IEEE Power & Energy Magazine - March/April 2022 - 24

As these mitigation strategies multiply, there is a need to
balance decarbonization strategies with maintaining the
reliability and resiliency of the grid.
opportunities for DER-based NWA solutions as a result of
1) climate-related events, such as heat storms and wildfires;
and 2) climate change mitigation strategies, such as regulatory
requirements for deployment of clean energy generation
and electrification initiatives to replace natural gas end-use
equipment. This article explores how climate change impacts
are changing the value proposition for DERs in terms of
overall increased value, and specifically the increased value
that DERs can provide in NWA applications.
The deployment of climate change impact mitigation
strategies is causing serious challenges to maintain the reliability
and resilience of California's electrical power system.
Mitigation strategies such as the increased deployment of
clean energy generation to meet California Renewable Portfolio
Standards (RPS) of 60% carbon-free resources by 2030
and 100% by 2045, with largely intermittent resources like
solar and wind, have significantly altered the state's system
supply profile. In the summer months, these impacts are
characterized by 1) an abundance of renewable energy in the
morning and early afternoon hours, 2) a dramatic " ramping "
period from 3 to 6 p.m. caused by decreasing renewable
energy supply coupled with increasing demand driven
by cooling loads, and 3) a capacity-constrained peak period
between 6 and 9 p.m. This problem is amplified by frequent
and prolonged climate-induced high-temperature events,
resulting in escalating cooling loads that cause additional
stress on the grid.
Mitigation strategies, such as electrification of cooling
equipment, water heaters, and vehicles, are adding demand
to the grid resulting in increased system strain unless these
devices are operated flexibly. As these mitigation strategies
multiply, there is a need to balance decarbonization
strategies with maintaining the reliability and resiliency of
the grid. A key theme of this article is to demonstrate how
regulatory policies, valuation methodology enhancements,
and DER deployment strategies can support decarbonization
initiatives while providing NWA benefits of resiliency,
reliability, and transmission and distribution (T&D) capacity
upgrade deferral services.
This article reviews 1) the current NWA landscape in
California, 2) the impacts of climate change on electrical
system requirements and planning, 3) an overview of valuation
frameworks for distribution upgrade deferral, resilience,
and reliability from NWAs, and 4) and discusses the
regulatory policy and valuation methodology enhancements
needed to capture the full value and increase deployments of
DER-based NWA strategies.
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ieee power & energy magazine
California NWA Landscape
The following sections provide an overview of the NWA landscape
in California, including regulatory and planning processes
for deferring distribution upgrade investments and resiliency
measures, completed project summaries, and current procurement
methods for grid services provided by NWA projects.
Regulatory Frameworks for
Distribution Deferral
Growth in DER installations has increased dramatically
among residential, commercial, and industrial consumers
throughout California in recent years. They have purchased
rooftop solar, electric vehicles, energy storage systems, smart
thermostats, and other grid-enabled devices without significant
central or localized planning. This has resulted in variable
localized grid impacts, and California's utilities have
sought out various mechanisms to help balance the distribution
system with customer-sited DERs.
To begin addressing the need for more central and localized
planning of DERs in NWA appl icat ions, the Ca l ifornia
Public Utilities Commission (CPUC) launched
the Distribution Resource Plan proceeding in 2014 to identify
strategies to incorporate DERs into IOUs grid investment
planning processes. The result included the Distribution
Investment Deferral Framework (DIDF), wherein utilities
perform an annual review of their five-year grid investment
priorities and identify those projects that could be replaced
or deferred through DERs. The identified projects are then
ranked into " tiers " of potential deferral opportunity based on
cost-effectiveness, forecast certainty, and market assessment.
Projects in Tier 1 are considered the best candidates for NWAs
because they have the best chance of deferring investment for
10 years. Once projects are selected and ranked, the investorowned
utility (IOU) conducts a request for offers (RFO) to
select projects to be awarded and developed.
Across all three of California's electric IOUs-Pacific
Gas & Electric (PG&E), Southern California Edison (SCE),
and San Diego Gas & Electric (SDG&E)-31 projects were
proposed involving over 100 MW of capacity. Two have
been completed to date, and 11 were canceled or were not
awarded a contract. Projects were canceled either because
the substation was in a wildfire burn area or load forecast
resulted in the specification of traditional distribution
upgrades. The IOUs did not award contracts for other proposed
projects because no subset of offers met the project
requirements or the proposed project was deemed not to
be cost-effective.
march/april 2022
IEEE Power & Energy Magazine - March/April 2022

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