Blog > December 2016 > A Month after the Election - What is the Future for Clean Technology and Demand-Side Management?

A Month after the Election - What is the Future for Clean Technology and Demand-Side Management?

12/8/2016 12:20:22 PM | by Elliot Creem
white-housefinalIt's December, a month after the election and the dust has settled on the control and direction of the federal government for the next four years. Though Trump hasn't laid out a concrete energy plan, we have a better idea of policies he'll pursue and their consequences. Right off the bat, Trump's appointment of Oklahoma Attorney General Scott Pruitt, one of the leaders of the lawsuit challenging the Clean Power Plan, to head the EPA indicates the pro-fossil fuel generation tack his administration will take. Further though, it is important to assess the potential impact of direct administration changes (regulatory rollbacks, clean energy tax/credits) and indirect influences (commissioner appointments at state PSCs and FERC). It is clear that Trump plans on rolling back regulations that disadvantage fossil duel generation, but such policy changes will unlikely buck the market pressures that have led to more renewable generation, forced coal out, and driven more investment in natural-gas fired generation. Meanwhile, Trump has broken from some of his campaign rhetoric on policy changes concerning renewables; for instance, he flipped on the Production Tax Credit (PTC) for wind while campaigning in Iowa and it looks unlikely that he will push back on Congress' extension of the PTC through 2021.

Importantly, policy advancement will be concentrated at state legislatures and utility commissions, where regulatory shifts towards distributed energy resources (DER), non-wires alternatives (NWA) and grid modernization will have much larger impacts on demand-side management (DSM) and demand response (DR). The changing regulatory landscape coalescing around more DER/NWAs that can defer or avoid traditional capital investments may be attractive to conservatives partial to driving down costs. Interestingly, policies that ramp up infrastructure spending could dovetail nicely with advancing DERs: investments devoted to modernizing the U.S. electric grid could eliminate power-grid constraints that impede long-term growth from these energy resources.

There are several positive developments in the shifting regulatory landscape that put Comverge in a strong position going forward, especially given its complete DSM solution portfolio and ability to work with other DERs like renewables and storage. States like New York are taking actions to add more DERs to the distribution grid and utilities like Central Hudson are pursuing targeted demand management (TDM) to address capacity and reliability issues. Comverge is encouraged by state activities design to bring more DERs online in New York, Maryland, Massachusetts and Illinois. For example:

  • In New York, the Public Service Commission's Reforming the Energy Vision (REV) proceeding has directed utilities to file Distribution System Implementation Plans (DSIP) that have identified areas where NWAs like DR could help meet locational capacity constraints and defer or avoid traditional distribution investments. The recently filed Supplemental DSIP from the Joint Utilities (Central Hudson, Consolidated Edison, National Grid, Orange and Rockland and Avangrid) provided updates on current DER deployments and identified additional areas conducive to new non-wires solutions.

  • The Maryland PSC recently opened its own DSIP proceeding where it will evaluate alternatives to traditional distribution investments and make improvements to modernize the grid and facilitate more DERs. The investigation is on a much smaller scale than REV, but we are encouraged by the regulatory development in a state where we have strong relations with both investor-owned and municipal utilities.

  • Multiple states continue to move forward with grid modernization and advanced metering infrastructure (AMI), including New York, Maryland, Ohio, Massachusetts, Minnesota, Ohio, Illinois and the District of Columbia. Grid modernization will greatly help to increase adoption, integration and deployment of more distributed energy resources like DR.

Since the November election, we do not see any of these efforts losing momentum. Despite Trump's rhetoric that he will be anti-clean energy and push policies conducive to increased centralized fossil fuels in the power generation mix, it is important to understand that the executive branch and federal policies will likely have limited impact on the positive upward trajectory of clean technology and DSM. The current market forces that have been shuttering coal plants and increasing renewable generation, along with positive policy developments coming out of state legislatures and PSCs, are far more likely to impact DR and drive new opportunities. The future for DSM is bright, and trends in utility planning away from centralized generation towards distributed energy solutions will continue to drive new areas to provide value.