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How can Indiana ensure it has the energy resources it needs to fuel a growing economy?
The key to addressing climate change, electric system reliability, resiliency and stability, water consumption, public health, economic development and utility bill affordability is the distributed electric grid paradigm.
Currently, distributed energy resources—or DERs—consist of off-the-shelf energy efficiency, rooftop and community solar, distributed wind, battery storage, and demand response. EVs should not only be viewed as more electric demand but will also add enormous energy capacity to the grid—if properly integrated with other DERs.
DERs are being coordinated to create virtual power plants, referred to as VPPs. VPPs are aggregated residential and/or commercial customers that function as utility-scale power plants. VPPs are controlled by web-based signals to thousands of homes equipped with the necessary distributed energy technologies. Currently, the vast majority of VPPs are demand-response programs but increasingly include rooftop solar and storage.
Energy analysts at the Brattle Group found in a recent study that VPPs can provide the same services as utility-scale investments at 40% to 60% of the cost. RMI (formerly the Rocky Mountain Institute) estimates that VPPs could reach 60,000 megawatts by 2030—equivalent to 24 million homes. Brattle estimates savings of $15 billion to $35 billion over the next decade. Societal benefits, which Brattle defines as reduced emissions and resiliency, add $20 billion in savings.
Other benefits include that VPPs are not subject to interconnection queue delays and, according to DOE, “most of the money spent on VPPs flows to electricity consumers (households and businesses).”
A critical VPP benefit is enhanced electric system resiliency. Given that climate-change impacts are essentially a constant threat to the electric grid, regardless of season, Brattle refers to VPPs as “real reliability” because the bulk power system alone can no longer provide it.
Indeed, the DOE refers to its 2023 report on VPPs as “an urgent call to action for a diverse range of stakeholders to accelerate VPP liftoff.”
The Citizens Action Coalition would add that a strategic buildout of VPPs in the state would substantially reduce power generation from thermo-electric coal and gas plants, thus reducing stress on water availability while also reducing toxic emissions and waste.
But none of these benefits will be realized unless a complete overhaul of Indiana energy policy is initiated.
Unfortunately, the current supermajority in the Legislature is hostile to distributed energy resources. On behalf of the utility lobby, it killed Energizing Indiana—a statewide energy-efficiency program that was estimated to have saved more than $3 for every dollar spent—and net metering, substantially reducing the financial benefit of customer-owned solar. Indeed, Indiana’s energy policy is merely a series of laws that have systematically enacted the business plans of Indiana’s major investor-owned utilities.
The supermajority coddles thermo-electric power plants and unswervingly supports nonexistent modular nuclear reactors—both of which are vulnerable to extended droughts, severe cold, violent storms and flooding that are projected to increase as climate change worsens.
Policies that embrace the distributed electric grid paradigm will empower all consumers and communities to benefit from the clean energy economy, enhancing Hoosier’s quality of life and helping to drive economic development.•
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Kerwin Olson is executive director of Citizens Action Coalition. Send comments to ibjedit@ibj.com.
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So much a Indiana’s energy policy is geared to protecting big utility companies. Big utility companies treat distributed projects as the enemy with regulations backing them up. The only state that I think has made significant and meaningful changes to turn that adversarial relationship around is Hawaii.