PG&E Announces Energy Storage RFI

by Wilson Sonsini Goodrich & Rosati

Pacific Gas & Electric Company (PG&E), an investor-owned utility serving customers across Northern California, recently released a Request for Information (RFI) regarding energy storage. PG&E seeks knowledge about various energy storage technologies and guidance on evaluating those technologies in any future PG&E solicitations.

While the RFI targets technologies across the energy storage landscape, the utility‘s operational focus is on flexibility and dispatchability to meet the growing challenge of renewable resource integration. Ideal resources will be capable of:

  • high utilization rates,
  • multiple starts and stops per day,
  • short dispatch times allowing the resources to reach full operation in a matter of seconds or minutes, and
  • the ability to adjust output rapidly from maximum to minimum.

The RFI requests technical data based on actual projects, but does not require participants to present complete project proposals. Evaluation of the information received will be based on each project’s costs compared to revenues. A wide variety of characteristics may be considered in this evaluation, including operational flexibility, efficiency, ancillary service revenues, ability to defer upgrades, maintenance requirements, fuel costs, build times, emissions, and project location or mobility. PG&E will perform evaluations for both wholesale and distribution applications.

There are a number of reasons behind PG&E’s decisions to begin this serious investigation into energy storage opportunities. The most significant motivator is the continued increase in variable renewable generation on the PG&E system. Earlier this year, the California Public Utilities Commission (CPUC) announced that PG&E had achieved the state requirement of 20 percent renewable generation, and SB 2X requires PG&E to generate 33 percent of its electricity from renewable sources by the year 2020. This means that significant new renewable generation will be coming on line in the near future, with much of it likely to be in the form of variable wind and solar resources. Energy storage technologies with the characteristics PG&E is looking for will help to balance this growth in variable renewable resources and ensure a stable supply of power to the electricity grid.

Two separate CPUC proceedings should give PG&E the opportunity to use energy storage to address this increase in variable resources. First, the CPUC’s Long-Term Procurement Plan (LTPP) proceeding (R. 12-03-014) may authorize PG&E to procure flexible capacity through storage technologies. In addition to the LTPP, the CPUC recently issued D. 12-05-037 to provide ongoing support for the development and deployment of clean energy technologies through the Electric Program Investment Charge (EPIC). EPIC will provide PG&E with annual funding for technology demonstration and deployment programs, including potential energy storage projects.

Regardless of the growth in variable renewable generation, PG&E may be forced to adopt energy storage technologies. In 2010, the California Legislature passed AB 2415, which gave the CPUC authority to set energy storage procurement targets (see prior WSGR Alerts on this topic here and here). The CPUC already has begun investigating the viability of energy storage targets through a rulemaking proceeding (R. 10-12-007). If the CPUC sets energy storage compliance targets, the first compliance deadline would be in 2015, with a second deadline in 2020. With this potentially short timeline to begin developing energy storage, PG&E would be well-served by the technological and market information gathered in the current RFI process.

For those interested in participating in the RFI, PG&E will hold a webinar on November 7, 2012 (participants must register by November 5). Information provided by RFI participants is due on November 30, 2012, at 12:00 p.m. Pacific time. For those participants providing complete information, PG&E plans to offer meetings to discuss the participants’ evaluations and provide guidance on participating in future Requests for Offers. Those meetings would begin in mid-February 2013. Additional information on the RFI is provided via the Power Advocate site.

To learn more about this opportunity or related matters, please contact Todd Glass, Peter Mostow, Sheridan Pauker, Paul Vercruyssen, or another member of Wilson Sonsini Goodrich & Rosati’s energy and clean technology practice.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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