A California First: Enlisting Distributed Energy for the Transmission Grid
PG&E and California’s grid operator want solar, batteries, demand response and efficiency to be as reliable as a diesel-fired power plant and transmission lines.
California is already hosting several pilot programs to evaluate how distributed energy resources can help utilities at the level of their sprawling, low-voltage distribution grids. Now, the state is exploring how local clean energy resources can support reliability at the transmission level too.
On Wednesday, Pacific Gas & Electric and California grid operator CAISO unveiled a plan that seeks to proactively deploy DERs — including solar, batteries, smart thermostats and other passive or active energy assets on the grid edge — as an alternative to fossil fuel generation and transmission-scale infrastructure.
In a first-of-a-kind agreement, PG&E and CAISO will seek over the next five years to contract for enough DERs to replace an aging power plant in Oakland, Calif., without building new transmission lines that would otherwise be needed to keep the entire state’s grid running reliably.
Wednesday’s press conference in Oakland focused on the local clean energy jobs and economic opportunities to come from the project, as well as its innovative structure, which will see PG&E contract for between 20 and 40 megawatts of DERs under a request for proposals process, slated to start after CAISO finalizes its own transmission investment plans in March.
PG&E hasn’t put a dollar value on the project, or how much it intends to pay for the DERs it will procure, since it’s hoping to receive a range of competitive bids. But several speakers at Wednesday’s event, including California State Assemblyman Rob Bonta, noted that the plan involved $40 million to be invested in local clean energy.
This isn’t the first big DER investment by a California utility. Southern California Edison and San Diego Gas & Electric have collectively contracted for hundreds of megawatts of solar,storage demand response and efficiency as part of their plans to replace the San Onofre nuclear power plant. SCE recently announced another DER procurement to help it mitigate reliability issues in the Santa Barbara region. And all three investor-owned utilities have started pilot projects under the California Public Utilities Commission’s distribution resources plan (DRP) proceeding, meant to integrate DERs into how utilities maintain and upgrade their distribution grids.
That’s because when it’s fired up under its must-run reliability contractual obligations, it’s running to prevent a so-called “n-minus-one” event — a sudden outage, a generator going offline, or other unpredictable yet inevitable contingency — from sending the statewide system into instability, he said.
U.S. grid operators spend hundreds of millions of dollars per year on transmission system upgrades and extensions to manage these kinds of problems. And they’re understandably leery of alternatives, given that plans made today affect grid reliability more than half a decade in the future.
But in the year since PG&E first brought its proposal to CAISO, the two have come to an understanding on how to put DERs in play in an alternative solution, to do “things that have never been done before,” he said.