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Advocacy Update – November 2020: SB 1477 Update, Adding Storage to The Grid
SB 1477 Update
Existing law authorizes the California Public Utilities Commission (CPUC) to allocate up to 15 percent of revenue from the sale of natural gas to support clean energy and energy efficiency projects.
In Sept. of 2018, Governor Jerry Brown signed SB 1477, significant legislation related to reducing greenhouse gas emissions. The initial funding for SB 1477 is $50MN per year for four years. The source of the revenue is provided by the CPUC, using the funding mechanism described above. SB 1477 contains two significant initiatives, TECH and BUILD. The Building Initiative for Low-Emissions Development (BUILD) program intends to provide incentives for deploying near-zero-emissions building technologies that reduce GHGs. Its primary focus is on new construction. The Technology and Equipment for Clean Heating (TECH) program will concentrate on advancing the adoption of heat pump technologies in residential applications. TECH is directed more towards the existing building stock and will include rebates and contractor training and education as part of its structure. TECH will launch in Mar. of 2021.
Earlier this year, the CPUC sent out a request for proposals (RFP) for TECH. Several parties responded to the RFP for TECH and anxiously awaited the results. In Nov. 2020, the CPUC announced that Energy Solutions would be the new program implementor for TECH. We want to congratulate Energy Solutions and its partners and look forward to learning more about the program as it gets closer to roll out.
Adding storage to the grid
California relies on a third-party to manage the flow of electricity on the electrical grid. The California Independent System Operator (CAISO) is responsible for maintaining reliability and the electrical grid's overall operation.
The electrical distribution grid in CA does not have reserve capacity. The result is electrical generation is continually adjusted to match the demand. If the CAISO gets it wrong and doesn't have enough capacity to meet demand, the results are brown-outs or supply shortages during high use periods. On the other hand, if they add too much generation, we have to curtail (cut off) the electricity generated by another source. Typically, this means adjusting for the oversupply by curtailing energy from less flexible sources, such as wind or solar. Currently, the state routinely curtails electricity from renewable sources when generation outpaces demand. For those of you who are energy geeks, you can see the capacity, demand, and generation mix in real-time on the CAISO website.
On Nov. 19th, CAISO sent out a press release announcing that the Board had approved Hybrid Resources Phase 2, a plan to accommodate more than 1,500 megawatts (MW) of battery storage to the grid by the end of next year. The state has set a goal of 3,300 MW of battery resources by 2023. Their decision means that California is well on the way to having a modern electrical distribution grid that includes storage. Adding storage to the electrical grid is a critical component to GHG reduction as it will allow renewable energy to play a more significant role in carbon-free electrical generation.