Read part 1 here.
Ouantifying the value of grid resilience in particular remains a challenge that can exacerbate regulatory, financing, and development obstacles. In last month’s introduction to this series, we laid out how it is increasingly clear that communities and utilities must strengthen their energy systems to ensure obstacles presented by the combination of aging electric grid infrastructure and increasingly extreme weather can be minimized or avoided.
Despite the challenges facing the electric grid and obstacles to resilience-building projects, there are myriad solutions and partnership opportunities to help utilities and communities work together to build resilience. Below, we focus on some of these best practices.
TOOLS TO BUILD RESILIENCE TOGETHER
Navigating the challenges to deliver resilient and reliable energy often starts with a successful partnership between utilities, communities, and a trusted energy solutions provider. Together, they can best pursue the right mix of intermittent and firm energy sources, access diverse funding structures, and successfully navigate the development process. The solutions these partnerships facilitate include:
Distributed Energy Resources (DERs)
This catchall term includes a number of grid-edge resources that can be located at businesses or homes and work alone or in concert—including on-site solar systems, fuel cells, BESS, diesel generators, combined-cycle natural gas generators and others. In addition to serving as new energy supply to meet growing demand, utilities and communities can use these technologies’ unique attributes to improve grid stability, avoid or reduce the scale of blackouts and shift the timing of energy supply and demand into better balance.
Energy Efficiency
For decades, energy efficiency projects such as building weatherization, HVAC improvements, and high-efficiency lighting have helped keep electricity demand relatively flat in the U.S. As energy demand grows, reducing large consumers’ loads is more important than ever. Efficiency efforts reduce strain on the grid, allow customer- and community-owned DERs to be properly sized, and create revenue opportunities through participation in demand-side management programs.
Flexible Financing Structures
There are a variety of financing and contracting structures available today to support the implementation of resilience projects: design-build using traditional loans, power purchase agreements (PPAs), energy savings performance contracts (ESPCs) and grant funding. Partnering with an energy solutions provider can facilitate diverse funding options and identify those that are best suited for an entities’ fiscal goals and restraints.
In a design-build contract model, for example, the customer outsources development and implementation but owns the resource and the energy solutions provider may continue to provide operations and maintenance service after completing the project. Alternatively, the energy partner can own the project and sell energy to the customer via a PPA or similar contract. The energy partner and customer could also enter into an ESPC, which makes energy projects budget-neutral. Essentially, the energy solutions provider guarantees that energy savings from a project will pay for improvements. The customer pays little or nothing upfront and the energy partner recoups the investment over time as the savings are realized.
On the financing front, energy partners can help customers tap private sector financing and partnerships to reduce dependence on capital or taxpayer funding.
Funding and Incentives
Energy solutions providers can also help customers identify and seek federal, state and local sources of public funding and relevant tax incentives made available to help utilities and communities pursue grid resilience. In these dynamic times, partnering with an experienced adviser who is adept in the eligibility criteria is key for navigating these funding opportunities.
Project Development
Every resilience project will have its share of regulatory and development challenges that add obstacles during development. Community leaders are often not well versed in the developmental and regulatory steps required to steward a resilience project to completion. It’s in their best interest to collaborate with a utility and independent energy solutions partner with experience developing energy projects for customers.
A LOOK AHEAD
A reliable partner will work collaboratively to understand the challenges faced by various stakeholders in any resilience project. They bring a unique background to bridge the gaps between utilities, municipalities, regulators, constituents, etc. They also bring expert compliance teams to support their partners’ projects.
The benefits of grid resilience to municipalities and utilities become clear when examining real-world projects, and in the conclusion to this series, we’ll examine some past projects, highlighting how effective partnerships are delivering resilience projects with quantifiable benefits.
Ameresco, Inc. is a leading energy infrastructure solutions provider dedicated to helping customers reduce costs, enhance resilience, and decarbonize to net zero in the global energy transition. Our comprehensive portfolio includes implementing smart energy efficiency solutions, upgrading aging infrastructure, and developing, constructing, and operating distributed energy resources. As a trusted full-service partner, Ameresco shows the way by reducing energy use and delivering energy infrastructure solutions to Federal, state, and local governments, utilities, data centers, educational and healthcare institutions, housing authorities, and commercial and industrial customers. For more information, visit www.ameresco.com.