Dive Brief:

• Oct. 26 was the deadline for aggregators in California to submit bids to the state's investor-owned utilities under new demand response market rules, Greentech Media reports.
• The Demand Response Auction Mechanism (DRAM) will allow a wide range of resources, from customer battery storage to electric vehicles, to bid into wholesale markets for demand management. For the first time, aggregations of customer-sited resources of at least 100 kW will have access to the state's electricity markets. 
• While the state has set a minimum DRAM target of just 22 MW between the three largest utilties, Greentech reports the intial proposals will likely far exceed that number as a wide range of new players and established companies attempt to get involved.

Dive Insight:

California has been focused on how best to incorporate distributed resources, and aggregators will make bids to the largest investor-owned utilities in an attempt to bring a more diverse set of demand-side resources into wholesale markets. 

By enhancing the grid's capability to decrease load during peak demand times, the state hopes to avoid building and utilizing natural gas peaker facilities and ease its transition to 50% renewable resources by 2030, a goal set by new legislation this year. 

Pacific Gas & Electric will target at least 10 MW of DRAM contracts; Southern California Edison will also target 10 MW; while San Diego Gas & Electric has a target of 2 MW. For each utility, at least 20% is expected to come from the residential sector.

While those are not huge numbers, Olivine CEO Beth Reid told Greentech Media she anticipates bids far in excess of the minimum resources to be acquired. Olivine will work to coordinate bids with the California ISO, the state's grid operator.

“Based on the conversations I’ve had, I think there will be a significant number of bids, more than were anticipated,” Reid said. "There are a lot of players who at least want to try it."

In September, Stem Inc. successfully bid aggregated customer storage systems into the CAISO real-time market using Olivine technology, as a demand response resource, part of a pilot program testing integration of the new resources. What to the wider grid looks like a reduction in demand can in fact be battery storage serving a client load, the company said.

“We're sending energy to serve the clients' load, so it looks to the grid like load going down,” Ted Ko, Stem's director of policy, told Utility Dive last month. “It's a new form of demand response, but it looks to the grid like demand response.”

Stem, along with EnerNOC, SolarCity and Tesla are all expected to submit proposals, GTM reports.