Incentives Program Monitoring Question [RE-wrenches]

[Matt Lafferty]

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Wrenches,

Allan S asked:

> How can performance be monitored for battery-based grid-tied systems?  
> How can performance be monitored for off-grid systems?

Allan,

First of all, the term "performance" must be clearly defined and/or changed
to what I believe is a more appropriate term, "production".  I have
personally been guilty of using the two terms interchangeably when
discussing this topic.  I still do if I'm not paying close attention... I
apologize for any confusion I may have caused by this inexcusable abuse of
the english language and will try to do better in the future.

It seems as though the term "performance" has become the most widely used of
the two.  I would discourage its continued use in this context for the
following primary reason:  The term "performance" is easily construed to
imply that multiple factors relating to the effective operational
characteristics of an RE system should be monitored.  Such factors could
include realtime data capture of things like: Insolation at the POA, Ambient
Temp, Module / Cell Temp, DC & AC Power, DC & AC Energy, Wind Speed, Etc.
These are all things that affect the "performance" of a PV system.  In order
to collect this data, a DAS system would be required at each site.
Collection of the data would also be required.  Although this is nice stuff
to have from a "techie" perspective, it would be a HUGE step backward in the
potential deployment of a new structure for incentives.  Don't ever forget
that as long as we're dealing with grid-connected PV, PV actually stands for
"Psycho-Voltaic"....    

Based upon previous threads here, and the knowledge that this is related to
the development and (hopefully) deployment of a Production Based Incentive
(PBI) structure in New Mexico, it seems to me that the simple definition
would be: 

Production = The effective useful ACkWH produced from qualified RE sources.
(The addition of Time Correlated Factors such as Power and Energy data could
also be included under appropriate rate structures at a future date.  Let's
not make it too complicated for the Utilities, Regulators, and
Installers.... Yet!).

The second thing that should be noted is that it is not specifically the
issue of whether or not a system is battery-based that causes difficulty
here.  It is the fact that battery-based platforms are capable of having
Gennies connected to them... Non-RE Generators... Hopefully whatever comes
out of this keyboard-banging session will be helpful to all in at least
understanding just one of the issues we have to deal with when discussing
Net-Metering and Incentives... 

Before the smoke starts rising from my keyboard, I want to make sure that a
fundamental concept is CLEARLY understood by all readers: Whether or not you
believe in the concept of Renewable Energy Credits (REC's), the New Mexico
(and other states, too) RPS statute says that REC's from PV are worth 3 Wind
REC's.  It also stipulates a certain percentage of the RPS must be met by
PV.  The vehicle by which the Utilities would BUY the REC's is via paying
for an incentive program for Customer-Owned PV systems.  The transfer of
REC's to the Utility would be effective for some as-yet undetermined period
of time.  There will be some "non-bypassable" charges associated with such a
program, which means that the Utility is obligated to pay up to a certain
amount "per kWH" without being able to recover the "investment" though a
rate increase.  **** Program costs that exceed this value are directly
recoverable through a rate increase!!!!! **** 

All this makes the Utility Beancounters and Politicos buzz around the issue
like a bunch of flies around a fresh cow patty on a warm spring afternoon...
Which just happens to coincide with some of our Peak Production times, but
that's not the issue here.... Basically, these PV REC's are double-edged
from a Utility perspective... Remember, they are in this FOR PROFIT, not
because "Green Feels Good"!  They are going to default to looking for ways
to keep their shareholders happy at all costs!  It all comes down to "the
Beans"... "How much do the Beans cost?"... Let's run a simple balance sheet
on the scenario...

On one hand they are mandated to buy them, on the other hand, nobody really
knows what they are worth today, five years from now, ten years, etc.  From
an O&M perspective, the Utility won't have direct, real-time control over
the systems and all this goes in the LIABILITY column.  From an Accounting
perspective, there will be the "normal" Billing function as well as an
Incentive Payment function as well as a separately calculated Payment for
Non-RE generation on battery-based systems.  These are are all completely
separate from each other within the Accounting Department... This, combined
with the unknown valuation of REC's places all this in the LIABILITY column
as well.  Waaaaaay deep in the LIABILITY column! 

In the ASSET column is... Well, some "good PR" and... Well... Hmmmm.... Not
much besides the fact that they can recover their "recoverable costs"
through a rate increase... Let's see how that works... (The following is a
transcript from a "fly on the wall" recording of an internal strategy
meeting... Just kidding!) "This sounds like we could justify some "butts in
chairs" and some new department heads and just eat up the "non-bypassable"
costs in-house by taking some staff that we already have but can't fire and
don't know what to do with ("Dead Weight" - Example: CEC ER Program), pay
out "whatever the Greenies say they want", and get it back with a
justifiable profit via that rate increase we were promised by the Governor.
When the rate increase hits, we blame PV and the public is outraged and PV
goes away forever... Yeah!  That's the ticket!  OK, everybody know what to
do now?  Hup 1, Hup 37, Hike!"

The final terms of all this are being hammered out through a collective Task
Force arrangement which is going on right now.  Word from the Front is that
the Utilities have "appeared" to be acting in a supportive and "honest"
manner... That's encouraging, but I'm a cynic... Can ya tell?  

We have discussed on this list in the past various methods for "simplified"
recording of the ACkWH production in a battery-based grid-connected
application.  I think there was actually a relative consensus on the issue
after a time.  Yahoo!  :-)   Bob-O's response to Allan's post pretty
comprehensively sums it up:

>From Bob-O:
>  For the grid-tie, a detented analog or two register digital KW/H
>  meter on the input/sell back wire(s) will eliminate recording of 
>  power bought from the grid and a second analog or single register 
>  meter on the inverter output to the loads read in conjunction with 
>  your "regular" utility meter should do it, ASSUMING that the whole 
>  house is sourced from the inverters. That is mostly not the case, as 
>  you know.

Several key Technical and, sad to say, Poli-Cultural hurdles exist using
this method in "the real world of Utilities, Incentives, and REC's".
Bob-O's message alludes to these when he says, "ASSUMING that the whole
house is sourced from the inverters. That is mostly not the case, as you
know."  He did not elaborate (I'm guessing for reasons of brevity and
possibly so "the cat would stay in the bag") on them however.  If you accept
the premise of Incentives being part of the RE future, you will also have to
accept that we must meter the production of the systems.  We simply won't be
able to continue "having our cake and eating it too" in the future.  The
future is now, if we are willing to accept financial incentives.  Period.
For this reason, I believe that we must understand the obstacles in order to
be fully prepared to overcome them.  Trust me on this: "They" are already
aware of them all, and will NOT "show all their cards at once".  We are
going to have to be prepared to "play an honest game of poker" even if they
don't.... Plain and simple.  (Remember the old sayings about "knowing your
enemy" and "keeping your enemies close"?  I'm not trying to insinuate that
"they" = "enemies" and don't think we should adopt that posture in any
"public" way... For the record.) 

Short list of issues.... Short versions...(I apologize in advance if these
"sound like" I'm somehow taking a "their side" approach.  Please understand
that my intent is only to "show you their cards" as I know them to be...)

1) Utilities don't want to and/or can't do simple math within their current
billing structures... The concept of "subtracting one meter reading from
another" somehow causes widespread blackouts.... Which is OK in this case
because we are talking about battery-based systems anyway... But wait before
you stop there... Read the rest of the list, particularly #5 & 6...
Remember, the "meter" is a Utility's Cash Register... They take it VERY
seriously.  More on that in some future blog somewhere...

2) Single vs. Stacked inverter systems requires too many "metering
standards" to be developed, adopted, distributed, and deployed... (Metering
standards are the "rules" a utility makes up telling where meter sockets
must be installed and how they are to be wired.)  Installers and Customers
need to be made aware of "the right way to do it" under various system
configurations.  Remember how many ideas and thoughts related to metering
just a single battery-based application were tossed about on this list
before?  And we are the ones "who should know how they work"... Confusion
and frustration within the Utilities' Engineering, Metering, and Billing
divisions quickly leads them to a defacto "these stupid little PV systems
are too hard and too expensive to keep track of" conclusion.  One that their
lawyers immediately take to the PUC or PRC in the form of a request for a
rate increase or a revocation of the whole RE thing on a "Customer Owned"
basis altogether.  (The LAST thing we can allow, as long as these parties
continue to receive "hidden" subsidies, is for any rate increase to be
blamed on RE, Customer owned or otherwise, Net-Metered or not!!!!!  If they
are willing to forego their "hidden subsidies", resulting in retail rate
increases, then I believe we should EMBRACE it!  All of a sudden, the
"expense" of Customer Owned RE gets a big shot of "truth" on the scales of
comparative "cost" equality.)

3) The need for multiple meters to monitor production, incurs an actual cost
to the administering Agency or Utility.  We might be able to get a "free
pass" for the first one because we "feel good", but don't expect more than
one.  It is common for "meter charges" to be passed along to the Customer at
prices between $200 & $500 each for single-phase residential models.  Ouch!
How much "free" electricity does a system have to generate to repay those
kinds of charges?

4) RE Generated power that is consumed by DC loads can't be metered by
Utilities using their "standard equipment".  We're just going to have to
accept that one if we are installing systems with DC loads... Don't forget:
The batteries are DC loads, too!  

5) Pay attention, here's the biggie "nobody wants to talk about"!  Non-RE
fueled gennies feeding into an inverter to "boost production".  Yep.  Bad
ju-ju.  Here's why... Net-Metering and, in this case a PBI, is fundamentally
based upon the premise that "Green" power in a DG application has a
significantly higher value "per kWH" than a traditionally generated and
distributed kWH.  This is called the "premium".  Under a PBI approach, a
customer would receive incentive payments that reflect this premium value.
Let's just use an example of $0.75 per kWH for discussion... A customer with
a gennie running could easily spin up their "production meter" in a short
period of time, intentionally or unintentionally.  The intent doesn't
matter.  The gennie is not RE fueled and its output should not be counted at
the premium valuation.  In addition, since it is not RE fueled, it does NOT
qualify for Net-Metering.  The Utilities have established "avoided cost"
values to determine the $/kWH they pay for Non-Net-Metered generation...
Generally in the $0.015-0.030/kWH range.  If this generation isn't metered
and "paid for" using the standard method, every single generator currently
supplying power to the grid WILL CRUSH RE by public execution due to "unfair
competition".  Assuming that these gennies can even get this teeny weeny
payment without having to comply with all the emissions regulations will
likely have to include some kind of "only for backup or emergency operation"
purposes.  Assuming that the times under which these gennies would be
operated is small, I think we can go there without too much opposition.
Here's what happens if the Non-RE Generation is not dealt with separately
and independently:  A customer spins up an extra 200kWH per month off the
gennie.  That's $150 just in premium payments.  How much fuel did the fuel
and maintenance cost?  Depends on lots of things, but some people would be
sure to think "this is one way to make some money"... Trust me!   At $0.15
per kWH, this is far less likely to happen intentionally... Here's the "dark
side".... Let's say that these types of things do happen, and they will...
Let's say that the Utilities and Traditional Generators realize this is
happening and keep quiet... For awhile.  Now let's say that they suddenly
"discover" this "problem"... Whoa!  Stop everything!  "We have to audit each
system and all payments made to date"... And the worst possible: "See, even
the 'Greenies' know that generating with petrol is better than RE and they
are stealing from the public!!!!"  This would be "leaked" to the legislators
and regulators and the PRESS, who will coin the phrase(s), "Greengate",
"Pvgate", "RE-gate", "Sungate", etc.  This is NOT a black eye we can allow
to happen... Anywhere.  (The premise of Net-Metering is allowed and intended
for RE sources only.  The Interconnection contracts are based in part on
this premise.  If we cripple either of those key pieces to the puzzle of
"playing on the grid", we will all be doing PV exclusively out in the woods
or go back to selling vinyl siding... Hey, Bob-O, want a bunch of new
neighbors?)

6) Off-Grid systems. For the purposes of "Short & Mid-Term $$$ value to the
public interest", these are actually the best applications, in my opinion.
Hold it!  Did "he" really say that?  Yes, "he" did!  Here's why: No
additional Transmission & Distribution (T&D) infrastructure installation
required, no additional T&D infrastructure to maintain, no "upfront
construction capitalization" which gets ammortized out over 15-30 years
which requires carrying another thingy on the books which keeps another
buron employed which costs the ratepayers more money, promotes self-reliance
and personal responsibility... Both of which we certainly need more of in
this land of pigs and sheep... Not that there's anything wrong with the
4-legged varieties of either but I don't think God intended for this many
2-legged ones... Back to RE... If Off-Grid systems are included in an
incentive program, at least a portion of their intrinsic value is reduced.
The primary reason for this is that any "program" of this nature requires
administration and monitoring for each project.  By default, most of these
systems will likely be relatively remote from the grid and require more
"man-hours per kWH" to monitor and maintain.  The Utilities and Regulators
will see these systems as liabilities from a "potential for abuse"
perspective... Fact!  (For comparison: In an urban setting, the Net &
Generation Meters will be read on a monthly basis... Just like normal.  In
the Off-Grid Remote settings, it is more likely that the Generation Meters
will only be read on an annual basis.  Twelve months is too long for a
Utility to be "away from their meter" in their perspective... Can you hear
the gennie running?)

So, what's the "answer" for metering battery-based systems?  It's a
combination of things and it's complicated.  

First and foremost, Utility billing departments MUST learn to do addition
and subtraction, not just multiplication (See #1 above).  Part of the
equation here is that they will have to set up their database systems to
link / associate multiple meters and the related readings to a single
account.  (SOP is that each meter represents an account... I've seen a whole
lot of crap go on related to this single issue, from the inside... If you've
got a sense of humor kind of like mine, the sheer absurdity of this is
enough to make you pee your pants with hysterical laughter!  If you've got a
sense of "common sense and justice" like mine, it is stupid enough to make
you want to leave the country, find a couple of palm trees about 3 meters
apart and hang a hammock between them!)

Second, grid-connected battery-based systems will require a minimum of three
meters per site with at least two having multiple register capability .
Essentially 4 meter readings per site.  No less.  Meter #1: Revenue Meter,
Dual Register with Register #1 reading Grid In and register #2 reading Out
to Grid; Meter #2: Inverter Output, Dual Register with Register #1 reading
Inverter Output and Register #2 reading Grid to DC Loads (battery charging
mostly); Meter #3: Generator Output/Inverter Input, Detented... This is
necessary whether or not a Gennie is part of the original system... It may
read Zero for its whole life but it will, and should, be required.  Get used
to it.  

"Utility Net-Metered Revenue Billing Math" goes like this:  Meter
#1/Register #1 plus Meter #2/Register #1 minus Meter #1/Register #2 = Total
Monthly Consumption (TMC).  TMC minus Meter #3 = Net-Metered Consumption
(NMC).  This becomes the effective monthly kWH that the "bill" is based
upon, subject to normal retail rate structure.

"PBI Payment Math" goes like this:  Meter #2/Register #1 minus Meter #3 x
PBI Premium = PBI Payment Value (Check to Customer)

"Non-RE Generation Payment Math" goes like this:  Meter #3 x Avoided
Cost/kWH = Non-RE Generation Payment Value.

Net Monthly Generation (NMG)  = Meter #2/Register #1 minus Meter #2/Register
#2 (The NMG is not currently slated for "payments".  It is nonetheless
crucial for determining Distributed Generation related data, which we will
be able to use in the future for proving other aspects of our value on a
technically acceptable basis.)   


OK, Off-Grid systems.  Simple Simon.  Only one Accounting Department
function is recommended by myself.  PBI Payment.  This system is not
Net-Metered or Interconnected so those factors fade away.  We don't want to
open Pandora's box of emission regulations, so we're NOT going to want to
try to get that little 2 cents per kWH stipend for gennie operation.  If we
look at it this way, it makes sense: The Off-Grid PV Customer is likely
going to do it regardless of incentives.  They want to live where they do,
as they do... Without government & regulatory interference as much as
possible.  If they could receive some form of incentive toward the purchase
of the qualified RE system, then that's a good thing on the surface, isn't
it?  The catch is that "now they've entered the system" by taking $$$ from
it.  Subject to regulatory stuff.  A Utility representative will be entering
their property at least once a year... Things they wouldn't have otherwise
had going on.  Some will surely elect NOT to accept these incentives, and
that is their choice.  My hat is off to them.  

Metering.  Two meters, both detented.  Meter #1: Inverter Output; Meter f#2:
Generator Output/Inverter Input.

PBI Payment Math: Meter #1 minus Meter #2 X PBI Premium = PBI Payment Value
(Check to Customer)

Did everybody get all that?  Double-check my logic & math, because no matter
how many times I've pencilled all this out, it still confuses me causing me
to be afraid of pushing "send"....
  
Ya'll Pray for Sun!

Matt Lafferty
Universal Energies Institute
mlafferty at universalenergies.com
(415) 252-0343
(916) 914-2247 Fax

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