Modeling your Project with California's DSGS Program
California’s Demand Side Grid Support (DSGS) Program offers incentives to electric customers that provide load reduction and backup generation to support the state’s electrical grid during extreme events from May to October, reducing the risk of rotating power outages. The DSGS Program compensates behind-the-meter sited Energy Storage Systems (ESS) by providing incentives to reduce customer net load with upfront capacity commitments and for per-unit reductions in load.
You can learn more by checking out our blog posts: Model Demand Side Grid Support with DSGS and Energy Toolbase Enables Users to Co-optimize Grid Services and Utility Bill Savings!
30-year Cashflow Duration. ETB’s “DSGS & Grid Services” cashflow stream is modeled over a period of 30 years. ETB conservatively expects DSGS program revenues to last for 4 years and then generic Grid Services revenue to continue in years 5 through 30. After DSGS ends at year 4, ETB assumes the ESS asset will continue to participate and capture value in one or more other programs, such as ELRP, a successor program to DSGS, or other future programs. ETB believes there is strong evidence and empirical data supporting that the value of Grid Service(s) and/or Demand Response (DR) programs will continue and likely increase over time. Beginning in year 5, ETB reasonably assumes the $/kWh value of Grid Services/DR revenues will inflate at a rate of 3% annually, which is the default rate assumed for annual utility bill cost inflation.
Additional Assumptions. If the ESS asset is enrolled into the DSGS Program in 2024, there is a 30% bonus adder value in year 1. ETB’s “DSGS & Grid Services” cash flow factors in ESS degradation and utilizes the vendor-specific ESS annual kilowatt-hour (kWh) degradation rate. The annual revenue estimates shown are net of fees and represent the net income to the ESS owner. Fees are paid to both ETB and our partner Leap, a leading platform for generating value from distributed energy resources through integration with wholesale and grid service energy markets. Disclaimer: While these assumptions and values are ETB’s best reasonable estimate, ETB cannot predict future grid service revenues with certainty or guarantee these estimates.
Future Additions of Demand Response Programs in ETB Developer. ETB continuously expands ETB Developer’s functionality in co-optimizing electric bill savings and DR program revenues by adding more nationwide DR program frameworks. If you have a suggestion of where we should explore next, please contact your account manager or email your recommendation to contact@energytoolbase.com