March 11, 2021 David Wagman

Electric vehicle owners could help support California’s electric power grid starting this summer.

State utility regulators signaled they are open to looking at how EVs could be used as a demand response tool to provide grid support services.

Both Pacific Gas & Electric (PG&E) and Southern California Edison (SCE) have expressed doubt that programs could be set up in time for EVs to be of much help this summer. But other groups, including the California Energy Storage Alliance, backed the idea of offering incentives or payments to EVs that export power to the grid.

The idea came as part of a proposed order by the California Public Utilities Commission that would direct utilities to put in place measures to cut energy demand and boost supply during critical hours of the day both this summer and in 2022. The commission opened a proceeding last November in response to the mid-August 2020 extreme heat event that forced the California Independent System Operator (CAISO) to initiate rotating power outages.

Besides looking into how EVs may be used as a grid resource, regulators laid out a number of new initiatives.

One would shift the Critical Peak Pricing event window for residential and non-residential customers to 4 p.m. to 9 p.m. and increase the maximum number of such events allowed each year. The shift would help ensure that price signals are sent during critical hours of a grid emergency.

A second initiative would direct utilities to secure at least an additional 2.5% of supply- and demand-side resources for all customers. The action would increase the planning reserve margin from 15% to 17.5%.

In practice, the change would result in minimum new resource targets of 450 MW for PG&E, 450 MW for SCE, and 100 MW for San Diego Gas & Electric. On the supply side, the proposal would order utilities to give preference to storage contracts, efficiency upgrades to existing generation resources, and short-duration contract terms.

Nautilus buys development portfolio

Nautilus Solar Energy said it acquired eight community solar projects in Maine totaling 47.2 MW from ISM Solar Development. The projects are expected to start construction in the third quarter. When fully operational, the projects are expected to generate nearly 70 million kWh annually.

The projects are part of Maine’s Net Energy Billing program. Nautilus will be the long-term owner and also will handle acquiring and managing customer subscriptions.

This marks the third deal between Nautilus and ISM, and it follows Nautilus’s acquisition of a 19.2 MW community solar portfolio from Walden Renewables Development in January.

Grid storage lab gets DOE approval

The U.S. Department of Energy gave a green light to the design and construction of the Grid Storage Launchpad (GSL), a $75 million facility located at Pacific Northwest National Laboratory in Washington State. The GSL is intended to speed up the development and deployment of long-duration, low-cost grid energy storage.

The planned facility will include 30 research laboratories, some of which will be testing chambers capable of assessing prototypes and new grid energy storage technologies under real-world grid operating conditions. The laboratory will now pick a design and construction contractor, with a goal of starting construction late this year. The building is expected to be operational by 2025.

In addition to federal funding, the Washington State Department of Commerce pledged $8.3 million for advanced research equipment and specialized instrumentation.

The state’s Department of Commerce has also signed a memorandum of understanding with DOE’s Office of Electricity to promote partnerships to advance grid energy storage technologies, support the energy storage innovation ecosystem, and share best practices with other states.

Sunrun prices solar-as-a-service

Sunrun said it priced a securitization of leases and power purchase agreements, known as Sunrun’s solar-as-a-service offering. The securitization consists of a single-tranche of A-rated notes with a $201 million initial balance, representing an 80.0% advance rate. The notes priced at a yield of 2.46%, representing a spread to the benchmark swap rate of 135 basis points (bps). The company said this was a 40 bps improvement from the securitization issued by Vivint Solar in September 2020, which previously was the lowest spread achieved by Sunrun or Vivint Solar.

With a yield of 2.46%, the cost of debt is 172 bps below the average cost of the company’s senior securitized notes. The notes carry a weighted average life of 6.3 years and have a final maturity of January 30, 2052. The notes are backed by 16,686 solar rooftop systems distributed across 17 states and Washington D.C. and 52 utility service territories. The transaction is expected to close by March 17. Credit Suisse served as structuring agent and bookrunner. Truist Securities served as co-manager for the securitization.