by Kadir Bedir, California Energy Commission
Grid emergencies may have dire consequences for society and the planet. Economy, political stability, and achieving climate goals can be greatly impacted as these events adversely affect consumers’ attitudes towards electrification and renewables. In California, the risk is evident. The record-breaking heatwaves and wildfire smoke are further exacerbating the air conditioning load, along with more frequent service interruptions due to public safety power shutoffs.
The good news is that we, the people, can certainly protect the grid from service interruptions and rate hikes by adjusting our collective behavior under the “right” market conditions.
Flexible loads are a widely available and cost-effective solution for building that much-needed climate resiliency on California’s grid. Flexible loads, such as space cooling, electric vehicle charging, refrigerated warehouses, and agricultural water pumping, are the low-hanging fruit that can be optimized and used as a grid resource.
The growing adoption of smart devices coupled with AI-based controls lays the foundations for load-modifying virtual power plants (VPP). VPPs can go beyond providing emergency load reductions and actively participate in energy markets for integrating renewables with predictive semi-autonomous controls.
Most existing VPPs in today’s market, such as the Tesla and Sunrun programs, are so-called power-generating VPPs in the form of behind-the-meter or utility-scale DERs with aggregated solar and battery. In contrast, flexible-load VPPs could solely manage the end-use loads without actual power generation.
OhmConnect, a California start-up targeting residential consumers, has a statewide VPP called Resi-Station, which participates in CAISO’s day-ahead energy market and earns capacity payments via the CPUC’s DRAM program. While the current model heavily relies on voluntary participation via text notifications, OhmConnect seeks a higher share of automated controls via smart plugs and smart thermostats. During the grid emergencies in August 2020, OhmConnect reduced energy usage by nearly one GWh and compensated customers $1 million to do so.
Can Locally-Owned VPPs be a Solution for Deep Demand Response?
Achieving deep demand response (DR) requires creating attractive market conditions for stakeholders, and most importantly, consumer participation. While gamification and earning points can motivate a segment of the consumers, can we promote a concept of “grid citizenship” locally to expand the demand-side participation to all sectors? This effort has been compared to curbside waste recycling programs. People seem to take action when their involvement benefits the local economy and environment. Can we achieve this kind of collective behavior by promoting locally-owned VPP programs?
Community choice aggregators (CCAs) have a lot to offer in this space. The amount of load served by CCAs is expected to reach roughly 72% by the mid-2020s, where another 15% is served by local municipal utilities (aka munis). The local CCAs and munis can effectively reach out to their customers and ensure that the local VPP programs will primarily benefit the local economy and power procurement while effectively reducing the participants’ utility bills.
For instance, an EPIC-funded project, Lead Locally with Sonoma Clean Power, has been a very successful model for showing CCAs’ potential in promoting electrification retrofits and decarbonization efforts. This program has created the Advanced Energy Center, a mechanism that simplifies efficiency upgrades by connecting consumers with vendors, local contractors, and the financial incentives under a one-stop showroom facility.
As an emerging industry stakeholder, CCAs need technical and financial support to set up their data infrastructure. The California Energy Commission has recently approved the fourth EPIC Investment Plan that guides the state’s grid R&D funding for 2021-2025. This plan includes a VPP initiative that can potentially demonstrate the CCA-involved VPP concepts while advancing the technology.
The future for demand response is bright. As a fellow state employee, I am very confident that the California state agencies will develop the enabling regulatory and market conditions within a few years so that consumers with smart thermostats or smart chargers can enroll in a VPP program of their choice. The recent rolling out of the utility TOU rates, CEC’s Load Management Standards, the VGI Roadmap, the CPUC’s Distribution Investment Deferral Framework, and CAISO’s FLEXmeter decision, along with many other policy and R&D efforts, are all part of this reformation.
About the Author
Kadir Bedir, Ph.D. is an energy R&D specialist within the Energy Efficiency Research Office at the California Energy Commission. His work focuses on identifying the industry’s R&D needs for flexible load integration and supporting the state’s Electric Power Investment Charge program. Kadir is an electrical engineer and holds an interdisciplinary Ph.D. from the Institute of Transportation Studies at UC Davis.
