As California Prepares for Wholesale Distributed Energy Aggregation, New Players Seek Approval
California’s push to make aggregated distributed energy resources into transmission grid market players is the most developed in the country. But it’s still about a year from going live in a big way.
It’s also facing some key challenges, like getting approval — or at least “concurrence” — from the utilities that run the distribution grids where these newly minted DER providers will carry out their megawatt-scale energy shifting acts.
And then there’s the question of whether distributed energy resources (DERs) will be worth more at wholesale than they are under California’s new distribution grid values — or whether those values can be stacked together.
All of this uncertainty hasn’t stopped companies from applying for the job. Lorenzo Kristov, market and infrastructure principal at state grid operator CAISO, said at last week’s California’s Distributed Energy Future 2017 conference in San Francisco that several companies have already submitted applications to become DER providers under the new program. “I’d imagine they’re in the process of developing their actual resources they’ll be providing in the market,” he said.
Kristov didn’t name the companies involved. But a November 2016 report from CAISO to the Federal Energy Regulatory Commission does name four companies that have signed up for a “pro forma distributed energy resource provider agreement” — the first step in becoming a distributed energy resource provider, or DERP.
One was utility San Diego Gas & Electric, which proposed a 3- to 4-megawatt aggregation of energy storage sites across its territory — the largest of the four proposed projects. SDG&E proposed a 2018 start date.
Another was Apparent Energy, which said it was ready to launch in early 2017, working with Silicon Valley Power and Palo Alto’s municipal utility on two aggregations of 1 to 1.5 megawatts each. But a December report from Silicon Valley Power noted that Apparent “could not make a business case in SVP territory” at that time, although “as DG resources potentially grow and as the CAISO markets evolve, there could be potential.”
A third was Galt Power, a participant in other North American transmission markets, which proposed working with energy developer Customized Energy Solutions. The companies are “in discussions with several entities seeking to aggregate renewables and small-scale storage.”
Finally, there was Olivine, a scheduling coordinator that serves as an intermediary between CAISO and DER providers, which is “working with a number of clients, including municipalities, community choice aggregators, and resource owners.” Because every would-be DERP has to work through a scheduling coordinator, it’s hard to know which of Olivine’s clients might be involved in the company’s application.
Olivine is also involved in the Demand Response Auction Mechanism, or DRAM, pilot program, which has so far put together more than 100 megawatts of DER resources from companies including Stem, Advanced Microgrid Solutions, EnergyHub, Ohmconnect and AutoGrid. CAISO’s report notes that Olivine is “considering the addition of distributed energy resources and the potential conversion of storage and electric vehicle assets currently participating as demand response resources,” indicating that some of these DRAM clients could also be eyeing their potential as DERPs.
CAISO just published its “new resource implementation process” on its DERP website this week, opening up the potential for more applications.