SANTA MONICA ADVANCED ENERGY DISTRICT

Transcription

1 SANTA MONICA ADVANCED ENERGY DISTRICT Proposal for California Energy Commission Grant Funding Opportunity Accelerating the Submitted by CITY OF SANTA MONICA

2 Primary Applicant Advanced Energy District Partners City Yards Microgrid Partners

3 Executive Summary 1. Project description: When Santa Monica City Hall took ownership of the 14.7-acre property on Michigan Avenue near 24th Street in the 1940s, it was a small part of the civic framework. Now called the City Yards it currently houses the City s facilities maintenance, custodial services, street maintenance, fleet maintenance, traffic operations, resource recovery and recycling, water and wastewater operations, hazardous waste storage and a Fire Department training area. In January 2015, the City Council voted to move forward with a $115 million redevelopment of the industrial site to better align the operational relationships and improve the functionality of the spaces used by City s 9 departments and agencies that occupy this site. The timing of this planned site redevelopment fits well with the Santa Monica City Yard Microgrid Project and the local Bergamot Area Plan. The City Yard Microgrid Project is an important and valuable element of the anticipated redevelopment approach and planned use of this site. By integrating site-based renewable energy sources with emergency power capability and sophisticated load management technologies though a microgrid-based design, this project will provide robust resiliency features and disaster preparedness to these critical municipal services. In addition, the benefits and capabilities of the microgrid will be shared with local businesses and residential participants though Community Aggregation techniques. Finally, this project will evaluate different governance structures, business models and financing options; and mix and match options as appropriate and optimal. Potential governing/legal structures include: 501c3s, community facilities districts (CFD), business improvement districts (BIDs), joint powers authority (JPA), or a combination of the above. Potential project business models/ownership structures include P3s, public and private ownership. Potential financing options include public financing options (EIFDs, assessment districts, lease-revenue bonds, etc.) and private financing options (private bonds, commercial debt, equity, etc.). Our approach is to optimize the overall structure to keep costs low, manage risks and generate public benefits. 2. Project goals and objectives: Like most other cities, towns, and municipalities in California, the City of Santa Monica provides many required amenities to its citizens and businesses. At the City Yard, the Public Works Department provides a diverse set of essential services to the community that includes water supply production, treatment, and collection; wastewater and storm water collection; and collection and proper management of recoverable material resources including recycling of solid materials and household hazardous materials. The City Yard also houses the Fire Department training area and several fleet and street maintenance functions. Since these are common public services, the ability for cities to provide them cost-effectively, with high reliability and low environmental and carbon impacts, is vitally important to California and effectively achieves many of the strategic objectives of state energy and environmental policies, the CPUC Program Areas, and CEC EPIC Investment Plan. Specifically, the requirements that define the goals of this City Yard Microgrid Project include: The City Yard provides several mission-critical services to citizens of Santa Monica. These services require a modern, resilient, and economical source of electrical power to function regardless of the occurrence of man-made or natural disasters, and the potential loss of power availability from the regional grid. The City has established an extensive set of sustainability and low-carbon energy targets and believe that site-based renewable energy is a viable and necessary solution

4 Executive Summary to achieving these targets. The redevelopment of large sites such as the City Yard should incorporate renewable and sustainable energy technologies to the greatest extent possible, with ZNE or Net Power Exporting as a goal. The City desires a project delivery and implementation approach that is consistent with prudent project financing methods and allows for private sector involvement and investment. The project development and financing approach will seek to appropriately manage/mitigate project, technical, and financial risks to the City. The City Yard Project should provide benefits and value to the surrounding neighborhoods and citizens, such as the Bergamot Area which consists of 143 acres of former industrial land that is planned to be transformed into a walkable, sustainable and innovative neighborhood. A Community Choice Aggregation (CCA) approach may hold a solution to supplying these participants with an economical and sustainable energy supply from the City Yard Microgrid Project and will be evaluated for feasibility. The City Yard Microgrid will serve as a relevant and replicable model for most other cities in California due to the common municipal services and departments that are situated at this site. The innovative energy production technologies, energy storage options, site vehicle and transportation integration, microgrid solutions, and benefits sharing with local community participants will showcase a variety of viable and attractive advanced energy community concepts to other cities. 3. Explanation of how project goals and objectives will be achieved, quantified, and measured: The City Yard Microgrid Project will primarily achieve the project goals stated above through the successful planning, design, permitting, implementation, and operation of a fully functioning community-scale microgrid. The experience and results achieved during each phase of this project will be fully documented with the intention of sharing lessons learned with both the project stakeholders as well as other communities and interested parties throughout the state. The performance metrics of the microgrid system, including on-site power generation levels and loads which are served by the system, will be continuously measured (i.e. near real-time measurement) and reported via a publicly accessible, web-enabled, system dashboard. 4. Project task description: The following are the anticipated primary tasks for this Phase 1 project: Task 1, General Project Tasks Task 2, Use Case Study Methodology for the Owner s Project Requirements Task 3, Distributed Energy Technology, Research and Selection Task 4, Microgrid Modeling and Optimization Task 5, Business, Regulatory, Financial Models and Implementation Plan Task 6, Case Study, Tools, and Dissemination Task 7, Project Benefits 5. Agreement management description: The City Yard Microgrid Project is being managed by the City of Santa Monica, with the following entities supporting this Phase 1 effort: 1. Arup North America, Ltd: engineering, technical, financing, and transaction advice 2. University of California Irvine: Microgrid regulatory and technical review. 3. Energy + Environmental Economics (E3): CAISO and financial modeling, benefits 4. ICLEI: Case studies and City/Community Outreach

5 Fact Sheet The Issue Microgrids have the potential to solve many issues as increasing distributed generation, electric vehicle charging, and plug loads continue to transform and stress the aging electric grid infrastructure. Microgrids, both single-owner and multi-user, have have yet to reach a commercially viable stage. Lack of awareness, regulatory ambiguity and a high level of perceived risk are barriers to the consideration of microgrids. Notable microgrid installations in the United States include university campuses, military bases and jails, but are not widespread in major cities where demand, consumption, reliability and sustainability are pressing issues for communities and the grid. Compared to single-owner campuses, multi-user microgrids (MUMs) face many challenges including: Non-utility actors are unable to account for retail level electricity sales There is a lack of private investment in shared electric infrastructure There is no regulatory or statutory support to realize revenue streams or formally recognize microgrids Real estate developers and property managers are generally unaware of the opportunities and risk averse to joining new district systems The energy planning process typically does not include municipal government or district scale stakeholder engagement For these reasons, local governments can play critical roles as an information clearinghouse, an anchor load, a public partner, a regulatory guide and financial backer when it comes to developing microgrids and district-scale renewable energy systems. This way, local governments can achieve a cleaner, more resilient grid by removing the myriad market barriers to private investment and community participants as well as deploying municipal district energy and microgrid systems that support its own facilities. Additionally, as Community Choice Aggregators, local governments assume a new role as a utility capable of incentivizing, building and retailing electricity. Project Description The City of Santa Monica proposes to develop an Advanced Energy District based around a multiuser microgrid, based in its City Yards facility, as a demonstration model that will lay a foundation for policy and financial frameworks to enable public and private investment in future district scale systems to come. The project offers a unique opportunity to develop advanced energy systems that are located at infill sites and have varying degrees of local government control. The goal of the City Yards Microgrid is to develop a distributed renewable energy and storage system that achieves at or near zero-net energy status, lowers demand and provides

6 Fact Sheet benefits to the Santa Monica City Yards, Bergamot Plan Area and the Mountain View Mobile Home Park community. The Santa Monica City Yards, a 14.7-acre site located over a former landfill, serves the majority of the City s Public Works operations. In the coming years, the site will be redeveloped in order to accommodate the incremental growth and changes of City services and operations over the years. The City Yards is located adjacent to Stewart Park, the Mountain View Mobile Home Park (MVMHP) and the Bergamot Arts Center (BAC), all of which are owned by the City. BAC is also slated for redevelopment by a private firm which will add commercial and residential uses to the 5 acre site. The redevelopment of both the City Yards and BAC provide an opportunity to plan, design and develop a distributed energy system to be sited within the Yards, and scaled to meet the needs of MVMHP and the future growth of BAC. In total, the project area is 25.3 acres. The project will utilize four strategies to establish a multiuser microgrid. First, the City will own and operate its own microgrid, serving the City Yards facility. Second, the City will work with a private developer on City-owned property, known as the Bergamot Arts Center, to develop appropriate regulations and incentives through the entitlement and development agreement process and establish a unique partnership model. Third, the City will leverage its control over City-owned property, known as Mountain View Mobile Home Park, which is rented at affordable rates to mobile home tenants. A master plan over this area will be developed to delineate the integration and interconnection between the City, the public and the utility. And finally, the City will explore the utility of its role as a Community Choice Aggregator to incentivize, construct and generate retail power supply In total, the project area is 25.3 acres (see Figure 1).. Anticipated Benefits for California Microgrids can provide system reliability, cost reductions and renewable generation integration into the grid providing benefits to California ratepayers. Microgrids provide a locally controlled resource that can serve new electricity demand and can address impacts on the grid with more photovoltaics, electric vehicles and energy storage systems. As more distributed energy resources integrate into an aging grid, microgrids will need to be a part of the solution to help advance and coordinate the State s and local communites goals with respect to renewable energy, energy efficiency, electric vehicles and greenhouse gas emissions. Facilitating public and private partnerships and investment in multiuser microgrids will reduce risks and encourage a competitive and cooperative market of supply and demand management where small and large customers may be market participants. Developing a proof of concept and permitting pathway for microgrids will also help to remove market barriers. Project Specifics Grant lead: City of Santa Monica Advanced Energy District Partners: ARUP, Energy & Environment Economics, Public Finance Management, UC Irvine Power & Energy Program, ICLEI Local Governments for Sustainability, Southern California Edison City Yards Partners: Hathaway Dinwiddie Construction Company, Miller Hull Partnership, Buro Happold Engineering Bergamot Arts Center Partner: Worthe Development Group Amount: $1,500,000 Term: