California's Virtual Power Plant Project Forecasted to Save $206 Million by 2028

What's Happening?

California's virtual power plant, funded by taxpayers, is projected to save ratepayers $206 million between 2025 and 2028 by reducing reliance on gas peaker plants. The Brattle Group's report, commissioned by Sunrun and Tesla Energy, highlights the Demand Side Grid Support (DSGS) program's potential. Since 2023, DSGS has compensated customers for dispatching their behind-the-meter batteries during grid stress. Despite its benefits, the program faces funding cuts, with Governor Gavin Newsom approving a budget that reduces its funding by $18 million. The program risks running out of funds by year-end, threatening its continuation.

Why It's Important?

The DSGS program represents a significant shift towards distributed energy resources, offering a reliable and flexible energy solution that can scale to meet peak demand. The potential savings and reduced need for gas plants underscore the program's importance in California's energy strategy. However, funding cuts could jeopardize its future, impacting energy affordability and reliability. The program's success could encourage further investment in residential battery capacity, enhancing California's energy resilience and sustainability.

What's Next?

Advocates are urging California lawmakers to restore funding for DSGS and related programs to ensure their continued operation and investment attraction. The program's expansion could double battery capacity over the next three years, providing over 1 GW of reliable performance. Enhancements in event triggers and integration into state planning could optimize its benefits. The coalition of renewable energy organizations is actively lobbying for legislative support to secure multi-year funding.