Demand response is defined by the Federal Energy Regulatory Commission as “Changes in electric usage by end-use customers from their normal consumption patterns in response to changes in the price of electricity over time, or to incentive payments designed to induce lower electricity use at times of high wholesale market prices or when system reliability is jeopardized.”

By not charging EVs or consuming energy at peak hours, consumers alleviate stress on the grid, and help ensure adequate resources are available for the entire region.

The project achieves this by correlating charging activity with wholesale energy prices. By agreeing to not charge in certain high price hours, the aggregated resource is paid the marginal energy price in those hours, similar to a conventional generator. The pilot project will end in late 2015.

This pilot project emphasizes SDG&E’s focus on innovation in the electric vehicle and energy storage sectors. There is tremendous potential for dispatchable distributed energy resources to enhance reliability and achieve greater efficiencies. The key to unlocking that potential is to better understand how these resources provide value both at the customer site level and at the larger electric grid level. This project does just that.

—James P. Avery, SDG&E’s senior vice president of power supply

The project is identifying both barriers and best practices for future, large scale integration and interaction of dispatchable distributed energy resources with wholesale markets, and creating tools to evaluate growth opportunities for those resources.

This pilot creates an important connection between actual grid conditions and customer response. By having electric vehicles directly participate as a grid resource in the wholesale market, vehicles respond to signals from the grid operator to reduce when electricity is scarce, and continue or resume charging when renewable generation is plentiful. This capability helps maximize the use of energy from renewables while keeping the grid reliable.

—Heather Sanders, the CAISO’s Director of Regulatory Affairs for Distributed Energy Resources.

There are currently more than 13,000 EVs in SDG&E’s service territory; the Governor’s Zero-Emission Vehicles (ZEV) Action Plan envisions 1.5 million ZEVs in California by 2025. Achieving that objective will require significant, near-term investment in workplace and multi-unit dwelling charging infrastructure to help increase EV adoption, SDG&E said.

In addition, reliably integrating and managing the associated increased charging loads necessitates innovative rate structures that encourage charging at optimal times and minimize system impacts at the local distribution level. Addressing these broader infrastructure additions and rate reform requirements is the subject of SDG&E’s Electric Vehicle Grid Integration (EVGI) Pilot Program Application currently pending before the California Public Utilities Commission (CPUC).

In achieving the market participation milestone, SDG&E continues to work closely and collaboratively with its project partner, Shell Oil Products US.

This is a key achievement in our Electric Vehicle R&D trial in San Diego and an important milestone for our partnership with SDG&E. The trial is one of a number of trials globally with selected fleet customers as they diversify their mix of vehicles. It is important for us to understand if electric mobility can be made commercially viable for Shell within our wider alternative energy portfolio.

—Matthew Tipper, VP Alternative Energies, Shell

Houlihan Lokey Strategic Consulting and CleanReturns provide consulting services and project management for the trial. Olivine, Inc., a leader in demand-side market integration, provides technological integration support for the project.

Resources

• “California Vehicle-Grid Integration (VGI) roadmap: Enabling vehicle-based grid services” (Feb 2014)

• “Multi-Agency Update on VGI Research” Peter Klauer, Smart Grid Solutions Manager California ISO, presentation at California Energy Commission workshop, Nov 2014