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Energy Storage --Enabling California’s Renewable Future

James Loewen

Energy Division California Public Utilities Commission

RomeApril 28, 2015

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This talk

• California’s growth in renewables

• How to accommodate high penetration of renewables?

• California’s storage agenda

• The Self-Generation Incentive Program (SGIP)

• What policies will help maximize storage benefits to the grid?

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Growth in renewables

• Utility scale: Renewable Portfolio Standard (RPS)• 2010 – 20% of the grid• 2020 – 33% • ? 2030 – 50%

• Customer scale:• California Solar Initiative (CSI) 1750 MW• Net Energy Metering (NEM)• “New NEM” phasing in starting in 2017

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Rooftop solar costs have come down steadily

www.californiasolarstatistics.com

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NEM capacity as percent of aggregate customer peak demand (coincident)

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Successful obsolescence: Rooftop solar doesn’t need CSI anymore

2014 installations:

• CSI (up-front rebate): 16,000

• NEM (rate structure): 67,000

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California Independent System Operator (CAISO): April 22, 2015

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How to accommodate high renewables

penetration?

• Gas-fired

• Ramps too slowly

• Too many GHGs

• Sculpt demand

• Time of use (TOU) rates

• Demand response (e.g. critical peak pricing)

• Storage

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How can storage help the grid?

• Assist renewable energy integration to reduce GHG.

• Optimize the use of variable, intermittent, and off-peak electrical generation.

• Avoid or defer new peaking power plants

• Avoid or defer new distribution & transmission upgrades.

• Provide ancillary services.

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California Storage Policy Framework

• AB 2514 law (2010) mandates CPUC storage policy and targets.

• CPUC (2013, D.13-10-040) adopts investor-owned utility (IOU) targets for 2020:

– Transmission: 700 MW

– Distribution: 425 MW

– Customer-side: 200 MW

• AB 327 law (2013) mandates annual “distribution resource plans” (DRPs).

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Annual DRP filings (first is due July 1, 2015)

• Each investor-owned utility (IOU) proposesoptimal locations for DERs:– Evaluate costs and benefits of distribution

resources, including infrastructure costs, safety benefits, reliability benefits

– Propose contracts, tariffs, etc.

– Identify relevant CPUC proceedings

• CPUC to review/modify/approve the DRPs

• Costs to be collected in future rate cases.

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Non-DRP example – 2014 SCE LCR RFO

• Southern California Edison (SCE)

– The SONGS (nuclear plant) gap

• Local Capacity Reliability (LCR) RFO yielded 2220 MW:

– 1700 natural gas fired

– 50 PV

– 130 energy efficiency

– 75 demand response

– 260 storage • 160 customer side of the meter

• 100 utility side of the meter

Self-Generation Incentive Program (SGIP)

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• Customer-sited distributed energy resources

• Rebate program• Up front lump sum• Performance based incentive (PBI)

• Goals of SGIP• Reduce peak load demand (historical goal from inception in 2001)• Reduce greenhouse gas emissions (per SB 412 in 2009)

• Budget• $83 Million program budget per year • SGIP Program authorized through 2020

SGIP Technologies

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SGIP storage rules

• SGIP storage incentives have been fairly simple. • < 30 kW – lump sum (related to power capacity)

• > 30 kW – requires minimum use per month

• SGIP in the future

• Incentivize location placement or day/time dispatch?

• What about interface with DR tariffs?

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Optimizing storage: dimensions to the analysis

• Scale: transmission/distribution/customer

• Which service? Power, VARs, voltage support, frequency regulation, etc.

• Location: locate only where needed?

• Time (day, hour): dispatch only when needed?

• Paired with DER/rooftop solar or stand-alone?

• Who owns?

• Who dispatches?

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Ownership and dispatch

• Ownership:

– Grid-sited: owned by utility or third party.

– Customer-sited: owned by host customer or third party or utility (e.g. Arizona rooftop solar)

• Ownership doesn’t pre-judge who dispatches

• Dispatch controlled:

– Centrally (utility/ISO) (e.g. via long term contract)

– Independently (market prices or tariff incentives)

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Grid-sited Host customer-sited

Utility-owned • Utility dispatch • Utility dispatch

Host customer-owned (HCO)

• NA • HCO responding to market price or tariff.

• Utility dispatch

Third party-owned (TPO)

• TPO responding to market price or tariff.

• Utility dispatch

• TPO responding to market price or tariff.

• Utility dispatch

Controlling dispatch: who and how?

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james.loewen@cpuc.ca.gov

Thank you.