Digital energy crops (VPPs), as aggregations of dispatchable distributed power sources (DERs), can ship grid providers starting from useful resource adequacy to reliability at scale—all whereas making power extra reasonably priced.
But, regardless of their deserves, the U.S. utility {industry} is but to leverage the full potential of those available, reasonably priced, customer-sited sources so as to add flexibility to the grid. After all, the choice to include a VPP into day by day operations can be knowledgeable by a number of elements, lots of which fluctuate throughout utilities. However there are at the least two widespread headwinds.
COMMENTARY
First, we all know {that a} proof-of-concept is an unobjectionable prerequisite for utility-scale VPP deployment. And with some 500 VPP tasks deployed throughout North America, utilities and regulators arguably have that want met. Second, and maybe most significantly, we all know that even with passable pilot program outcomes and modeled outcomes in hand, utilities are too usually disincentivized and, in some instances, outright precluded from profiting from utility-scale aggregations of linked units.
Luckily, simply as there are forward-looking utilities, so too are there forward-looking regulatory frameworks. And it’s by peering into the states and areas the place they coincide that we are able to see what the electrical grid is able to.
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Proof of Idea: California
Begin with California, the place a harmful mixture of excessive climate situations, capability provide shortfalls, and different elements precipitated unprecedented rolling outages in August 2020 and, in flip, mobilized the California Public Utilities Fee (CPUC) to implement the Emergency Load Discount Program (ELRP) in a matter of months.
In short, the ELRP started as a seasonal, five-year demand response (DR) pilot program that was restricted to the voluntary participation of PG&E’s, SCE’s, and SDG&E’s non-residential clients. Operational by summer season 2021, the ELRP’s 200 MW of enrolled versatile capability was efficiently referred to as on 4 separate events in its inaugural season. Past the avoidance of service disruptions, the debut of the ELRP resulted in additional than $1 million paid-out to taking part clients, and prompted the CPUC to undertake further, incremental steps towards a extra versatile grid.
These steps included the extension of the ELRP by 2027, full with an expanded providing of enrollment alternatives to the residential clients of the state’s three IOUs. Furthermore, in August 2022, the California Power Fee, launched the Demand Aspect Grid Help (DSGS) Program, which afforded higher swathes of California’s non-residential and residential utility clients—together with these not served by an investor-owned utility—expanded alternatives to be compensated for both voluntarily decreasing consumption or, importantly, injecting energy again into the grid, amongst different grid providers.
The mixture outcomes of those California emergency reliability applications—delivered by Olivine, a DR and distributed power useful resource administration system (DERMS) supplier—converse for themselves. Collectively, after displaying up on 10 separate events throughout the historic September 2022 heatwave, ELRP and DSGS have since been credited with considerably addressing California’s perennial useful resource adequacy woes. Furthermore, they’ve succeeded in selling some great benefits of voluntary, compensable participation in grid help applications. On the time of this writing, the mixture versatile capability represented by these two applications is 932.5% higher than ELRP’s preliminary 200 MW.
With these outcomes, it’s little marvel why the state has since stepped up its ambitions to leverage demand-side solutions—inclusive of market-aware VPPs — to whole-of-system challenges.
Proof of Idea: Massachusetts and New England
Begun in 2016 as a pilot program in Massachusetts, the open-access ConnectedSolutions program was launched at scale in 2019 with the commonwealth’s three IOUs—Nationwide Grid, Unitil, and Eversource—as a part of an effort to satisfy statutory power effectivity and “clear peak” targets with DERs, specifically business demand response and residential BESS and sensible thermostats.
This system, operated by DERMS platform supplier EnergyHub, has been tremendously profitable throughout a variety of metrics. Chief amongst them is the discovering that, by the tip of 2020, versatile capability enrolled in this system—310 MW throughout 34,000 voluntary residential and business buyer individuals—was greater than triple the 2020 goal for the commonwealth’s Clear Peak Power Normal. Consequently, the administration of ConnectedSolutions Massachusetts’ three IOUs succeeded in contributing to a 0.9% discount in statewide peak summer season load by 0.9%.
What’s most compelling, although, are the explanations for the now six-state program’s success. Take Nationwide Grid, whose residential and business clients enrolled some 174.9 MW of versatile capability by the tip of 2020, leading to 88 MW in web financial savings.
The Northeastern heavyweight’s 97% buyer retention charge might be attributed to the dimensions, certainty, and number of out there incentives. For example, each C&I demand response individuals and residential clients that enroll within the ConnectedSolutions program earn upfront, annual, and performance-based funds, and so they can “worth stack” with different applications, such because the ISO-NE capability market.
Coverage Rules for Leveraging the twenty first Century’s Biggest Untapped Power Useful resource
Luckily, these success tales are replicable by the inclusion of demand-side sources in portfolio planning. The next coverage rules can be utilized by regulators to tell their insurance policies, and by utilities to implement change to their planning processes, in parallel.
First, utilities and regulators can profit from integrating DERs and aggregations of DERs into their processes, building-in flexibility to revisit the wants of the evolving grid, and making certain a stage taking part in subject between demand-side and supply-side sources. For proof, we want solely contemplate the success of ELRP and DSGS in California and ConnectedSolutions in New England.
Second, any effort to deliver VPPs to scale is futile and not using a marketing campaign to deploy DERs. For patrons to enroll these belongings into VPP applications and reap the advantages, the belongings have to be built-in into folks’s properties and companies within the first place. Thus, supporting coverage constructions resembling tax credit and rebates, utility up-front financing, utility on-bill financing, and DER carve-outs for low-to-moderate revenue or energy-burdened clients is a key first step. These are measures that, as Inexperienced Mountain Energy and the Vermont PUC have proven, might be incrementally tailored as system wants change, or buyer demand rises.
And third, clients should be pretty compensated for using these belongings and the wealth of grid providers that DERs and aggregations of DERs present. In apply, this will likely embody ongoing efficiency funds, in addition to time-varying and dynamic tariff constructions.
If the unifying goal of utilities and regulators is to make sure that current and incoming hundreds don’t jeopardize grid reliability or affordability, then VPPs are the important thing to delivering the dependable, resilient, sustainable, and reasonably priced electrical energy system the twenty first century wants.
Just like the utilities they oversee, public service commissioners are eager to stability urgency with prudence, to inform their actions with proof. To that finish, the Digital Energy Plant Partnership (VP3) invitations readers to study extra about lively VPP deployments—and the insurance policies that enabled them. For extra data on VP3, go to vp3.io.
—Liza Martin is a communications specialist on RMI’s Carbon-Free Electrical energy staff, the place she focuses on leveraging strategic communications ways to mobilize key stakeholders within the electrical sector round reasonably priced and dependable grid decarbonization. Mary Tobin is a senior affiliate in RMI’s Carbon-Free Electrical energy apply, the place she leads the “Working with Utilities” working group for the Digital Energy Plant Partnership (VP3) initiative. VP3 is a coalition of {industry} voices working to scale the marketplace for digital energy crops by influencing the mandatory insurance policies, laws, and market guidelines—in a method that advantages each the grid and communities. Avery McEvoy is a senior affiliate in RMI’s Carbon-Free Electrical energy apply, the place she leads the “Regulatory and Coverage” working group for the Digital Energy Plant Partnership (VP3). VP3 is a coalition of {industry} voices working to scale the marketplace for digital energy crops by influencing the mandatory insurance policies, laws, and market guidelines—in a method that advantages each the grid and communities. Avery shapes technique and evaluation, venture manages and facilitates convenings, and leads member engagement. Angela Kent is the Regulatory Affairs Supervisor at VP3 member firm EnergyHub, the electrical energy {industry}’s most skilled supplier of distributed power useful resource administration programs (DERMS) for utilities. Angela helps the utility program and regulatory coverage evaluation, technique, and advocacy efforts of VP3. Joe Bourg is the vice chairman of Enterprise Improvement at VP3 founding member firm Olivine Inc., an industry-leading digital energy plant firm shaping the way forward for distributed power useful resource administration and grid providers. Joe is the co-chair of the “Working with Utilities” working group at VP3, the place he leverages his 30 years of power {industry} expertise to help the imaginative and prescient and mission of VP3.
