California is going through a serious determination below a decent deadline — whether or not it ought to push for large-scale energy vegetation and batteries to forestall a repeat of its August 2020 rolling blackouts this coming summer time, or flip to behind-the-meter assets like batteries and demand response. 

Proper now, the California Public Utilities Fee is transferring extra shortly to seek out supply-side options. However a rising refrain of distributed vitality useful resource (DER) stakeholders, from good thermostat kingpin Google Nest to main demand response supplier Enel X, are demanding an equal push to unlock behind-the-meter flexibility. 

Final week, the CPUC issued a ruling asking the state’s three massive investor-owned utilities to hunt out methods to broaden supply-side capability earlier than August 2021, the subsequent step in an effort launched in November to organize for the opportunity of one other regionwide heatwave pushing the state’s grid previous its limits. The choices may embrace increasing present energy vegetation, including new utility-scale battery capability, or securing contracts from out-of-state assets. 

State grid operator CAISO has proposed increasing its reserve margins and utilizing its emergency procurement authority to enlist assets that may provide electrical energy in scorching night hours when California’s solar energy is fading — the identical hours it was pressured to show off energy to lots of of hundreds of shoppers on Aug. 14 and 15 final 12 months. 

However critics to this supply-side strategy fear that new large-scale tasks are extremely unlikely to have the ability to be introduced on-line by the CPUC’s August deadline. That might result in utilities in a state with aggressive decarbonization objectives paying pure gas-fired energy vegetation to broaden their position in assembly grid demand. 

What’s extra, these vegetation could be requested to work hardest within the midst of a heatwave — the identical circumstances that pressured a number of gas-fired vegetation offline final August, exacerbating the circumstances that led to rolling blackouts. 

The open-ended nature of final week’s ruling additionally makes it unclear whether or not utilities would be capable to flip to backup turbines or different extremely polluting assets, moderately than in search of out carbon-free assets first, as required below the CPUC’s loading order rules, Ed Smeloff, director of grid integration at Vote Photo voltaic, stated in an interview. 

“There’s no assertion about price, or working traits, or what the contract time period is,” he stated. “Is it only for the summer time of 2021, or are they going to be multi-year? None of that’s specified.”  

Demand-side options — behind-the-meter batteries, good thermostats, or industrial and industrial demand response — might be a extra sensible set of choices to fulfill the CPUC’s August 2021 deadline. In actual fact, the joint California company root trigger evaluation into final summer time’s grid emergency highlighted “demand response and suppleness” because the assets more than likely to have the ability to be added by mid-2021. 

Utilities agree. Southern California Edison’s submitting famous that of the selection between reducing demand or rising provide, “lowering demand by enabling extra participation in demand response packages is extra prone to be achievable in significant amount previous to summer time 2021.” Pacific Gasoline & Electrical’s submitting highlights the necessity to keep away from utilizing the procurement “to broaden the fuel fleet in a manner that units the state again on its decarbonization path.” 

The CPUC final month issued a name for brand spanking new demand response proposals, anticipated to yield a proposed determination by March 2021. However within the meantime, “it does seem to be provide is transferring forward of load discount, and that’s regarding,” Smeloff stated. 

A rising demand for increasing demand response 

Each the CPUC and CAISO have expressed concern about counting on demand response for grid reliability, citing knowledge that signifies it may not be displaying up for grid aid at promised ranges.  

However demand response firms have identified that voluntary conservation efforts within the days following the rolling blackouts have been capable of ship about four gigawatts of load discount, indicating that prospects will be counted on to fulfill grid emergencies. And whereas most of that conservation was primarily charity, discovering methods to pay for it may create a persistent and dependable useful resource, they are saying. 

Google Nest’s submitting famous that its good thermostat utility packages with Southern California Edison, San Diego Gasoline & Electrical and Los Angeles Division of Water and Energy, together with its third-party companions Leap and Ohmconnect, have been capable of shift about 60 megawatts of load in the course of the Aug. 14 and 15 grid emergencies. With the suitable insurance policies in place, it estimated it may double or triple that by subsequent summer time. 

However to get there, California might want to revamp its demand response packages in a number of methods, in accordance with these and different stakeholders. 

Demand response “did come to the rescue, and extra may if the foundations have been relaxed to some extent,” Greg Wikler, govt director of the California Effectivity + Demand Administration Council, stated in an interview. However “it’s not able to taking part within the market given the foundations which were put in place.” 

California’s demand response useful resource has fallen from about 2,000 MW in 2015 to about 1,500 MW as we speak. In accordance with demand response firms, that’s because of the CPUC’s shift over the previous 5 years away from conventional, utility program-centric demand response approaches, and towards fashions primarily based on participation in wholesale vitality markets just like different “dispatchable” assets like energy vegetation.   

Whereas this effort was well-intentioned, “there have been so many guidelines and obstacles put in the way in which to permit that useful resource to flourish,” Wikler stated — a view echoed by many California demand response individuals. 

The CPUC’s emergency reliability order does supply the potential for brand spanking new approaches to seize the worth of demand-side flexibility, by proposing an Emergency Load Discount Program (ELRP) that would supply out-of-market compensation for assets that may be made accessible throughout important moments like final August’s heatwave.  

However Google Nest argued in its submitting that the CPUC’s August 2021 deadline makes creating completely new DR packages unfeasible, in comparison with increasing present packages. 

The critique of California’s strategy to demand-side flexibility 

The demand response public sale mechanism (DRAM) pilot program, which permits aggregated batteries, electrical car chargers, good thermostats and different sources of load flexibility to take part in California’s energy markets, was the earliest instance of the CPUC’s shift to market-based participation. 

However after this system got here below scrutiny in 2018, its price range was minimize in 2019 and 2020, lowering the whole quantity of versatile load below contract. Many stakeholders are calling for a supplemental DRAM public sale with the next price range to assist enlist demand response for summer time 2021, but it surely’s not clear if the CPUC will take up the suggestion. 

DRAM individuals Enel X, OhmConnect, Leap and Stem contributed a collective 410 megawatts of load discount within the week following the rolling blackouts, in accordance with Wooden Mackenzie. That’s almost 4 instances the quantity of capability these 4 firms have formally enrolled within the DRAM program, nevertheless — a nod, critics say, to the restrictive nature of the foundations that decide how a lot capability individuals are allowed to assert. 

One of many largest challenges cited by demand response individuals lies in the CPUC’s “Load Influence Protocol” examine course of, which places load-modifying assets by way of a fancy sequence of calculations to find out their capability worth. 

Amongst different issues, these guidelines received’t enable any newly enlisted demand-side assets to be compensated as useful resource adequacy — California’s regime for valuing grid capability — until they’ve already been accessible for at the least a 12 months. Demand response suppliers Enel X and CPower prompt of their joint submitting that the CPUC waive that rule for brand spanking new demand response assets being hunted for summer time 2021 grid aid, but it surely’s unclear if the CPUC will take into account this step. 

What’s extra, the “baselining” methodologies used to find out how a lot load discount occurs at prospects websites in comparison with their regular operations could also be undercounting their worth throughout grid emergencies like final summer time’s heatwave, many individuals say. That’s primarily as a result of baselines taken throughout earlier days of regular temperatures underestimate the spike in electrical energy use throughout extraordinarily scorching days, and the adjustment strategies for taking this into consideration aren’t rigorous sufficient to seize the distinction, stakeholders say. 

A California Effectivity + Demand Administration Council evaluation signifies that many demand response individuals in the course of the August 2020 heatwaves might not obtain credit score for his or her reductions due to this drawback with baseline methodology, Wikler stated. In actual fact, some might find yourself being penalized for under-performance, he stated. 

These obstacles haven’t stopped firms from enlisting new demand response and behind-the-meter battery prospects in California. Oakland, Calif.-based startup Ohmconnect final month raised $100 million from Google-affiliated Sidewalk Infrastructure Companions to construct out 550 MW of residential load flexibility through good thermostats and WiFi-connected good plugs. It and different firms are asking the CPUC to carry a standing eight.Three-percent cap on the share of utility and group selection aggregator (CCA) useful resource adequacy that may be served by demand response. 

U.S. residential photo voltaic chief Sunrun is enrolling tens of megawatts of battery-backed photo voltaic programs as digital energy vegetation. It and different behind-the-meter battery distributors are asking for rule modifications that might enable extra battery capability to be fed again to the grid. 

However the guidelines that now exist might be dampening the potential for capturing California’s nation-leading roster of behind-the-meter assets, which provides as much as gigawatts of latent capability, in accordance with Wooden Mackenzie’s evaluation. 

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