EGN NEWS DESK
This has made the DSGS program a key goal for VPP builders in California, with $295 million budgeted for members in 2022 and 2023. About 1,300 members in DSGS-funded packages had been in a position to scale back peak load by about 315 megawatts and supply greater than 3,100 megawatt-hours of emergency response throughout sizzling summer time climate in the summertime of 2022, based on the businesses that signed on to the protest letter to state lawmakers. Those firms have deliberate to “present way more emergency capability in the summertime of 2024.”
“This newly expanded and re-designed program was lastly launching for a full summer time in 2024,” Perez of Advanced Energy United instructed Canary Media in an e mail. But the proposed finances cuts would get rid of $186.5 million in DSGS funding by means of this yr and subsequent, leaving solely $75 million deferred to 2025 and 2026, based on business teams monitoring the most recent finances figures. That would “severely affect” taking part firms’ efforts, since they “must have predictability to spend money on market growth, buyer onboarding, and program setup,” the letter said.
“If the proposed reductions undergo, I don’t know the way that can have an effect on new and present members,” stated Cisco DeVries, government vice chairman of Renew Home, the corporate shaped by the merger of Google Nest’s sensible thermostat energy-shifting service Nest Renew and California-based residential demand response aggregator Ohmconnect. Renew Home works with a whole lot of 1000’s of households in California and took part within the DSGS program in 2022 and 2023.
The potential for VPPs in California is especially sturdy, given the state’s preponderance of properties outfitted with rooftop photo voltaic, backup batteries, sensible thermostats, and electrical car chargers. In an April report, consultancy Brattle Group projected that VPPs may allow $550 million per yr in shopper financial savings in California and supply in extra of 15 % of the state’s peak grid demand by 2035.
Jigar Shah, head of the U.S. Department of Energy’s Loan Programs Office, which has issued billions of {dollars} in mortgage ensures to help VPP deployments, highlighted that report in an April social media put up, citing it as proof that VPPs are the “lowest price manner” for utilities and regulators “to deal with load progress and decrease charges for everybody.”
But with the way forward for the DSGS program now very a lot unsure, it’s unclear how California utility regulators and policymakers will allow that potential, DeVries stated. “An enormous a part of how we had been going to determine the subsequent part of demand response and digital energy crops within the state of California was the CEC packages, each DSGS and others,” he stated. “So now we’re again to the drafting board. We don’t have the solutions to what’s going to occur subsequent.”
That’s a downside for a state that’s concurrently attempting to regulate electrical utility charges which can be among the many highest and the fastest-rising within the nation, preserve the lights on throughout worrying grid occasions, and “retire a bunch of soiled previous fossil gasoline crops,” he stated.
The lacking cash for alternate options to fossil fuels
To date, the lion’s share of California’s emergency-grid-support funds has gone towards extending the lifespan of its fossil gasoline crops. The state has already spent about $426 million from these emergency packages to construct or procure “emergency and non permanent” energy turbines that burn fossil gasoline or diesel gasoline, based on a May report from the state Department of Water Resources, which administers that program.
Another $1.3 billion in funding has been promised to firms that personal and function getting old fossil-gas-fired “peaker” energy crops in Southern California that had been slated to be closed in 2020 underneath environmental laws. Those crops are a significantly egregious goal for state funding, environmental advocates stated, provided that they burden surrounding communities with dangerous air air pollution, and have been unprofitable to function absent state subsidies.
What’s extra, these energy crops take days to ramp up upfront of predicted grid emergencies and are way more costly than the capability that may be enlisted by means of the DSGS program, which consists of consumers that may virtually instantaneously scale back energy use or commit battery energy to serving to the grid, Perez stated.
The proposed cuts to DSGS and DEBA aren’t the one state funds for cleaner alternate options which may fail to materialize. Part of the emergency plan specified by 2022 referred to as for guiding $900 million to incentives to fund battery installations in lower-income and deprived communities. But solely $280 million of that has been put aside within the state finances.
“To keep commitments to fossil gasoline assets and reduce on deployment of latest assets — clear assets that may very well be used for emergencies — is short-term pondering and simply appears form of backwards,” stated Ed Smeloff, managing director of the regulatory staff at nonprofit group Vote Solar. “It’s essential to have strategic reserves for the longer term, as a result of we’re going to have excessive climate occasions. That’s a truth of life. But these reserves needs to be suitable with the state’s clear vitality insurance policies.”
It’s attainable that state leaders goal to as a substitute depend on the bigger quantity of utility-scale batteries to resolve California’s grid issues, Smeloff stated. In April, Newsom introduced that California has deployed 10 gigawatts of put in battery capability, a 13-fold enhance from 5 years in the past, and sufficient to fulfill about 20 % of the height electrical energy demand for the grid managed by the California Independent System Operator (CAISO).
But it’s not clear that California can proceed that breakneck tempo of utility-scale battery growth within the face of its crowded transmission-grid interconnection queues, Smeloff stated. Nor is counting on large-scale batteries alone essentially the most cost-effective path for the state. A 2020 report from Lawrence Berkeley National Laboratory discovered that smarter utilization of demand-side assets may change the necessity for billions of {dollars}’ value of batteries and different utility-scale assets.
At the identical time, California residents are being inspired by state clear vitality and local weather insurance policies to purchase electrical home equipment, warmth pumps, and EVs as rising electrical charges make them extra expensive to function, he stated. Finding a way for these prospects to earn cash for programming these units to alleviate grid peaks is a very important counterbalance to the upper electrical payments they’ll face as they electrify.
It’s additionally seemingly that state leaders consider that the grid emergencies of 2020 and 2022 aren’t as dire at present, Smeloff stated. An evaluation from CAISO final month signifies that the state has a surplus of assets to fulfill anticipated peak grid calls for this summer time, he famous — a stronger place, at the very least on paper, than the state has had in years.
But as McMahon of the California Energy Storage Association famous, “We had a delicate summer time final yr. But what occurs the yr after that if we haven’t deliberate for it?”
