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  • Writer's pictureCorey L. Wilson

20 Things to Know About ENERGY Cost Savings For Facilities (19)

With the recent publication of the expanded and updated second edition of Energy Cost Savings For Facilities guidebook, there are 5 additional chapters to share, and below is the fourth of the five, new Chapter 19 – ENERGY Updates For DERs, Microgrids, SGIP & ESG Programs. Please look for the final chapter this Thursday. 19 – ENERGY Updates For DERs, Microgrids, SGIP & ESG Programs Distributed Energy Resources (DERs), which are defined as distribution-connected distributed generation resources, energy efficiency, energy storage, electric vehicles, and demand response technologies, are supported by a wide-ranging suite of California Public Utilities Commission (CPUC) policies. The passage of the California Global Warming Solutions Act of 2006 (AB 32) has amplified the need for intensive energy efficiency efforts across California. The California Air Resources Board’s (CARB) Draft Scoping Plan for AB 32 implementation states that while “California has a long history of success in implementing regulations and programs to encourage energy efficiency… [it] will need to greatly expand those efforts to meet our greenhouse gas emission reduction goals.” On average, 30 percent of the energy used by commercial buildings is wasted due to inefficiencies. California has taken this principle to heart and with three decades of leadership and innovation in the public and private sectors, California leads the nation, and perhaps the world, in developing and implementing successful energy efficiency efforts. Distributed Energy Scores Big Win in US Wholesale Markets with FERC Order 2222 The Federal Energy Regulatory Commission (FERC) in September 2020, issued Order 2222, its much anticipated ruling that paves the way for aggregated distributed energy resources (DERs) to compete alongside traditional power plants and other grid resources in wholesale markets. The landmark ruling was heralded in a commission news release as important to “help usher in the electric grid of the future” by removing “the barriers preventing distributed energy resources from competing on a level playing field in the organized capacity, energy and ancillary services markets run by regional grid operators.” Previous FERC Order 841 in 2018 opened wholesale markets to distributed energy resources in general, but Order 2222 in 2020 will now enable these resources to be bundled together into a single bidding entity, opening new possibilities and competitive opportunities. What’s Included in FERC Orders 841 and 2222 FERC’s expansive ruling opens the door to a wide array of technologies to participate. Aggregate resources can be located on a utility’s distribution system (or a subsystem) or on-site behind a customer’s meter. Bundled technologies can include energy storage systems (ESS), on-site renewables, energy efficiency, distributed and backup generators, electric vehicles and their charging equipment, and other energy systems common in microgrids. There is no practical limitation on the number of distributed technologies that can be networked together in this manner, and combinations of generation and load modulation can be deployed simultaneously into one unified market offering. Most notably, this new rule allows several distributed resources to aggregate to satisfy minimum size and performance requirements that they might not be able to attain individually, meaning aggregation can open access to any and all DERs located in competitive markets. FERC Order 2222 upholds previous determinations that allow resources connected to the distribution grid to serve both retail and wholesale markets, but also directs grid operators to include “narrowly designed restrictions” necessary to prevent double counting of services. Microgrids: A Multi-Billion Dollar Opportunity Awaits Microgrids are integral to initiatives that aim to strengthen the economy, save lives during natural disasters, and make our energy supply more sustainable and our electrical power more secure. Microgrids increasing support more reliable, efficient, and safe power for critical infrastructure. Local utilities will also still maintain jurisdiction over interconnection of distributed resources to the electric grid, whether or not the resource intends to participate in retail activities. These types of local utility considerations will help prevent legal challenges that bogged down previous proceedings on demand response and energy storage. The different regional wholesale markets oversee hundreds of millions of dollars in energy transactions every day, and FERC’s ruling will open the door for DERs to access those competitive opportunities as noted in the “Distributed Energy Scores Big Win in US Wholesale Markets with FERC Order 2222” article courtesy of Matt Roberts at Microgrid Knowledge published in September 2020. Previous FERC orders allowing for grid-tied energy storage systems to access limited market opportunities (like frequency response) caused a bit of a battery gold rush in early mover markets like the PJM Interconnection. New wholesale revenue opportunities combined with declining costs and increasing retail value could spur new deployments and accelerate the already burgeoning DER sector. While the specifics of each market’s implementation plans are still months away, FERC Order 2222 is a major win for the DER industry and will have a significant impact on how distributed resources are designed, operated, and compensated for years to come. California’s Self-Generation Incentive Program (SGIP) The Self-Generation Incentive Program (SGIP) offers financial incentives for distributed energy resource (DER) systems installed behind the customer meter (BTM) in California. The California Public Utilities Commission (CPUC) opened SGIP in 2001, originally incentivizing solar, biomass generation, and other on-site power sources. Today solar no longer qualifies, and the program has largely refocused on energy storage. To date, the SGIP has contributed to 336 MW of BTM energy storage in California—and it is slated to contribute more. In September 2018, California Governor Jerry Brown signed Senate Bill 700, which extends the administration of SGIP through 2025 and supplies an additional $830 million in incentives for qualifying BTM technologies. With the federal investment tax credit (ITC) for various DER technologies set to decline starting in 2020, those interested in energy storage and other DER projects in California would be wise to familiarize themselves with SGIP. SGIP Program Overview Since 2001, the SGIP has evolved significantly. As noted, it no longer supports solar photovoltaic technologies, which were moved under the purview of the California Solar Initiative after its launch in 2006. It has also been modified to include energy storage technologies, to support larger projects, and to provide an additional 20% bonus for California-supplied products. SGIP was significantly modified by D.16-06-055 to reflect changing conditions and priorities with respect to the program. The changes made by D.16-06-055 include the allocation of 75% of the incentive budget to energy storage projects, capping each technology developer to no more of 20% each of the incentives for large-scale energy storage, residential energy storage and generation, the creation of a step system for incentives and the creation of a lottery system for allocating incentives to projects when a given step is oversubscribed. Incentive Structure California's SGIP offers incentives to energy storage systems based on several factors, including the kilowatt-hour (kWh) capacity of the system. The incentive amount offered to new storage customers will decline over time as the market matures to ensure efficient use of these ratepayer-funded incentives. Each incentive level is known as a “step,” and a certain amount of money is reserved for each step. On a statewide basis, approximately $40 million has been reserved for energy storage systems in each step. The stated purpose of SGIP has changed since the program’s inception in 2001. The program was created as a peak-load reduction program in response to the California energy crisis. In 2009, Senate Bill 412 shifted the program’s goal to greenhouse gas reductions. Further changes were made to SGIP in 2016 when the first-come, first-served awards system was modified to include a lottery process, and a majority of its funds were carved out for energy storage projects. Energy Storage-Enabled Resilient Microgrid and Island Power Projects California utilities CPA and SCE have issued requests for microgrid and power resiliency projects using energy storage as the state continues to adapt to an increased risk of power shutoffs. Community choice aggregator (CCA) Clean Power Alliance (CPA) has issued a request for offers (RFO) for developers to build power resiliency backup systems in communities in Southern California. Per the “Energy Storage-Enabled Resilient Microgrid and Island Power Projects” article by Cameron Murray at Energy-Storage News in January 2023: The CCA, a non-profit community-owned utility, is seeking the projects through its Power Ready program whereby solar-plus-storage systems are installed at buildings which serve as critical public facilities during outages. The risk of outages has grown with increased wildfires and ageing infrastructure in the state. The initial phase of the program seeks to have the backup power systems installed at 12 public buildings in Los Angeles and Ventura counties. It will contract with developers on a 20-year build-own-operate model and said it is providing the program at no cost to participating communities, it announced. The deadline was February 10, 2023, with power purchase agreements (PPAs) set to be signed towards the end of the year. See the CPA’s information page for more details. CPA’s RFO is similar in scope to one put out by comparatively larger utility Southern California Edison (SCE), one of the state’s big three investor-owned utilities along with PG&E and SDG&E, the week prior. SCE has launched its 2022 Catalina Island Clean Energy All-Source RFO for the Santa Catalina Island, mainly known as a getaway destination off the cost of LA. The company is seeking energy solutions to serve the island including renewable sources, energy storage, demand response and energy efficiency-based solutions. The resources will need to come online no later than 2027, and the deadline to submit proposals was May 1, 2023. The island has 4,100 residents as well as commercial and industrial (C&I) customers and around one million annual visitors, SCE said. Previously-mentioned utility SDG&E has also been working to add microgrid capacity in its areas of service, opting to build four projects in the San Diego region with 180MWh of energy storage capacity last year. In related news, the completion of two individual energy storage-enabled microgrids in the Sunshine State were announced this week. The first, from PepsiCo snacking crisps division Frito-Lay (Doritos, Lays/Walkers etc.), saw it complete the transformation of its 1,100-employee Modesto manufacturing facility turned into a showcase of clean energy technologies. This includes 2.7MWh of on-site battery storage to reduce the site’s electricity costs and support grid resiliency through things like peak shaving. It also features a 1MW solar carport combined with an undisclosed amount of energy storage, although that may mean integration with the aforementioned battery storage. Commercial and industrial-focused (C&I) developer and EPC firm Industrial Power on the same day revealed it had been awarded a construction contract for a 846 kW solar PV, 2.6MWh battery energy storage microgrid in the city of Coachella. The project will be deployed for Imperial Western Products, a firm which converts waste from the pet, baker and food sectors into sellable products. ESG New Year’s Resolutions to Help Meet Targets and Establish Leadership As per the “ESG New Year’s Resolutions to Help Meet Targets and Establish Leadership” Catalyze January 2023 post: 2022 was a landmark year for ESG (environmental, social, and corporate governance), as the commercial real estate sector cemented its commitment to not only goal setting, but action. Sources of pressure to take action continue to expand beyond investors and the public, as regulation mandating emissions reduction for building owners becomes more widespread. Additionally, increasing importance of employee, tenant, and public wellness has placed greater emphasis on the social aspect of ESG, reminding us that ESG is not just about environmental sustainability. In 2023, the momentum behind ESG will continue to grow, and building owners will need to act boldly and quickly to capture value and competitive advantage. By embracing our recommended new year’s resolutions, building owners can not only keep pace with the need for ESG, but emerge as leaders, securing a myriad of financial, reputational, and operational benefits. Streamline Your Measurements: Improve Quality and Efficiency of Data Collection With the widespread adoption of ESG targets, building owners are realizing the challenges associated with not only meeting those targets, but tracking progress made towards them. Data collection can be particularly tricky when there are multiple activities and technologies being tracked, which may be managed by separate partners who each collect and report their data using different methodologies and platforms, leading to a lack of standardization. Additionally, when it comes to meeting regulatory and financial reporting requirements, the need for accuracy is paramount. Many organizations are finding the ESG data collection and reporting process to be labor intensive, confusing, and ultimately, frustrating. Yet, it is an essential aspect of ESG action, and is needed to establish baseline metrics and assess the effectiveness of solutions for investors, regulators, and tenants. Without quality data, ESG action loses value, and targets become unattainable.

ENERGY Cost Savings For Facilities The second edition is available in epub, pdf, and paperback versions for $9.99, $19.99 and $34.99. Excellent resource and guidebook for facilities and operatons managers, energy industry professionals, sustainability workforce development, educators and students. CHAPTERS 1 - An ENERGY Savings Introduction For Facilities 2 - California’s Aggressive Zero Net ENERGY Goals 3 - Your Facilities' Electrical ENERGY Future Is Now 4 - Battery ENERGY Storage Systems For Facilities 5 - Potential ENERGY Cost Savings For Facilities 6 - Sustainable ENERGY Buildings Plans For Facilities 7 - ENERGY & Buildings Management Software For Facilities 8 - ENERGY Surveys, Inspections, Audits & Commissioning For Facilities 9 - Facilities ENERGY Benchmarking Using Portfolio Manager 10 - ENERGY Efficient Lighting For Facilities 11 - ENERGY Efficient HVACR Systems For Fcilities 12 - California’s Time-of-Use ENERGY Rate Changes For Facilities 13 - ENERGY Code Compliance Measures For Facilities 14 - ENERGY Certifications for Facilities and Managers 15 - Utilizing An ENERGY Savings Plan Budget For Facilities 16 - Alternate ENERGY Saving & Sustainability Systems For Facilities 17 - Emergency ENERGY Power Systems For Facilities 18 - Net Metering For Excess ENERGY Producing Facilities 19 - ENERGY Updates For DER’s, Microgrids, SGIP & ESG Programs 20 - Workforce Development For Sustainable ENERGY Electricians

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