After a variety of “technical gremlins” prevented its 2023 virtual power plant pilot from meeting capacity targets, Pacific Gas & Electric is testing a fundamentally different approach this summer. For its latest VPP, the Northern California utility is adding in smart electrical panels and “never used before software” from Tesla.
PG&E’s first VPP pilot with Sunrun involved more than 8,000 residential batteries, but because many didn’t respond when called upon each day, the pilot didn’t manage to meet the 34 megawatts of permanent load shift the utility had anticipated.
So this summer PG&E is testing a smaller, higher-tech program designed to address a widespread industry challenge: Utilities say they want to rely on distributed resources for planning, but have so far failed to do so at a meaningful scale.
The Seasonal Aggregation of Versatile Energy program (SAVE) will attempt to leverage behind-the-meter resources as precision instruments to meet neighborhood-level constraints, rather than the broad system peaks PG&E targeted last time. And in addition to Sunrun, PG&E is also involving smart panel maker Span, which has been quietly building out a new utility-focused business model.
Between June and October, PG&E will send week-ahead hourly signals and daily adjustments to its aggregation partners, Sunrun and Span, and will coordinate up to 1,500 residential batteries and 400 smart electric panels within individual distribution circuits. Sunrun will manage battery dispatches at customer homes, while Span will shift or cap power consumption.
This comes amid widespread and longstanding frustrations over utilities’ inability both to unlock additional capacity DERs could provide, and leverage that capacity for grid planning as load growth surges. Addressing that frustration is central to the SAVE program, Trevor Udwin, who manages VPP and grid optimization programs at PG&E, told Latitude Media.
“We’re not just shaving peak, this is not an emergency load drop, this is proactive load shaping,” Udwin explained. “And the term ‘proactive’ is absolutely essential here, because me saying to my distribution engineers that these resources are going to help your distribution peak…trust me, they’re going to say ‘no, we’re going to keep developing and investing in our grid the way we have until you can absolutely prove it.’”
The SAVE program, which Udwin refers to as a “test” of “precision grid surgery,” is the best way to prove the model, he added.
Technical risk-taking
SAVE represents a significant technological advancement from PG&E’s prior work leveraging residential batteries: moving from simple, system-wide time-of-use export programs to complex, predictive load shaping.
That’s thanks in part to the addition of Span as an aggregation partner, Udwin explained. That addition opens up the possibility for load limiting, or what Udwin calls “hourly operational envelopes,” a tactic that’s been used in parts of Europe including Germany, but not widely in the U.S. so far.
“It’s essentially saying that, at the panel [level], there will be hours where we put a ceiling on the amount of voltage and energy that is being used in the home,” he explained.
But the added complexity of this summer’s pilot is also centered around the load shapes that PG&E is asking its partners to match.
In 2023, the utility asked Sunrun to discharge its residential batteries back to the grid for two hours at the same time every evening to help manage after-work peaks, which were made worse by high summer temperatures.
But that 2023 pilot didn’t fully demonstrate the potential for behind-the-meter assets to be relied on for grid planning, Udwin said, because the needs of the grid are different in different regions, and change over time.
And, he added, because of the relatively simple load shapes of that pilot, it didn’t present the same technical challenges that SAVE now does. Each week, PG&E will be sending Sunrun and Span much more challenging load shapes to meet: “We have been very intentional in SAVE to pick interesting load shapes — these are real load shapes on our distribution system,” he said.
It’s a critical scale-up from prior pilots in terms of ensuring both asset alignment and incrementality.
“When we talk about grid services, one service should not be at the detriment of another,” Udwin explained. For example, if a SAVE aggregation adjusts for a feeder with a noon peak, and somehow prevents batteries from charging up for the evening peak, it’s difficult for PG&E to know whether using the aggregation in that way has ultimately benefitted or harmed the overall system.
“Hopefully the answer is they will charge and they’ll be hitting both peaks, in which case we’re definitely squeezing more juice than we would have gotten otherwise, but that’s not a guarantee,” he explained. “We’re talking about very diverse ecosystems of aggregations.”
Aligning that ecosystem to meet tricky load shapes is essentially what Sunrun and Span are attempting to do this summer, Udwin added: “Our partners are really sticking their necks out to figure out if they can meet these shapes.”
Room for scale
It’s in part because of these technical unknowns that SAVE is so small in its first iteration.
“The magnitude of impact will actually be very low, and that’s very intentional,” Udwin said. “Let’s not spend a lot of money and notch that curve down…First let’s show that we can get a curve that we want.”
For now, this precision version of a VPP is funded by ratepayers (another good reason to keep it small) and participants are offered flat-rate incentives. Sunrun battery customers receive $150 per battery, and Span panel owners can receive up to $250, depending on their participation in events throughout the summer.
And if the batteries and panels can successfully adhere to PG&E’s “interesting load shapes,” then scale will come into the picture — and bring with it a whole host of other questions. According to Udwin, these include how to incentivize long-term participation: “How do we get the magnitude that we’re looking for behind each of these assets? And what is that magnitude behind each asset, and what does it mean for our partners? How do we get them to bring us that magnitude?”
But there’s no need to ask those questions until this summer’s pilot proves that the assets can meet PG&E’s expectations.
“It’s clear these resources have value, but the conversation around what that is cannot be staked in reality until we start building these blocks up,” Udwin said. “It’s our turn to build that conversation and provide some insights into how resources behave when we’re looking at it from a distribution perspective.”
Ultimately, he added, SAVE isn’t trying to determine the best approach to VPPs. Rather, “it’s simply wanting to shed light on where and when we can get value in this alignment across assets.”
