The Details Behind California’s Demand Response Auction Mechanism
California has been hard at work on new regulations and market structures to bring distributed energy resources (DERs) into play as grid assets. In Q4 of 2015, it began taking bids for its latest program on the demand side of the DER equation -- the Demand Response Auction Mechanism, or DRAM.
Distributed energy resources can include rooftop solar PV, behind-the-meter batteries, or other sources of electricity. But they can also include demand-side resources -- homes, businesses, factories, farms, or electric-vehicle fleets, capable of curtailing electricity consumption when the grid needs it most. By allowing aggregated DERs to play a role, utilities are also reducing the need for “peaker” plants. The new DRAM program comprises a floor of 10 megawatts apiece for Pacific Gas & Electric (PG&E) and Southern California Edison (SCE), and 2 megawatts for San Diego Gas & Electric (SDG&E), with at least 20 percent of each to come from the residential sector. Full article here