Addressing the Role of Electric Vehicles in Greenhouse Gas Reduction: California Independent System Operator Action


Source: Kempton and Tomic 2005. Journal of Power Sources

This is the third post in a series looking at legislative and regulatory action addressing Electric Vehicle (EV) greenhouse gas (GHG) emission reductions(See previous posts on the CPUC and State Legislative Action). This post focuses on efforts by the California Independent System Operator (CAISO).

It is well established that electrifying transportation is essential to achieving California’s clean energy mandates. The transportation sector accounted for approximately 37 percent of total GHG emissions in 2012, with on-road vehicles accounting for more than 90 percent of emissions in the transportation sector. To lessen the negative impacts of vehicles on California roads, in February of 2013, the Governor’s Interagency Working Group published the Zero Emission Vehicle (ZEV) Action Plan. The ZEV Action Plan established the goal of 1.5 million ZEVs on California roads by 2025. Under the ZEV Action Plan, the Governor assigned CAISO to lead the effort of mapping a way to enable EVs to provide grid services in collaboration with the California Energy Commission (CEC), California Public Utilities Commission (CPUC), California Air Resources Board (CARB), the Governor’s office, and other industry stakeholders. CAISO has a unique role in the electrification of the transportation sector and is responsible for integrating EVs into the grid as seamlessly as possible.


CAISO coordinates and controls California’s transmission, generation, and wholesale power market. CAISO acts to predict, balance, and/or respond to market need and system requirements for both energy and capacity. Capacity, or the measure of how much reliable electricity generation the grid needs to meet the fluctuating peaks and troughs in energy demand, will be especially important when considering the massive influx of EVs onto the grid. CAISO is working to ensure that the increase of EV charging does not negatively affect the grid or increase unpredictability of the system.

Unpredictability for grid managers due to significant shifts in customer consumption patterns is one possible consequence of increased EV charging. While the amount of time and power required to charge a vehicle varies based on the EV model, the load from one EV can be as much as 19 kilowatts (kW), which is more than the load for most large, single-family homes. Therefore, as more and more EVs are introduced onto the grid, the time at which EV owners charge is likely to have a significant impact on grid management. For example, energy use in San Diego has consistently peaked around 8 p.m., a time that would likely coincide with the time people get home from work and plug in their EVs for the night, making management of peak load that much more difficult. Charging EVs in the day could help to manage the negative effects of the duck curve, which is a modeling of the net load created by the difference between the forecasted load and expected electricity production from variable generation resources during certain times of the year. The growing generation of renewables, especially solar in California, creates an overgeneration risk during the day that could be lessened by EV owners opting to charge their vehicles during the day, most likely while at work, so that the demand of EV charging matches the supply provided by solar during the day.

While the technology is not yet available, EV batteries could provide significant opportunities for additional distributed generation by supplying energy back to the grid when needed to help meet peak demand. However, this type of varied and dispersed generation would create new challenges for grid managers such as CAISO. Whereas power procurement has traditionally been from large power plants which are generally connected directly to transmission lines, EV generation consists of numerous resources scattered throughout the distribution grid. These scattered generation resources, such as EV and rooftop solar are referred to as Distributed Generation (DG). The ability to aggregate individual DG would allow varied resources to participate in the CAISO market and connect to the grid in a more predictable manner. While the increase of EVs will no doubt create changes in electricity consumption and generation patterns, it is difficult to predict the effects a large number of EVs will have on the grid when there are so few currently connected. CAISO has developed a blueprint for integrating EVs into the grid to ease the transition of electrifying the transportation sector.

VGI Roadmap

In February of 2014, CAISO published the “Vehicle-Grid Integration Roadmap: Enabling Vehicle-based Grid Services” (Roadmap) to serve as the conceptual blueprint for smoothly integrating large numbers of EVs into the grid. The Roadmap aims to aggregate vehicle charging, so that CAISO can adequately manage and develop valuable grid services while ensuring that the driving habits of consumers are not compromised. First, CAISO aims to enable managed EV charging consistent with grid conditions to ensure that EV charging does not increase peak load and therefore the cost to ratepayers. Eventually, when the technology is available, CAISO hopes that two-way interaction between EVs and the grid could provide benefits for both the grid and EV owners.

The Roadmap conceptualizes two ways in which to achieve Vehicle-Grid Integration (VGI): (1) managed charging and (2) two-way interaction. Managed charging is the technical ability to alter the timing or flow of electricity to an EV. Customers would be able to alter their charging behavior based on price signals to avoid charging during peak times and therefore avoid contributing to peak demand. Two-way interaction, or vehicle to grid (V2G), is the second concept for how EVs could facilitate balancing demand if or when the technology is readily available.

This year, CAISO has predicted that the growth in power available from renewable sources, especially solar, will require grid operators to manage a 14,000 megawatt (MW) swing in load during the 5 to 6 p.m. hour. EVs would be especially fit to help meet rapid load swings because EV batteries are engineered to withstand extreme and instantaneous discharge cycles when accelerating and recharge cycles when slowing down. However, the Roadmap has identified several barriers that need to be overcome to facilitate VGI.

The Roadmap specifically identifies the three key barriers to VGI:

  • The value of VGI is not clear
  • VGI-eligible products, programs, and enabling policies must be defined and implemented
  • Technical functionality must be improved and technical standards must be developed and coordinated

CAISO has identified these barriers as three inter-dependent tracks or necessary steps for enabling EVs to provide grid services. The first track is the determination of VGI value. Refined use cases, as mentioned in the previous blog post regarding the CPUC, and an increased understanding of market potential for grid services is necessary to ensure that the benefits outweigh the costs making investment plausible. The second track of the Roadmap focuses on developing enabling policy. Under the second track, wholesale and retail signal interaction needs to be defined to ensure consistency. The Roadmap’s third track focuses on development and support of enabling technology. Under the third track, standards that support VGI aggregation, communication, and control requirements need to be developed to facilitate coordination between manufacturers, grid operators, and policy makers. While still largely conceptual, efforts are currently underway in California to address each track of the VGI roadmap to ensure grid reliability and consistency of EV integration while the EV market rapidly grows in response to California’s clean energy goals.

Value: Track 1

To address the uncertainty of VGI value on a national level, the Department of Energy’s Office on Renewable Energy and Energy Efficiency entered into a Memorandum of Understanding (MOU) with the Edison Electric Institute (EEI) on June 8, 2015, to better determine the value of VGI and accelerate the growth of the electric transportation market. Under the MOU, the parties will commission “one or more third parties to assess the national economic impact and benefit to utility ratepayers of transportation and electrification and to examine the effectiveness of utility investments in electric transportation related activities . . . in market growth.”

In the state of California, numerous EV pilot projects are in progress to study the value of VGI as called for under the first track of the Roadmap. V2G presents a brand new challenge for valuing EV’s potential for generation. In order to determine what value V2G services could provide, the Los Angeles Air Force Base has initiated a pilot project in which it will replace its entire fleet with plug-in electric vehicles (PEVs). The new PEV fleet will be the first fleet connected back to the grid to test two way interaction by providing the grid with power and excess storage capacity. CAISO will provide oversight of the sale of ancillary services onto California’s grid. This project will be the first to address the technological, political, and regulatory challenges that face V2G, hopefully providing a blueprint for future V2G projects.

Standards Supporting VGI Aggregation: Tracks 2 and 3

California is working to develop the policy and technology necessary to facilitate aggregation of DG as required under the second and third tracks of the Roadmap. On July 16, 2015, CAISO’s Board of Governors approved a proposal titled “Expanded Metering and Telemetry Options Phase 2 Distributed Energy Resources Provider (DERP)” (DERP Proposal), which allows aggregated Distributed Energy Resource (DER) to participate in California’s wholesale energy market. CAISO requires that current grid market-participating generators have a load of at least 500 kilowatts (kW) to participate in the wholesale market so that CAISO can adequately manage the resources. This CASIO limitation prohibits small individual DG, such as individual EVs, rooftop solar, and energy storage, from participating in the wholesale market. This limitation restricts the potential for additional generation from non-traditional sources that align with California’s clean energy goals. However, CAISO currently requires that DG resources are aggregated and required to use consistent and strict telemetry and metering requirements to be considered for market participation. Under the Proposal, which will be subject to Federal Energy Regulatory Commission (FERC) approval, DERs would be permitted to aggregate various individual resources to meet CAISO’s 500 kW minimum participation limit. To facilitate the provision of services by aggregated DER onto the grid, the DERP Proposal has created an entirely new type of market participant, the Distributed Energy Resources Provider (DERP).

A DERP is defined as an independent owner/operator of one or more aggregations of individual DER that participates in CAISO’s wholesale market. A DERP is required to execute a DERP agreement with CASIO and is responsible for providing CAISO with accurate information and timely updates about DER power flows. In its most basic form, the DERP Proposal develops technical standards and rules, as recommended under track 3 of the Roadmap, for how a provider can aggregate DERs, such as EVS, and dispatch them to serve the same grid markets that are open to utilities.

CAISO’s rule that an underlying sub-resource must be CAISO-metered is one of the biggest barriers to the aggregation of DER. CAISO-metered systems require an accurate measurement method that can communicate in real-time between each connected resource and CAISO’s operations center. While power plant and utility-scale resources can easily meet this requirement, it is much more difficult and expensive for an individual DER to become CAISO-metered. As a solution, CAISO has proposed that DERP aggregators be considered and designated as scheduling coordinators (SCs) as opposed to CAISO-metered entities. SCs are responsible for implementing and enforcing procedure, which must be evaluated and approved by CAISO, to accurately measure power flows. The key is that SCs will be able to connect their fleets of DERs using the internet and CAISO approved standards and procedures which requires much less effort and expense. However, EV owners will likely need to be offered some form of incentive for providing a DERP with their EV, which would likely subject EV owners to certain requirements and restrictions and subject their batteries to more use and therefore more rapid degradation.

If the DERP Proposal is approved by FERC, CAISO would be able to select a broader variety of resources to balance supply with demand, while integrating more renewable energy to the grid as required by California’s ambitious clean energy goals. However, CAISO has placed strict limits on how DERs will coordinate with CAISO commands and which types of technologies are permitted to be aggregated.

CAISO’s first limitation on the aggregation of DERs is that DERPs are not allowed to combine different types of DERs within a single aggregation unless the DERP aggregation is limited to a single pricing node (PNode). PNodes are simply pricing locations or points where prices are assigned to the location where a generator connects to the grid or where CAISO’s transmission system connects to substations that ultimately carry electricity to end users. The reason DERPs are not able to mix and match DERs across multiple PNodes is because CAISO’s current software is unable to model the impacts of congestion relief created by having multiple types of resources responding in an unpredictable manner at different points on the grid. However, if an aggregator is able to limit its aggregations to a single PNode, the only barrier it will have to overcome is whether it has enough DERs to produce the minimum 500 kW required to participate in the wholesale market.

If DERP aggregations are spread across multiple PNodes, CAISO will limit those aggregations to a maximum of 20 MW and will require that the resources responding to dispatch signals move in the same direction. For example, DERPs would not be allowed to have some EV stations charging batteries while others discharged power to the grid, all resources would be required to be either charging or discharging.

While some consider the DERP Proposal to be modest in scope, CAISO is working in uncharted territory and the Proposal creates the initial framework that can and will be improved upon as policy, technology, and the electric vehicle market progresses to meet the goal of 1.5 million ZEVs on California roadways by 2025.

Katrina Wraight coauthored this blog post.  Katrina is a legal intern for EPIC and a third year law student at the University of San Diego School of Law.

About Joe Kaatz

Staff Attorney at the Energy Policy Initiatives Center, University of San Diego School of Law.
This entry was posted in Greenhouse Gas, Legislation, Transportation, Uncategorized. Bookmark the permalink.

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