IEEE Power & Energy Magazine - March/April 2022 - 31

of US$104/kW-year. The proposal for a resiliency adder
was criticized by utilities and consumer advocates both as
a concept and in total value. Utilities argued that despite the
clear resilience benefits of DERs, there was no proper way
to quantify system benefits (rather than just individual customer
benefits). The Utility Reform Network contended that
solar and storage " resiliency " does not avoid ratepayer costs.
Ultimately, the CPUC agreed that while there is a case to be
made for valuing resiliency, there was insufficient evidence
to explicitly include it in the ACC.
In summer 2020, the CPUC staff launched Track 2 of
its Resiliency and Microgrid Proceeding, an extensive proposal
describing barriers related to microgrid adoption with
resiliency valuation highlighted as a key objective. CPUC
staff suggested that resiliency is a special case of reliability,
noting that replacing aging distribution equipment would
be a " reliability " enhancement while actions taken specifically
to protect the system from flooding, wildfires, or other
extreme weather events would be a resiliency enhancement.
In this context, all NWAs provide system reliability benefits,
but only certain NWA applications provide additional resiliency
value. Microgrids are a specific application of DERs
often targeting resiliency as the main benefit, but without a
clear valuation framework, community microgrids are often
found to be not cost-effective. In summer 2021, the CPUC
held a series of workshops to discuss an evaluation framework
for resilience, showing continued progress but still not
arriving at a standardized methodology.
Summary
If climate change impacts in California, such as ongoing
drought, catastrophic wildfires, and heat storms, are
becoming the new normal, as many climate scientists suggest,
accounting for their impacts in valuation modeling
will result in a higher value of DERs supporting NWA
solutions. These values will accrue from continued high
peak energy prices, higher prices for RA as supply shortfalls
continue, high incentives for participation in ELRPs,
increasing the value of reliability and resiliency, and costeffective
deployment of DERs to defer distribution capacity
upgrades. In addition, these resources provide reductions
in CO2 emissions and support the continued deployment of
clean energy resources to combat climate change.
California is projected to experience supply shortfalls of
5 GW in 2022 and nearly 12 GW over the next five years.
Due to the short time needed to deploy DERs compared to
other supply options, DER-based NWA strategies can play
a key role in bridging the gap in the supply shortfalls while
providing reliability and resilience benefits to the grid.
While NWA solutions are not a new concept, implementation
of these solutions has been slow due to limitations in
current DER and NWA valuation methodologies as well as
the continued specification of wires-based solutions through
established legacy technology solutions and planning processes.
As valuation methodologies are enhanced and
march/april 2022
standardized to capture NWA values of distribution capacity
deferral value, resilience, and reliability, the resulting scale
of these solutions will serve to alleviate the perceived risk to
utility planners.
A recurring theme in this article is that a key challenge
facing DER-based NWAs, and the electrical system as a
whole, is the need to balance climate change mitigation measures
with the increasing need for grid resilience historically
provided by fossil-fuel generation and other legacy technologies-all
while maintaining stable retail rates to ratepayers.
Enhancements in valuation methodologies, alleviation of
utility risk concerns with third-party-provided NWA solutions,
and continued demonstration of these commercially
proven resources are critical steps to clearing the pathway
for the deployment of these solutions at scale.
For Further Reading
" Proclamation of a state of emergency, " Executive Dept., State
of California, 2021. https://www.gov.ca.gov/wp-content/
uploads/2021/07/Energy-Emergency-Proc-7-30-21.pdf
" Decision directing Pacific Gas and Electric Company,
Southern California Edison Company, and San Diego Gas &
Electric Company to take actions to prepare for potential
extreme weather in the summers of 2021 and 2022, " California
Public Utilities Commission, San Francisco, CA, USA, 2021.
https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/
energy-division/documents/demand-response/emergency
-load-reduction-program/decision_elrp_program.pdf
" Final 2020. Integrated Energy Policy report update volume
III California Energy Demand Forecast Update, " California
Energy Commission, Sacramento, CA, USA, 2021.
https://efiling.energy.ca.gov/getdocument.aspx?tn=237269
N. M. Frick, S. Lisa, and P. Snuller, " Locational value
of distributed energy resources, " Lawrence Berkeley National
Lab., Berkeley, CA, 2021. https://eta-publications.lbl.gov/sites/
default/files/lbnl_locational_value_der_2021_02_08.pdf
" Resolution E-5150. Adopts updates to the Avoided Cost
Calculator for use in demand-side distributed energy resource
cost-effectiveness analyses, " California Public Utilities
Commission, San Francisco, CA, USA, 2021. https://
docs.cpuc.ca.gov/PublishedDocs/Published/G000/M382/
K179/382179225.PDF
" The value of resilience for distributed energy resources:
An overview of current analytical practices, "
National Association of Regulatory Utility Commissioners,
Washington, DC, USA, 2019. https://pubs.naruc.org/
pub/531AD059-9CC0-BAF6-127B-99BCB5F02198
Biographies
Beth Reid is with Olivine, Inc., Berkeley, CA, 94704, USA.
Joe Bourg is with Olivine, Inc., Berkeley, CA, 94704,
USA.
Devon Schmidt is with Olivine, Inc., Berkeley, CA,
94704, USA.
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https://www.gov.ca.gov/wp-content/uploads/2021/07/Energy-Emergency-Proc-7-30-21.pdf https://www.gov.ca.gov/wp-content/uploads/2021/07/Energy-Emergency-Proc-7-30-21.pdf https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/demand-response/emergency-load-reduction-program/decision_elrp_program.pdf https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/demand-response/emergency-load-reduction-program/decision_elrp_program.pdf https://www.cpuc.ca.gov/-/media/cpuc-website/divisions/energy-division/documents/demand-response/emergency-load-reduction-program/decision_elrp_program.pdf https://efiling.energy.ca.gov/getdocument.aspx?tn=237269 https://eta-publications.lbl.gov/sites/default/files/lbnl_locational_value_der_2021_02_08.pdf https://eta-publications.lbl.gov/sites/default/files/lbnl_locational_value_der_2021_02_08.pdf https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M382/K179/382179225.PDF https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M382/K179/382179225.PDF https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M382/K179/382179225.PDF https://pubs.naruc.org/pub/531AD059-9CC0-BAF6-127B-99BCB5F02198 https://pubs.naruc.org/pub/531AD059-9CC0-BAF6-127B-99BCB5F02198

IEEE Power & Energy Magazine - March/April 2022

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