What's Happening?
California’s virtual power plant, funded by taxpayers, is expected to save ratepayers $206 million by 2028 by reducing the need for gas peaker plants. The Demand Side Grid Support program, run by the California Energy Commission, compensates customers for dispatching their behind-the-meter batteries during grid stress. Despite its potential benefits, the program faces funding cuts, with Governor Gavin Newsom approving a budget that reduces its funding by $18 million.
Why It's Important?
The virtual power plant represents a significant shift towards distributed energy resources, offering a reliable and flexible energy solution that can meet peak electricity demand. The program’s success could lead to substantial cost savings and improved energy reliability for Californians. However, the funding cuts threaten its future, potentially limiting its ability to attract private investment and deliver its full benefits.
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What's Next?
Advocates are urging California lawmakers to restore funding commitments to ensure the program’s continuation. The DSGS program could expand significantly, doubling its battery capacity and providing over 1 GW of reliable performance. Increased flexibility in event triggers and integration into state resource planning could enhance its effectiveness.
