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MIT launches study to help NY effort to change utility business model


Essential Energy Insights - February 2021


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Six trends shaping the industries and sectors we cover in 2021

MIT launches study to help NY effort to change utility business model

TheMassachusetts Institute of Technology will be adding its research muscle to NewYork Gov. Andrew Cuomo's effort to implement the state's ambitious Reformingthe Energy Vision, or REV, plan, which aims to integrate the utility businessmodel with distributed energy resources.

TheMIT Energy Initiative is working with AVANGRIDInc., the owner of New York utilities and Rochester Gas and ElectricCorp., on a model to help determine the benefits and costs ofdistributed resources for New York's grid, MIT announced in a March 30statement.

Themodel will address one of the main problems for the distributed energyresources like rooftop solar: how to store energy after sunset. The wholesaleprice of electricity typically is determined by the availability and operatingcosts of conventional power plants and does not take into account low-carbonenergy technologies, the statement said.

TheMIT and AVANGRID effort will use economic modeling to simulate the introductionof distributed energy into an electric system and determine the value it can provideto the grid, as well as impacts on electricity prices, reliability and theenvironment. Figuring outthat value is critical for New York's REV plan, which seeks to turn utilitiesinto "distributed system platforms" that coordinate and trade energygenerated by customer-owned resources distributed throughout the grid and alsotake into account energy avoided through customer energy efficiency programs.

"Given the importance of understanding the impact ofdistributed energy resources on the power system, this collaboration providesan opportunity to obtain data from real-world networks that can be used toinform New York's REV plan as well as leverage some of the MIT Utility of theFuture Study activities," said Raanan Miller, executive director of the Utilityof the Future Study at the MIT Energy Initiative.

Through its REV plan,New York is attempting to create a new market design that will allow utilitiesto tap into distributed energy resources that would typically not be owned bythe utilities themselves. The state has also called for an 80% decrease in carbon emissions by 2050.

AVANGRID is owned by Spanish energy company .