Anticipating Triple Digit DER Growth, California Launches New Action Plan

Aug. 6, 2021
Anticipating that installation of some DERs will grow as much as 770 percent before the end of the decade, California is developing a sweeping action plan to improve policies, programs and incentives.

In a move that could affect microgrids, the California Public Utilities Commission is developing a sweeping DER Action Plan aimed at revamping policies, programs and incentives.

The commission in 2016 approved its first DER Action Plan, which served as a five-year roadmap for coordinating activities across commission proceedings aimed at advancing distributed energy resource policy and reforming utility distribution planning, investment and operations.

Since then, California adopted a goal of getting all its electricity from emissions-free sources by 2045 and the state leads the U.S. in DER development, the commission said in a draft DER Action Plan 2.0.

“DER Action Plan 2.0 seeks to maximize the ratepayer and societal value of millions of DERs on the grid, while ensuring affordable and equitable rates,” the commission said in the draft plan, released late last month.

In the new plan, the commission will take up accelerated transportation and building electrification, microgrids and resiliency, flexible loads and dynamic rates, and equity and affordability, the commission said.

The commission said consulting with native tribes will help advance the new plan, “particularly given the increase in public safety power shutoff events, expansion of tribal microgrid projects, and the need for expanded rural [electric vehicle] infrastructure.”

Microgrids are considered a form of DER, but also contain DER technologies, such as solar, energy storage and generators. So state policies aimed at DERs often directly impact their development.

PUC expects surge in DERs

California is headed towards the rapid deployment of DERS, according to the commission. The agency expects by the end of this decade California’s rooftop solar will grow by 230 percent, its on-site energy storage will soar by 770 percent and the state’s fleet of electric vehicles will surge by 370 percent, driven by technological advances and price declines.

“The DER Action Plan 2.0 is intended to coordinate development and implementation of policy related to DERs, not to determine outcomes of individual proceedings,” the commission said.

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Plan sets up four regulatory tracks

The plan calls for tackling DER issues under four broad regulatory tracks: load flexibility and rates, grid infrastructure, market integration and DER customer programs.

The load flexibility and rates track is focused on improving demand-side resource management using more effective, integrated demand response and retail rate structures that promote widespread, scalable, and flexible load strategies enabled by electrification and DER deployment.

Under the market track, the commission aims to remove barriers to DER participation in the California Independent System Operator’s wholesale power markets. The agency also wants to make sure DERs are paid for the various services they can provide to the wholesale market, the distribution system and to customers, according to the draft plan.

The plan calls for increased planning efforts by the state’s electric utilities to make sure the electric distribution system can handle a growing amount of DERs and that communities are involved in the process.

The public utilities commission said it plans to work closely on DER issues with the California Air Resources Board, the California Energy Commission and the California Independent System Operator.

A public workshop will be held on the draft plan on Aug. 26, and the PUC is taking comments on the proposal until Sept. 10.

California Governor pushes for more DERs

Separately, Governor Gavin Newsom last week signed an emergency proclamation to speed development of clean energy projects and reduce demand on the state’s electric grid during extreme weather this summer, as heat and wildfires force power shutdowns. As part of the effort, Newsom has put forward a roadmap that includes modernizing the grid and incorporating DERs.

Among other things, the plan envisions:

  • Strategic placement of  “remote grids” in communities more vulnerable to wildfires
  • A less centralized, more distributed grid where flexibility will be a key attribute
  • Electrification of transportation

To accelerate progress this summer, Newsom’s proclamation eases certain permit and approval requirements for emergency generators, demand response programs,  energy storage and clean energy projects. Newsom also created new incentives for demand response participation and requirements that utilities allow customers in the program to shift to back up generation during emergency conditions.

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About the Author

Ethan Howland

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