CAISO defers proxy demand response resource sought by storage companies

Dive Brief:

A proceeding at the California ISO is looking at introducing new products to the state’s grid in order to better manage generation oversupply and solar curtailments.
Energy storage stakeholders such as the California Energy Storage Alliance, eMotorWerks, Stem and Tesla are pushing for a bidirectional Proxy Demand Resource (PRD) product that would allow storage resources to consume excess load on direction from an ISO dispatch.
CAISO says consideration of a PDR product is now likely to be deferred to a third phase of its proceeding as the grid operator assesses the limits of battery resources and other multi-use storage issues.

Dive Insight:

CAISO is preparing to present the results of its Energy Storage and Distributed Energy (ESDER) Phase 2 initiative to its board in July, but is expected to defer consideration of a PDR product until phase three of ESDER.

CAISO say it wants to better understand the limits of non-generator resources and wants to move consideration of a PDR product to its multiple-use applications initiative related to storage.

The grid operator said in a draft proposal the comments it has received fall broadly into two camps, with energy storage advocates expressing strong and urgent support for the development of a bi-directional PDR product. Other stakeholders said CAISO should give the issue more time to coordinate with the state’s PUC and better understand the retail bill impacts of using customer-sited storage to consume excess load.

The grid operator said PG&E's excess supply pilot helped inform the PDR effort.

"Two particular challenges PG&E highlighted in their presentation were 1) the impacts of participation on the customer’s retail bill (i.e. how demand charges are affected), and 2) how to ensure directed load consumption actions do not create operational and congestion problems on the distribution system," ISO officials wrote in the draft proposal.

The central focus of CAISO’s ESDER initiative is to lower barriers and enhance the ability of storage resources of all sizes to participate in the CAISO market. The push for a PDR resource comes as the state experiences more frequent instances of solar overgeneration at midday, driving down power prices and creating a steep afternoon ramp.

CAISO noted that the “number and diversity of these resources are growing and represent an increasingly important part of the resource mix. Integrating these resources will help lower carbon emissions and add operational flexibility.”