San Diego, August 31, 2023 – As the Western United States grapples with record-breaking heatwaves straining the power grid, San Diego Gas & Electric (SDG&E) is pioneering a fresh approach to demand response through a novel virtual power plant (VPP). Unlike conventional battery-centric systems, this utility is harnessing the combined capabilities of smart thermostats, rooftop solar, and other connected resources, including battery storage, to alleviate energy demand in a centralized system.
Since December 2022, SDG&E has embarked on a VPP pilot project to leverage a multitude of customer-owned devices for supporting the grid during peak hours. This innovative initiative is a departure from the norm as most VPPs predominantly rely on a single brand or device type, typically centered around battery energy storage.
The SDG&E VPP pilot stands out by integrating a diverse range of devices within a unified system, encompassing smart thermostats, well water controllers, and battery energy storage systems. The pilot is currently being trialed in Shelter Valley, a remote enclave in eastern San Diego County.
Participants in the pilot include single-family homes with pre-existing rooftop solar installations, as well as the Shelter Valley Community Center, serving as a local resource hub during emergencies. The center benefited from the installation of two batteries on-site, free of charge.
In response to escalating temperatures in August, SDG&E implemented its VPP pilot on three occasions to bolster the grid during peak demand windows. The connected devices performed as anticipated.
When VPP participants receive notifications about the possibility of their devices being temporarily deactivated or discharging electricity to support the grid, they retain the option to opt-out for specific devices, except for battery storage. Remarkably, the utility reported a minimal opt-out rate.
Commencing in December 2022 and slated to run until December 2023, the pilot has demonstrated exceptional performance, prompting SDG&E to contemplate expanding the program to additional areas in the future.
Having undergone 17 simulated demand response events since its inception, the VPP proves the efficacy of advanced software in orchestrating and coordinating a diverse array of decentralized resources, from home appliances like electric vehicles and chargers to HVAC equipment and solar-plus-battery energy storage systems.
Miguel Romero, Chief Commercial Officer of SDG&E, highlighted the merits of virtual power plants, stating, “The beauty of a virtual power plant is it can leverage existing resources to provide significant grid reliability benefits – with zero incremental emissions. When hundreds or thousands of businesses or homes are connected to a VPP and their resources are flexibly managed to charge or discharge electrons, they can help keep the lights on during hot summer days.”
SDG&E’s forward-looking approach to demand response underscores its commitment to innovative solutions that ensure grid resilience and sustainability amidst the challenges posed by climate change and rising energy demands.