The California legislature last week approved SB 700, which extends funding for the Self Generation Incentive Program (SGIP), the state’s chief vehicle for expanding behind-the-meter energy storage.
While solar and storage advocates cheered the bill’s passage for the positive impacts it will have on deployment, the bill also seeks to bring the SGIP more in line with the state’s greenhouse gas (GHG) reduction goals.
The state has acted as a leader in fighting climate change and reducing GHG emissions by setting a 100% renewable portfolio standard and increasing electric vehicles on the road. GHG reduction is one of the statutory goals of SGIP.
A key question when it comes to climate impacts is whether storage batteries are being charged by clean energy and discharged during times of high fossil fuel use.
Any changes are likely to become more apparent as the California Public Utilities Commission (CPUC) updates the regulations for SB 700. The changes also reflect some of the challenges facing the storage industry in California.
GHG targets unmet
Every year, the CPUC issues a report card on the SGIP program. The current report, released in November 2017 to reflect 2016 performance, found that while SGIP is generally helping to reduce system peak demand and customer bills, the program’s GHG reduction targets are not being met.
In theory, charging a storage device during low-price periods and discharging during high-price periods saves customers money. Using energy storage to offset peak-hour generation was assumed to reduce GHG emissions. However, the report found that during 2016, the non-residential storage projects analyzed increased GHG emissions by 726 metric tons of carbon dioxide.
To reach the GHG goals, SGIP storage projects must charge during cleaner grid hours and discharge during dirtier grid hours, or peak marginal GHG emissions hours. That doesn’t always happen.
The report said that the 2016 GHG shortfall was principally due to “rate designs that are misaligned with peak marginal GHG hours, which prevent customers from receiving signals that would lead to GHG reductions.”
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