Power Outages: The New Normal in California

On Wednesday, October 9, 2019, PG&E turned off power for over 800,000 Northern California customers, many of whom remained without power for 3 days. In light of increased wildfire risks, California’s major electric utilities (including PG&E, SCE, and SDG&E) are now asking their customers to be prepared for planned outages that could last for days at a time. Under dry, high-wind weather conditions, these utilities are turning to Public Safety Power Shutoff (PSPS) events as a means of mitigating these fire risks. During these PSPS events, the utility company will de-energize the transmission lines in high-fire threat regions, impacting all of the electricity customers served by those transmission lines. The prospect of continued PSPS events are leaving communities wondering how they can manage through outages that could last for days at a time.

A New Incentive Opportunity for Schools, Cities, and Water Agencies in Disadvantaged Communities

California’s Self Generation Incentive Program (SGIP) is a long-standing incentive program designed to support the deployment of distributed energy resources, including battery energy storage systems. In their recent decision (D.19-09-027) the California Public Utilities Commission (CPUC) made several new changes to the program designed to support battery energy storage deployment in Disadvantaged or Low-Income Communities. Under the terms of this program, schools, cities, and water agencies in Disadvantaged Communities (defined as any census tract that ranks in the top 25% most affected census tracts in the most recently release version of CalEnviroScreen3.0.) can receive up to $0.85 per Wh towards the cost of a battery energy storage project which will cover most of the cost of the project.

Time is of the essence!

This program opens April 1, 2020

and is likely to be fully subscribed shortly after opening

The Benefits of Battery Energy Storage Systems

When deployed at your facilities, battery energy storage systems can provide two substantial types of benefits:

Financial Benefits

  • Reducing costs through lowering your demand charges
  • Earning revenue through participating in Demand Response Auction Mechanism (DRAM) and other grid services programs

Backup Power Benefits

  • When coupled with solar and the proper switching & controls, batteries can be used to form a microgrid that can provide backup power to your facilities in the event of a grid outage.

 

There Are Risks!

While this incentive program presents a strong financial opportunity, there are substantial risks associated with battery energy storage project deployment that must be properly addressed, including:

  • Contract risk exposure (such as installer sided terms and thin performance guarantees)
  • Interconnection and other utility issues (that lead to severe delays and cost overruns)
  • Outsized administrative burden (taking precious time & energy away from your team’s mission)

 

TerraVerde’s Independent Advisory Services

TerraVerde Energy has the experience and expertise needed to capitalize on the SGIP incentive opportunity, while mitigating these project deployment risks. Our turnkey project development services include the

  • comprehensive due diligence
  • investment grade energy and financial analysis
  • fully transparent competitive solicitation process
  • effective project implementation management

necessary to deliver successful energy storage programs. As independent advisors, TerraVerde provides the objective expertise and project development experience needed to deliver projects at the highest possible value.