SMUD Visit -- Solar Shares

I had a nice visit with the team at SMUD several weeks ago along with Shai Agassi, Martin Roscheisen, and Chris Anderson (who arranged the trip). We were very graciously received by SMUD CEO Jan Schori and members of her team.

One highlight of the trip was the tour of SMUD's grid operations center led by Jim Shelter. It's one thing to read about things like transmission congestion, dispatch, reserve margins, and ancillary services; but, it is another to see how the operators actually track, manage, and control it all. What is equally remarkable is how calm and orderly the process is--I kept thinking about the plans we have for Recurrent Energy's solar network operations center and took lots of mental notes.

Here's a photo of Shai, Martin, and me at the heart of it all:

Another highlight was the opportunity to meet with some of the senior executives at SMUD who oversee programs relevant to our businesses. We met with Bill Boyce who runs SMUD's electric vehicles and vehicles-to-grid program which was of particular interest to Shai, who is blogging about his efforts to start a very ambitious electric vehicle service following his recent departure as president of SAP.

For Martin and me, it was great to hear from Mike DeAngelis, the program manager for renewables and DG, and John DiStasio, the assistant general manager for energy delivery and customer service. Of particular interest is the upcoming Solar Shares program, which is the approach taken by SMUD to comply with the California Solar Incentive program requirements. Rather than implementing a host-customer incentive program, SMUD will meet it's solar generation targets by purchasing bundled solar energy in 1MW units from developers via a solar Power Purchase Agreement (PPA). It will then sell solar "shares" to its residential and commercial customers, allowing them to make a claim that their supporting and receiving solar energy service.

Solar shares is yet another take on how utilities will integrate distributed solar generation into their supply mix--and I think it's a promising approach. It encourages larger scale generation, which should create some purchasing efficiencies. Buying energy via a PPA allows them to shop for the most efficient projects that combine the best siting, design, and capital structure--leveraging the efficiency of the market to achieve the best cost per kWh. Plus using a PPA puts the performance obligation on the developer, aligning the interest of the developer with the utility's interest in receiving reliable solar output. Recurrent Energy is participating in the RFP process on Solar Shares -- we'll be very interested to see how it all turns out.

Thanks to Linda Carey Johnson, SMUD's chief information officer, for arranging the visit on SMUD's side -- we had a great time.