Pacific Gas and Electric Company will be soliciting Requests for Offers for two months beginning this spring, inviting providers of distributed energy resources to propose innovative and competitive solutions for the portfolio.
The California Independent System Operator (CAISO) last week approved PG&E’s plan to provide a “green and innovative option” using local clean-energy resources, including energy storage, energy efficiency and electric-system upgrades, to ensure transmission grid reliability in Oakland when the current power plant, at 50 Martin Luther King Jr. Way, is retired.
The current plant, which is 40 years old, is owned by Dynegy. It runs on oil and provides power to the CAISO, which has a “Reliability Must Run” contract with Dynegy to buy power during peak periods. In spring 2017, the system operator identified the legacy plant’s eventual retirement as a risk to local transmission reliability and said it would consider alternatives — including new transmission lines through heavily populated areas of Oakland, a new fossil-fuel plant, or a portfolio of local clean resources.
Under the plan approved by CAISO, “PG&E’s Oakland Clean Energy Initiative (OCEI) will provide a green and innovative option,” said Roy Kuga, vice president of Grid Integration and Innovation for PG&E.
“The Oakland Clean Energy Initiative represents an innovative, tailored portfolio of distributed clean energy resources combined with traditional transmission substation upgrades that meet the local reliability needs in this area of Oakland, enabling the retirement of the aging, jet fuel-powered plant,” Kuga said in a news release.
PG&E and CAISO have worked together over the last several transmission-planning cycles to study how distributed clean energy resources could become part of the solution, Kuga said. The system operator opted for the “clean and affordable option.” The existing plant runs on jet fuel. The new plan would include increased energy efficiency, rooftop solar panels and other solutions based on demand.
Now PG&E will begin upgrading substations and developing new clean-energy resources in Oakland to provide an alternative to the legacy facility.
The OCEI would mark the first time that local clean-energy resources are proactively deployed as an alternative to fossil-fuel generation for transmission reliability in PG&E’s service area.
Depending on the exact resource mix, the market solicitation is expected to result in 20 to 45 megawatts of clean energy resources. The total value of the procurement has not been estimated and would depend on the resources chosen for the new plant.
“The estimated cost of the PG&E proposal is about $102 million (in 2022 dollars),” according to a report in RTO Insider, which covers the regional transmission industry. RTO Insider’s report said the other plant alternatives, including transmission lines and generation, ranged in cost from $367 million to $574 million.
The Natural Resources Defense Council has published an endorsement of the new plan.
PG&E expects to make its filing with the California Public Utilities Commission by the end of 2018. The Oakland Clean Energy Initiative has a forecast in-service date of mid-2022.
PG&E delivers energy to nearly 16 million people in Northern and Central California.
