The following is a transcript of the May 13, 2024, episode of Public Power Now. Learn more about subscribing to Public Power Now at Publicpower.org/Podcasts. Some quotes may have been edited for clarity.
Paul Ciampoli
Welcome to the latest episode of Public Power Now. I'm Paul Ciampoli, APPA’s News Director.
Our guests on this episode are Rory Jones, co-founder and managing partner at Lifeshift Energy, and Jason Viadero, Director of Engineering and Generation Assets at Massachusetts Municipal Wholesale Electric Company, a joint action agency.
Rory and Jason are here to discuss the recent announcement of a unique program under which MMWEC has selected Lightshift as its exclusive partner to deploy the state's first jointly implemented fleet of grid scale battery energy storage systems.
Roy and Jason, thanks for joining us.
Paul Ciampoli
I'm imagining that most of our listeners are familiar with both of your organizations, but for those who are not, could you describe Lightshift Energy and MMWEC, respectively?
Rory Jones
I'm a co-founder and managing partner of Lightshift Energy. Lightshift is a stand-alone battery energy storage developer, owner operator. We're active across the utility scale spectrum from smaller 2-megawatt projects on the distribution system to 200 plus megawatt assets on the transmission system.
We've been around now for about five years and what distinguished us early on was our focus on really maximizing the flexibility of battery technology.
So not just thinking about finding the path of least resistance to interconnect and jump in a queue, but working with utility, community and corporate partners collaboratively to try to solve multiple problems at once through multi-use storage applications. There's this now fairly well known pie chart from the Rocky Mountain Institute that you guys might be familiar with, it's like a menu of storage uses around the pie, starting with ISO RTO services like energy arbitrage, spinning reserve, frequency regulation, moving to another slice, utility services like resource adequacy, transmission deferral, congestion relief and distribution deferral and then down to the third slice, customer services like backup power or microgrid capabilities.
And by siting strategically, you can offer many of these services at once, spreading the battery cost over more value and making the projects much more interesting in doing so and this is how we like to think about our battery projects.
We perform this exercise exhaustively, and we don't just do it for today, but we also look at the medium and long term before moving ahead with our project investments.
And the Massachusetts projects that we're building with Jason and MMWEC -- they very much embody this philosophy that by doing more with the battery system, you can make it much more cost effective and generally speaking, more collaboration with project partners like MMWEC leads to better informed multi use applications.
We have a very nimble shop as well where our leadership gets very involved in utility and community engagements and because of the collaborative nature of our public power partners, we're doing a lot of work in the public power space across the country.
For example, our first project, which has been operating since 2022, was with Danville Utilities in Central South Virginia. It's a 10 1/2 MW project that does peak shaving for Danville in the increasingly constrained AEP Zone of PJM. As a secondary operation, we placed the battery into the PJM frequency regulation market.
By employing multiple uses there, the project was really attractive to Danville.
By their estimates, it will save them over $40 million throughout the life of the project.
At the same time, we're carefully monitoring the project’s emissions impacts and they are materially positive, now having seen for 18 months what those impacts are.
And so there's another layer to our battery projects that we're really excited about as well -- it's implied emissions reductions.
These types of projects are extremely impactful, both economically, but also in the positive system benefits and emissions reductions that they convey and that's really what our company is all about. It's trying to engineer projects that look like that.
Jason Viadero
My name is Jason Viadero. I'm the engineering director for Mass Municipal Wholesale Electric. MMWEC is a joint action agency for municipal utilities in Massachusetts since 1969.
Since an act of the Legislature in Massachusetts in 1975 in which MMWEC became a public nonprofit and political subdivision, we’ve worked tirelessly to provide wholesale services to the Member utilities we work with.
My area of focus obviously is engineering and generation, which obviously pertains to our conventional generation fleet as well as our increasing renewable fleet, including solar, wind and now distributed battery storage projects.
MMWEC does a lot on the wholesale market side, but additionally, we have a host of other services that we provide to utilities including energy efficiency, demand management, project financing as well as rate comparisons and other things -- really trying to provide essentially a one stop shop for the utilities we work with so that they have ample opportunities to come to us for anything wholesale market related.
Paul Ciampoli
Jason I wanted to start with you for the next question.
I just wanted to get a better sense as to how and why MMWEC decided to work with Lightshift Energy on this particular energy storage program.
Jason Viadero
Yeah, I think as Rory mentioned, it's really Lightshift’s ability to try to value stack and then their ability and what they've demonstrated thus far with really putting projects in the ground and meeting aggressive timelines that we put in place for them.
You know this is going back quite a few years --did a very extensive vetting process, which started with multiple different rounds of proposals and 13 initial energy storage integration vendors. And through that and through successive rounds of proposals and really trying to whittle it down, Lightshift proved far and away their ability to deliver the best value for the utilities we work with. And again, like I said, the ability to put projects in the ground to get systems online and to get these things performing as quickly as possible because really there's a huge benefit, particularly here in the New England area for the demand management and peak load reduction services that these systems can provide for our distribution utilities.
Paul Ciampoli
Rory, I want to start with you for the next question, specifically wanted to know if you could provide additional details on what this program calls for in terms of storage deployment across Massachusetts and if you could provide any insights with respect to the timeline for completion of the program.
Rory Jones
Our timeline for completion is open-ended. We've been underway now for 18 months and counting.
I've been working hand in hand with Jason and his team at MMWEC.
We are looking at a growing list of participants in the program and phasing our development, our construction and ultimately entry into operations of those participants over time.
Right now, we've got four projects under construction. We've got two that will over the course of the next four weeks reach commercial operations and then another two that will come on by the end of the summer and we'll continue to to do that over the coming 24 plus months.
We have talked about an aspirational 50 megawatts of project participants, but I hope the list continues to grow.
We are really pleased with efficiencies that we've been able to generate out of the program.
A lot of work has been put in to position us now for just being able to scale and replicate and bring more partners into this as the waves of projects enter construction and into operations, so I would defer to Jason if he has any further elaboration on that.
Jason Viadero
Like Rory said, there's really no fixed target, but essentially the aspirational goal of really trying to target is upwards of 10 installed systems within the utilities we work with -- a 50 MW, 200 MW-hour target to really get that installed within the next two years.
Paul Ciampoli
So, Jason, I'm going to start with you for the next question and Rory, obviously feel free to weigh in after Jason's remarks.
Jason, I wanted to know if you could talk about the ways in which MMWEC and its member public power communities are going to benefit from this program.
Jason Viadero
I think obviously the primary benefit and where we see a ton of value in these systems at least in the short term is really in peak demand management.
MMWEC and some of the utilities within Massachusetts that we work with have been really forward thinking in this space starting all the way back in 2016 with Sterling, who was one of the first utilities within the ISO New England area to install grid scale storage in a project that was largely supported by the Massachusetts Department of Energy Resources, National Renewable Energy Laboratory, the Clean Energy States Alliance -- those kind of cutting edge projects in Sterling in 2016 and then some of the projects that were funded by ACES [the Mass Clean Energy Center’s Advancing Commonwealth Energy Storage (ACES) Program] are accelerating clean energy storage grants from the Massachusetts DER back in 2018, really got systems in the ground early that could prove out the benefit that energy storage has in the peak load reduction space -- primarily in reducing capacity and reducing coincident transmission loads for the utilities we serve.
Looking kind of holistically where we stand now in New England from a wholesale cost standpoint, more than 50% of the wholesale costs that our member utilities have to bear is a result of transmission and installed capacity charges, which are basically calculated on a single coincident yearly capacity peak and 12 monthly coincident transmission peaks.
To the extent that energy storage can be utilized to to basically flatten out and shave those peaks and shift power from midday when there might be excess solar overnight where there's other excess renewable generation to really limit that peak -- that stands to benefit our member utilities and the utilities installing these systems to the tune of millions of dollars.
But I think, like Rory said, and one of the areas, I think we're increasingly interested in too is really some of the value stack that Lightshift has brought to this.
Things that we weren't even thinking about eight years ago when Sterling first went in.
Now we're looking at essentially resilient microgrids and how can we use these systems for peak load reduction and providing backup power to local school systems or other resilient systems in that way.
So I think there's a lot of economic benefit. And like I said, it's going to be to the tune of tens of millions of dollars, but then all the other ancillary benefits that these systems can provide, really harnessing all the capabilities of this energy storage.
Like Rory said, these are 20-year projects too, so what might be true now, we certainly see that there's going to be increased value to meet some of the ambitious climate goals that the Commonwealth of Massachusetts as well as the other New England states have in place, there's going to be an increase in transmission build out and to facilitate there's going to be increased transmission costs, so anything we can do to reduce our costs there is only going to pay dividends going forward.
Paul Ciampoli
Rory, did you have anything you wanted to add?
Rory Jones
I would just echo what Jason said. I would add perhaps that these are not just economically impactful, but they are supportive of a system that is increasingly constrained and they are having emissions implications that are very positive and we're seeing that through our own operational projects as we get better at quantifying that and as a secondary or tertiary service, even thinking about how we can use those battery projects as a means to facilitate emissions reductions more directly.
So in addition to being tremendously impactful -- and we could debate what the exact savings impacts of these projects are --- but if you take even a conservative view, a 5-MW project in New England is going to yield something north of $10 million and, if you took ISO's forecast, you might expect north of 15 or even 20.
So for a single installation in a town, this can be an extraordinarily impactful economic presence.
Paul Ciampoli
And I would imagine that's at the forefront of the list of benefits that a local public power utility would make note of as it communicates to residents that this is the reason why we're doing this.
Jason Viadero
Yeah, absolutely. And like Rory said too, there’s obviously the emissions reduction and the necessity of this in really trying to recognize where we're going as a grid holistically as we move towards increased amount of distributed energy resources and really just renewable resources in general to meet some of these ambitious climate goals, there's going to be the need to to really better match load with some of these intermittent resources and energy storage is certainly going to play a role there.
Additionally, too, at least in Massachusetts, we have very aggressive goals for decarbonizing some of the other sectors of our economy, namely transportation and home heating, as we look to move towards electric vehicles and as we look to move towards heat pumps for whole home heating...it's going to be critically important for them [utilities] to try to maintain stable and reliable low cost service as we look to shift off to some of these other fuels and really electricity is going to be the backbone for this decarbonization effort.
Paul Ciampoli
Obviously this program was just formally rolled out within the last week, but at the same time, obviously you guys have worked closely in terms of laying the groundwork for that announcement.
So in that context, I wanted to to give you an opportunity to discuss what your views are in terms of this program being something that could be duplicated by joint action agencies in other states.
Rory Jones
The short answer is it's highly replicable. Everything is a bit market context specific, but what's happening first and foremost in Massachusetts, with net zero 2050, is happening almost everywhere, and... the emissions impacts of these projects is something that I think will be attractive across markets.
We're actively working with other joint action agencies and G&T's for that matter on similar efforts across the country. It's very core to our business what we're doing with MMWEC.
I mentioned that Rocky Mountain Institute chart and one of the conclusions you could draw from that is as you go further downstream on the power system, you could continue to find incremental value for a storage project.
So for MMWEC, an example -- it's ISO services, frequency regulation let's say, utility services, resource adequacy, demand charge management, customer services, backup power in a few different instances -- that's a ton of value packed into one project.
The issue is they're smaller, so how do you overcome scale economies when you're obviously building something individually that's smaller.
While those scale economies aren't insignificant, it's clearly going to convey more transaction costs.
Maybe you aren't able to achieve exactly the same price point on the amount of batteries you're purchasing in one go, through aggregation and careful program design through bulk procurement, pooling of soft costs, as we've done with MMWEC, you can actually get pretty darn close to those same costs you would find with a 100 MW project. And we know that because we're developing those as well.
So we're really trying to find ways on a net value basis to bring the most value to our public power partners, whether that be through a fleet of two to five MW projects as the case is here with MMWEC across multiple utilities or across multiple sites or with a large transmission connected asset that's been sited with very thoughtful purpose. There is a huge opportunity for replication and we are exploring it very proactively in all the markets that we're present in.
Jason Viadero
I think Rory really hit the nail on the head just with regards to bringing economies of scales to the utilities we work with, particularly smaller utilities and really just bringing in a group mentality and being able to lever up different resources and different insights from many different utility managers -- both big and small -- for the project we're working with here.
You know, we're working with utilities as small as 2,000-3,000 meters up to 28,000 meters.
Each one of those general managers, each one of those systems, they're bringing in their own insight, their own thoughts, their own consideration...we can work with them as they work to really help develop a program that's going to be as meaningful and impactful to utilities as possible.
So really I think this is just something that underscores the value of joint action just in general and we're very hopeful that this can be replicated elsewhere.
Paul Ciampoli
Thanks Rory and Jason for taking the time out of your day to discuss this really interesting program and we'd love to have both of you back at some point in the future as guests on the podcast to detail the benefits that have flowed from the program and any other updates you want to offer on the program.
Rory Jones
That would be a pleasure. Would really appreciate it. Thanks a lot.
Jason Viadero
Yeah, absolutely. Thank you, Paul.
Paul Ciampoli
Thanks for listening to this episode of Public Power Now, which is produced by Julio Guerrero, Graphic and Digital Designer at APPA.
I'm Paul Ciampoli and we'll be back next week with more from the world of public power.
