Distributed Energy Resources

CAISO OKs utility plan to replace plant with DERs, system upgrades

The California Independent System Operator recently signed off on a plan under which Pacific Gas and Electric Company will implement substation upgrades and solicit distributed energy resources as a way to clear a path for the retirement of a decades-old fossil fuel power plant in Oakland, Calif.

PG&E on March 23 said its Oakland Clean Energy Initiative “will provide a green and innovative option” that uses local clean-energy resources, including energy storage, energy efficiency and electric-system upgrades, to ensure transmission grid reliability in Oakland when the power plant is retired.

PG&E will open a two-month request-for-offers process this spring to invite providers of distributed energy resources to propose innovative and competitive solutions for the portfolio.

"The Oakland Clean Energy Initiative represents an innovative, tailored portfolio of distributed clean energy resources combined with traditional transmission substation upgrades that meet the local reliability needs in this area of Oakland, enabling the retirement of the aging, jet fuel-powered plant," said Roy Kuga, vice president of Grid Integration and Innovation for PG&E.

CAISO has a reliability must run contract with the existing plant's owner, Dynegy, to purchase power during peak periods.

In spring 2017, the system operator identified the 40-year-old plant's eventual retirement as a risk to local transmission reliability, and said it would consider alternatives including new transmission lines through heavily populated areas of Oakland, a new fossil-fuel plant or a portfolio of local clean resources.

PG&E and CAISO worked collaboratively over the last several transmission-planning cycles to study how distributed clean energy resources could become part of the solution, Kuga said.

The grid operator determined in its transmission plan that the Oakland Clean Energy Initiative would be a clean and affordable option to new transmission or a new fossil-fuel facility, PG&E said.

With the CAISO decision, PG&E will move forward to upgrade existing substations and develop new clean-energy resources in Oakland to provide an alternative to the generating facility.

The initiative would mark the first time that local clean-energy resources are proactively deployed as an alternative to fossil-fuel generation for transmission reliability in PG&E's service area, according to the utility.

PG&E said it will continue to collaborate with community choice aggregator East Bay Community Energy to determine and meet the clean energy and reliability needs of local customers.

Depending on the exact resource mix, the market solicitation is expected to result in 20 to 45 megawatts of clean energy resources.

PG&E said it will seek cost recovery for the battery storage with the Federal Energy Regulatory Commission, and for other distributed energy resources with the California Public Utilities Commission.

PG&E expects to make its filing with the state commission by the end of 2018 and the Oakland Clean Energy Initiative has a forecasted in-service date of mid-2022.