California bill would mandate virtual power plant plan

California State Assembly member John Harabedian, of Pasadena, has introduced bill AB 740, aimed at supporting VPPs in California.

VPPs comprise small-scale, “distributed” energy resources including rooftop solar, battery energy storage systems, bidirectional electric vehicle (EV) chargers and more. Their aggregated resources support a flexible, resilient grid that can adapt readily to shifting electricity demand on a more localized basis than centralized power can. Flexible energy resources can dispatch power, or reduce power usage, from specific locations at peak electricity demand hours, delivering high-value electricity when it is needed most.

“As Californians face high energy bills, virtual power plants offer a simple solution – using clean energy [that is] already in our homes to stabilize the grid, lower costs, and strengthen our future,” said Harabedian. “I’m proud to partner with [trade body] Advanced Energy United and [nonprofit] Environment California to make energy cleaner and more affordable in our state.”

The bill would:

• Require the California Energy Commission (CEC) to perform electricity cost and rate reduction modeling in its biennial Integrated Energy Policy Reports (IEPRs).
• Mandate the CEC to submit a VPP implementation plan to the legislature, with goals and milestones as part of the IEPR.
• Require investor-owned utilities (IOUs) to report annually on their progress toward meeting the state’s load shift goal.

A report from economics consultancy the Brattle Group has estimated VPPs can save California $750 million per year on electricity costs while advancing distributed clean energy adoption. Of the $750 million in savings, just under $200 million would be needed for the implementation of distributed energy resource management systems to operate the VPP, as well as marketing and administrative costs to launch the program and reach customers.

The balance of the projected savings would be passed on to customers.

Over the last decade, the United States has spent more than $120 billion on 100 GW of new generation capacity, mainly for grid resource adequacy. The Brattle Group estimates, nationwide, utilities could save $35 billion by 2033 by focusing on VPPs to serve peak demand on the grid.

California electricity prices are roughly double those of the national average in the United States, making affordability a crisis for Californians.

“California is undergoing an electricity affordability crisis and virtual power plants are a key tool that can drive down costs for everyone by leveraging technologies already found in people’s homes and businesses,” said Edson Perez, California lead at Advanced Energy United.

From pv magazine USA.