Richmond Advanced Energy Community (AEC) Phase II Project

Zero Net Energy (ZNE) Alliance

Recipient

Davis, CA

Recipient Location

3rd

Senate District

4th

Assembly District

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$3,418,859

Amount Spent

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Active

Project Status

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Project Update

In 2023, the Richmond AEC project achieved several milestones. The project team finalized the design of the DERMS/VPP software and began preparing for integration with the MCE power procurement team in 2024. They also completed the first Zero Net Carbon Ready (ZNCR) home equipped with all-electric service and executed contracts with low-income homeowners for nine additional residential upgrades. A total of 32 homes were scoped for energy upgrades and are in the contract pipeline. The project team also made progress in deploying clean energy assets at commercial sites, including a large affordable multi-family development, City of Richmond facilities, and office and light industrial sites in the downtown core. These deployments focused on batteries and controllable loads that can be flexed in response to VPP and grid signals. However, the project also faced challenges. Educating and recruiting potential customers to join the VPP was initially difficult, but the team was able to overcome this by engaging with MCE and utilizing their customer programs and incentives. Another challenge was the lack of a clear compensation mechanism for buildings participating in the VPP, but a VPP tariff was approved in September 2022 to address this issue. First cost barriers and interconnection timeline delays caused by distribution system operators were also challenges that the project team addressed by aligning program efforts with incentives and rebates for DERs and adjusting their approach to battery deployments and identifying large controllable loads.

The Issue

To achieve robust zero carbon emissions targets, cities and load-serving entities require advanced energy solutions that enable the cost-effective deployment and integration of distributed and renewable energy resources, and the cost-efficient rehabilitation of homes to a near Zero Net Carbon standard. Achieving these outcomes in a disadvantaged community requires a combination of innovative technology, scaled finance, and the inclusive engagement of cities, NGOs, and community residents.

Project Innovation

The Richmond Advanced Energy Community (AEC) Phase II project demonstrates two breakthrough AEC models that will advance state and local goals for energy and carbon savings, while maximizing benefits to the local community, the grid, and low-income residents in greatest need. These include: (1) Implementation of a DER Community program that optimizes economic and resilience value at the community and grid level, while directing new revenues and societal benefits to low-income residents residing in California's Disadvantaged Communities (DACs); and (2) Implementation of the Zero Net Carbon Ready (ZNCR) Homes Program to finance the rehabilitation of blighted homes to ZNCR status and their re-sale as affordable infill and retrofit properties to low-to-middle income residents using capital provided by Social Impact Bonds. The scale-up of these strategies will be supported by preparation of an AEC Solutions Toolkit and an AEC Finance Toolkit disseminated through the Local Government Commission and the state's leading network of regional climate action collaboratives.

Project Benefits

The Richmond Advanced Energy Community (AEC) project in Richmond, CA is focused on demonstrating two innovative programs for advancing energy and carbon savings while benefiting the local community, the grid, and low-income residents. The first program is the Distributed Energy Resources (DER) Community, which optimizes economic and resilience benefits from energy storage, solar, and smart device deployment. This program aims to maximize clean energy deployment, procurement, scheduling, and customer billing through the integration of a Virtual Power Plant (VPP) software platform provided by MCE Clean Energy. The second program is the Zero Net Carbon Ready (ZNCR) Homes program, which rehabilitates blighted homes to ZNCR status and enables their resale as affordable infill properties for low-to-middle income residents. The project team has partnered with MCE Clean Energy to aggregate and schedule DER resources, including energy storage, smart thermostats, solar, heat pump space and water heating, and EV charging, to participate in the CAISO markets. By shifting load out of evening peak hours, the MCE VPP will help reduce stress on the grid, prevent power outages, and deliver savings to residents. The project also focuses on deploying clean energy assets at commercial sites, including affordable multi-family developments, City of Richmond facilities, and office and light industrial sites in the downtown core. Overall, the Richmond project aims to optimize clean energy deployment, provide economic benefits, and improve grid resilience while targeting benefits to low-income households and the community.

Affordability

The project will: 1) Reduce customer costs via installation of high efficiency and all-electric appliances; and 2) Enable ratepayers to participate in the emerging CAISO market.

Reliability

The project will enable participating homes and businesses to reduce peak load, shift energy use away from the evening ramp period, and participate in DER aggregation to balance local generation, storage, building loads, and grid.

Safety

Safety will be improved by: 1) Reducing the dangers of gas leak and explosions by endeavoring to replace natural gas appliances in residences; and 2) Decreasing the likelihood that contractors install devices in an unsafe manner.

Key Project Members

Richard Schorske

Founder/Executive Director

Subrecipients

City of Richmond

KILOWATT ENGINEERING, INC. dba kW Engineering, Inc

Orrick, Herrington & Sutcliffe LLP

Olivine, Inc.

Local Government Commission

Richmond Community Foundation

NHA Advisors, LLC

GRID Alternatives

Cohen Ventures, Inc. dba Energy Solutions

TRC Solutions, Inc.

Blue Strike Environmental, Inc.

Chaumette Consulting

Asian Pacific Environmental Network (APEN)