Tuesday, December 18, 2018

California Awarding $45 Million for Microgrids

By Jason Fordney

Sacramento, Calif. — California is offering $45 million in grants for the development of microgrids on a variety of siting categories to stimulate development of new distributed energy resources.

California Energy Commission staff on Thursday gave curious developers both broad guidance and more practical advice regarding the program, which has wider parameters than a similar solicitation two years ago. Energy officials see DER such as microgrids, energy efficiency, energy storage, electric vehicles and demand response as increasingly critical to help manage renewables.

california distributed energy resources

Gravely | © RTO Insider

“The goal of it is to allow creativity” and demonstrate both the technology and a business case, not “science projects,” CEC Deputy Division Chief Mike Gravely said. “Obviously we are looking for a project that has commercial viability and a potential for future success.” The commission is hoping to develop a standard configuration that can be adopted on a wider scale, and to define methodologies to evaluate their benefits. It is also important to identify a market where they can function, he said.

The application deadline for the funding opportunity is Oct. 20, with awards anticipated to be announced next January and associated agreements beginning in June 2018. The commission is due to approve the awards in March.

Successful projects must be designed to be permanent and must advance technology while helping the state meet its clean energy goals. Projects fall within three program areas: applied research and development, technology demonstration and deployment, and market facilitation.

Projects to be funded are divided into three siting categories: $22 million is allocated for microgrids on military bases, ports and tribal lands; $12 million for projects in low-income areas; and $11 million for local communities, rural areas, industrial complexes and local schools.

The minimum award amount for a single project is $2 million and the maximum is up to $7 million. Developers must obtain matching funds equal to at least 20% of the award amount if it is $5 million or less, and 25% if the award is $5 million to $7 million. Match funding can include cash, equipment, materials, information technology services, travel, subcontractor costs, labor and other expenses.

california distributed energy resources

CEC is Accepting Applications Until October 20 | © RTO Insider

CEC manages the money collected through the Electric Program Investment Charge (EPIC), a retail ratepayer surcharge. The purpose of the EPIC program is to benefit customers of the state’s three investor-owned utilities — Pacific Gas and Electric, San Diego Gas & Electric and Southern California Edison — by investing in clean energy projects that promote reliability and lower costs. Projects that leverage other funds such as federal support will be given priority, and they must be in IOU territory.

Most of the projects funded following a 2015 solicitation are at the point where equipment is being installed and the systems are fully operational, “thus facilitating the collection of valuable data on performance, value streams and reliability,” CEC said in the grant funding opportunity. In the first round of funding, the state received 40 proposals from which it picked seven winners. The commission said the facilities “are providing a wealth of information on microgrid configurations, interconnection of different DER through a single controller, and system interconnection challenges.”

The earlier funding includes $5 million for a low-carbon community microgrid at Humboldt State University and a microgrid automation project at a community college. San Diego Gas & Electric received $5 million for a photovoltaic microgrid and another $5 million funded a microgrid at the Laguna Wastewater Treatment Plant. Overall, the state has awarded $470 million to 279 projects with $223 million in matching funds, which CEC highlights in its online Energy Innovation Showcase.

The discussion showed what CEC has learned. Sometimes projects don’t work or cease operation the day state funding ends — undesirable outcomes that have even led to equipment appearing on the eBay website.