MCE Supports Grid Reliability with Clean Energy Resources

MCE Supports Grid Reliability with Clean Energy Resources

Since MCE began serving customers in 2010, we have made bold and consistent efforts to increase access to clean energy services and technologies that support California’s energy and capacity needs. Our standard energy product, Light Green, is on track to be 95% carbon-free by 2023. MCE is also committed to supplying 50% of our Resource Adequacy (RA) portfolio with non-fossil resources by 2030. Clean RA is important because it helps reduce California’s reliance on fossil fuels as the primary means to ensure a reliable grid.

On July 30, 2021, Governor Newsom made an Emergency Proclamation which directed all state agencies to make additional energy resources available to serve customers during the high-power demand peak on days where there are extreme weather conditions. MCE and other agencies are focused on identifying ways to increase energy supply and to decrease demand during the peak demand hours.

What Is Resource Adequacy and Why Do We Need It?

Every electricity supplier in California is required to have reserve capacity available in the event more electricity is needed on the grid than is forecast. This reserve capacity is referred to as “resource adequacy” by regulators and energy industry suppliers. The California Public Utilities Commission (CPUC) created the rules governing reserve capacity in response to the energy crisis in the late 1990s. Electricity suppliers like MCE must demonstrate that they’re purchasing enough capacity to cover at least 115% of the expected peak electricity load to ensure grid reliability and energy availability. State regulators are currently considering increasing this capacity requirement.

Traditionally, reserve capacity requirements have been met by natural gas plants. While these facilities have a fuel source that can be called upon to produce power as needed, they can also take up to an hour or more to come online, are emissions-intensive, and are not very energy efficient. MCE is committed to finding other ways to offer clean, reliable energy resources that provide quick ramp-up and ramp-down reliability and are less carbon and emissions intensive.

Taking Action

MCE’s annual Integrated Resources Plan has committed to procuring 585 megawatts of storage capacity by 2030, with 300 megawatts of this capacity expected to be paired with renewable energy projects. This commitment will allow MCE to take greater advantage of renewable energy by storing excess solar during the day, dispatching it to the grid when energy is needed, and as a result, displacing outdated fossil fuel generation.

As part of the California Clean Resource Adequacy Coalition, MCE cosigned a letter to Chris Holden, Chair of the Assembly Utilities and Energy Committee, in October 2020. This letter outlined several immediate steps that state regulators can take to increase clean resources that support grid reliability. These steps would improve grid resiliency and reliability by providing regulatory support for procurement of clean energy resources such as batteries, behind-the-meter storage, demand response, and renewable, hybrid-resource technologies.

Lastly, in 2020 MCE became a registered purchasing and selling entity and official importer of record with the North American Energy Standards Board. – This official designation makes it easier to import clean energy from out of state.

Projects and Programs

MCE’s Wellhead Project is leading the way in the transition to clean reserve capacity. In 2019, MCE entered into an 11-year RA agreement with Wellhead Power Exchange for 48 megawatts of monthly capacity. Although currently operating as a traditional natural gas-fired facility, this project will transition to a hybridized technology that pairs natural gas with a lithium-ion battery. This technology will reduce up to 60% of greenhouse gas (GHG) emissions, while reducing water usage and increasing overall facility efficiency and responsiveness. The battery will allow the plant to respond instantaneously to grid needs, without having to come online unless there is a persistent need.

The Wellhead Power Exchange is in California’s Fresno Local Capacity Area, which registers some of the poorest air quality in the state. The project will provide clean energy capacity to the region and reduce fossil-fuel generation, GHG emissions, and associated air pollution.

MCE’s Peak FLEXmarket, formerly known as Demand FLEXmarket, focuses on payouts to help shift daily load during the summer season. The program focuses on reducing summer peak hours via a flexible resource that meets grid needs and benefits customers. Peak FLEXmarket aims to shift 20 MW of customer demand out of peak hours (4 p.m. to 9 p.m.) and offer additional incentives for “Resiliency Events” that help decrease the risk of outages during Flex Alerts.

Created in partnership with Recurve, Peak FLEXmarket is designed to support decarbonization and climate adaptation by integrating clean distributed energy resources such as batteries, smart thermostats, and electric vehicle (EV) charging equipment into a dispatchable resource.

The MCE Sync Program, launched in October, 2021 is enrolling 200 customers during its initial pilot stage. Drivers who charge their EVs at home will download an app to allow MCE to direct their charging pattern away from the 4 p.m. to 9 p.m. peak hours toward prime solar production hours. Customers will be given a $10 monthly bill credit for participating and can further reduce costs by shifting EV charging to hours when electricity is less expensive

MCE has submitted a proposal for a green hydrogen facility in our service area to be funded by the California Energy Commission’s (CEC) Renewable Energy Transportation Fuel Production grant. If selected, this project will develop a green hydrogen production facility in Richmond at the site of MCE Solar One as a way of more effectively utilizing midday solar production. The proposed project could produce 1,000 kilograms of green hydrogen daily. As green hydrogen efforts become more cost effective, MCE hopes to use this resource as a method for increasing grid reliability through energy storage.

MCE’s Energy Storage Program created a $6 million resiliency fund to help alleviate grid outages that threaten our community’s safety, health, and welfare. The program launched in July 2020 with the goal of deploying 15 megawatt-hours of customer-owned, behind-the-meter battery energy storage systems over two years. A priority is placed on investments in facilities and residences that support low-income and medically vulnerable customers.

The Energy Storage Program also provides smart, demand-side management opportunities through a network of flexible, energy storage plus solar systems with real-time monitoring and controlling. These resources can be aggregated and dispatched by MCE to manage critical peak loads, minimize procurement costs, and as market opportunities evolve, may be used to generate value in wholesale markets. This will help MCE minimize costs for all customers, and benefit California’s electric grid through clean, reliable, and smart demand-side management (DSM) strategies enabled by energy storage technologies. During later phases, this program may help MCE expand its role as a California Independent System Operator (CAISO) market participant by aggregating resources that can be dispatched into the CAISO market.

Looking Ahead: Future Projects

On April 6, 2020, MCE issued our first Clean Resource Adequacy Request for Offer (RFO) for suppliers that provide creative and nontraditional technologies such as hydrogen-fueled generation, green hydrogen fuel cells, and renewable natural gas technologies. MCE is currently evaluating various technologies with an emphasis on pairing renewable projects with innovative technologies, while continuing to reduce GHG emissions, increase grid reliability, and further develop community resources to support economic growth and clean energy jobs.

Additionally, in October 2020, MCE issued a joint Long-Duration Storage RFO with seven other community choice programs, seeking up to 500 megawatts of storage that is able to provide full energy capability to the grid for eight hours. Currently, four-hour duration batteries make up the bulk of battery energy storage procurement. This collective RFO was issued in response to the CPUC’s comments on the need for longer-duration storage options by 2026, and represents the largest single procurement effort in California for long-duration energy storage. Storing excess renewable energy and dispatching it when needed will increase the flexibility of the grid and reduce the need for fossil fuel generation.

MCE is committed to creating a cleaner energy future for all. Our commitment to clean Resource Adequacy innovation demonstrates our focus on new technologies and the development of innovative and creative solutions to further reduce energy-related GHG emissions.

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