us I suppose it's a little bit pessimistic of me to say rates are gonna continue to go up because if we were able to and when we are able to actually reverse the direction and truly diversify with how we have we do things prices will come down and energy will become more affordable and cheaper but until then it's going to keep going up the utilities have never managed to do anything cheaper our technologies and our industry has always done things cheaper here here so at some point those worlds are kind of clash and collide and the consumer will benefit but until then I think you can kind of Bank on rates going up to a question the fuse is late again many countries around the world have active regulation what is called non buyer alternatives basically when you Timothy wants to invest in infrastructure in in transmission they need to publish the cost of that project and logic behind that project so we build a substation for this area because they expected the growth in energy demand in that area will be thus in five years and companies are allowed to offer non wire alternatives VPP is local generation whatever and if they have a viable project that is thus cheaper then the utility option the utility is mandated to allow that project that's the world for example in most states in a straining PPP's and many other things soloist is deployed as a non wire alternative funded by the same budget that was supposed to fund government budget that was supposed to fund the utility drill wire I'll tell you whatever we see around the world eventually spreads on sometimes it takes five years something takes 50 years but all right very good well a lot of times that kind of thing starts here in California and we've been benefiting from that and I'm really really happy to have our panel of disruptors here thank you very much

Channel: MIT Club of Northern California

Views: 3,331

Rating: 4.8933334 out of 5

Keywords: energy, electricity, pv, solar, photovoltaic, microgrid, storage, battery, batteries, ev, ghg, greenhouse, MIT, MITCNC, policy, power, grid

Id: yIG0KyWjI5w

Length: 116min 28sec (6988 seconds)

Published: Wed Oct 17 2018