LEAN Energy US had the chance to talk yesterday with Integrys Energy Services’ Ron Cardwell, Vice President, Direct Mass Markets about their renewable energy strategies. Both Ron and and Melissa Lauderdale, Director of Regulatory & Government Affairs, will be presenting at the National CCA Summit in Chicago next week, November 11-13th.
Q: Why would an energy company whose primary business is still largely based in natural gas and other fossil fuels want to be a part of the renewable energy market?
A: Integrys Energy Services is in the business of meeting our customers’ energy needs. We have seen much more interest in cleaner, greener energy options in the past couple of years, so it’s important that we be able to serve those customers seeking renewable options.
Q: Will supplying energy for the Chicago CCA and other Illinois municipalities make renewable energy a larger piece of your portfolio? How do renewable energy credits (RECs) play into your long term power planning and energy portfolio?
A: Other than our distributed solar portfolio, Integrys Energy Services owns very few generation assets. So, we construct our purchased supply portfolio to meet each market’s Renewable Portfolio Standard (RPS) and to meet customer demand for renewables beyond what’s required by law. For example, in addition to complying with the Illinois RPS through REC purchases, approximately 5% of electricity provided to Chicago residents and small businesses through the City of Chicago’s Aggregation program is generated by Illinois wind farms. All electricity sourced for Chicago’s program is from completely coal-free resources. The City of Oak Park chose 100% Renewable Energy Credits (RECs) for its aggregation program that Integrys supplies, and a number of Illinois communities offer greener power options to residents as part of their aggregation programs. Without a doubt, successful community aggregation in Illinois has increased the portion of renewable energy in our supply portfolio.
Q: What is the current demand for renewable energy? Do you think it will continue to grow? Do you see this demand playing out in the REC market, the purchase of physical renewables (as in Chicago’s wind purchase) or interest in new, local generation projects? What aspect of renewable energy is leading the way?
A: Yes, we believe the demand for renewable energy will continue to grow. First, Renewable Portfolio Standards across the country are designed to increase each year for the next 5 to 15 years, depending on the state. This alone will significantly increase demand. Second, customers are driving additional demand for renewables, especially in markets that are open to competition and have community aggregation as an option. Beyond renewable energy itself, all levels of government are exploring energy efficiency, demand response, smart grids, and other mechanisms to optimize the demand side of the energy equation.
What renewable resources are leading the way? Wind continues to be a major driver among renewables, if you measure success by the amount of energy produced. But interest in solar is picking up considerably as the technology is becoming more cost effective and efficient. Solar is certainly the fastest growing segment. And while not renewable, we’re seeing more energy generated from natural gas and less from coal. Natural gas creates fewer greenhouse gas emissions than coal. This transition from coal to natural gas is the reason CO2 emissions from electric generation have fallen over the past few years. We expect all these trends to continue.
Q: What are the associated challenges of scaling up new renewable energy projects on a large scale?
A: In reality, doing renewables at scale is one of the biggest challenges we face in this area. We spent over 100 years perfecting our 20th century power generation technologies. We got pretty good at building large efficient central generation plants. In contrast, we have maybe ten years of serious investment in renewable technologies. I’m getting a little into the white space here, but I think the solution is to continue proliferating energy efficient technologies, demand management, and distributed renewable assets that together create the scale we need. So, in that given that view, education and adoption are the big hurdles.
Q: CCA programs are currently allowed in 6 states. Do you think this will go nation-wide? Why or why not? What advice would you give to other energy companies interested in CCA and the renewables market?
A: Yes, we think community choice aggregation programs will expand to other states. Aggregation has delivered savings, great customer service, cleaner and greener products, transparency, and rate stability. Illinois is a great example of these successes and other states are paying attention. A number of states are having conversations about aggregation. These conversations weren’t happening a year or two ago in states like New York and Connecticut. While we think community choice aggregation will continue to expand, it is limited to those states with retail electric competition. Unfortunately, many are not.
Suppliers interested in community aggregation should focus on listening to the needs of the community and being responsive to those needs. Aggregation is much more than a simple supply deal – it’s a relationship. As an aggregation program supplier it’s important to meet – as well as anticipate – each community’s evolving needs, while providing exceptional added value and services.
Q: Is renewable energy a profitable part of your business, or do you include renewables out of social responsibility?
A: Renewable energy is a profitable part of our business. Integrys Energy’s business decisions require us to balance stakeholders that include customers, shareholders, and communities. Being able to provide renewable alternatives is good for all three.
In addition to purchasing renewable supply, Integrys has a distributed solar generation arm. We promote, invest in, and manage solar projects across the country. Additionally, our sister company, Trillium CNG, constructs and manages compressed natural gas fueling stations. Aside from being cost effective and safe to use, compressed natural gas offers environmentally-friendly benefits as it displaces diesel fuel.
When we are able to meet a demand in the marketplace in a way that contributes to our investors earning a return, while also providing environmental benefits to communities, that’s a win-win-win.
Please join us next week at the National CCA Summit in Chicago, November 11-13th, to meet Ron Cardwell, Vice President, Direct Mass Markets and Melissa Lauderdale, Director of Regulatory & Government Affairs. This Summit will be THE Place to learn more about community choice aggregation (CCA), an innovative policy tool which empowers local governments to leverage the purchasing power of their residents to choose their supplier and their source of electricity. Many communities are using CCA to get more renewable energy sources in their mix, leading to significant reductions in GHG emissions. CCA is currently enabled in CA, IL, OH, NJ, MA, and RI but is building momentum in several other state legislatures. Registration is still open, so please register now at National CCA Summit . See you there!