Dive Brief:
- Participants in California’s Self-Generation Incentive Program leveraged behind-the-meter energy storage systems to significantly reduce their greenhouse gas emissions from electricity consumption in 2021 and 2022, Brian McAuley, a principal consultant with Verdant Associates, said on a July 30 webinar hosted by the Clean Energy States Alliance.
- Following changes in 2019 to incentivize GHG reductions, the SGIP program as a whole has had net-negative emissions since 2020, with reductions increasing from 2.3 kg per kWh of system capacity in 2020 to 9.8kg/kWh in 2022, McAuley said.
- Residential energy storage systems enrolled in SGIP had the deepest observed reductions, rising from 10.7 kg/kWh in 2020 to 16 kg/kWh in 2022. But a Verdant Associates analysis released in May found that residential battery charging and dispatch patterns optimized for GHG minimization would have reduced emissions by about three times as much in 2022, suggesting considerable “value being left on the table” for emissions reductions from behind-the-meter storage assets, McAuley said on the webinar.
Dive Insight:
Factors driving deeper GHG reductions for SGIP-enrolled systems included the program’s requirements that participating customers enroll in higher-differential time-of-use pricing schemes and meet a minimum battery-cycling threshold, which in turn improve the economics of energy arbitrage, McAuley said on the webinar.
Customer participation in demand-response programs that reduce net power use during periods of peak demand and public access to GHG-intensity signals from the California Independent System Operator also helped encourage emissions-reducing behaviors, McAuley said.
But McAuley noted that program participants generally did not regularly discharge their systems’ total capacity, with residential solar-and-storage systems discharging about 45% of available capacity and standalone systems discharging about 22% of available capacity daily on summer weekdays.
Paired solar-and-storage systems made up 97% of participating assets, with standalone storage comprising the remaining 3%. The standalone systems generally charged overnight and discharged at peak periods to benefit from price differentials, a pattern of behavior that resulted in slightly higher overall emissions, McAuley said.
“Solar [photovoltaic] charging is critical to emissions reductions,” he said.
SGIP could spur higher battery utilization by further increasing cycling minimums, enabling customer enrollment in virtual power plants that allow aggregators or utilities to control behind-the-meter storage dispatch, and participation in real-time power pricing schemes with “more granular rates than just the 4-to-9 p.m. peak period,” McAuley said.
Optimizing residential energy storage system dispatch to minimize utility costs would reduce utilities’ operational expenses by $108/kWh of system capacity, compared with $48/kWh in the optimal GHG-reduction scenario and $26/kWh in the actual scenario, according to Verdant’s analysis. A scenario that optimized for lower customer bills saw the average customer save $21/kWh of system capacity, compared with $14/kWh in the minimal utility cost scenario and $13/kWh in the optimal GHG-reduction scenario.
The utility cost optimization scenario avoided almost the same amount of emissions (54 kg/kWh) as the optimal GHG-reduction scenario (56 kg/kWh), while the minimal customer bill scenario avoided 29 kg/kWh of emissions, Verdant found.
Behind-the-meter energy storage can substantially reduce emissions from power generation in California due to the prevalence of daytime renewable generation on its grid, especially during off-peak periods like spring weekends, McAuley said on the webinar. In the optimal GHG-reduction scenario, batteries charge during peak sunlight hours — typically 9 a.m. to 3 p.m. — and discharge in the early evening, when demand is highest.
