Can Colorado create a blueprint for a new kind of grid program?

Two state-level programs are quietly testing out new models for bringing distributed power onto congested distribution networks. These distributed grid resource programs, in Colorado and Minnesota, are larger in scale than residential virtual power plant programs — and more geographically precise than most VPPs today.

In both states, Xcel Energy has proposed building small power plant “nodes” of between one and five megawatts. These would be placed directly on the distribution grid, targeting highly constrained locations. Both programs are an attempt to relieve pressure on the transmission system and avoid expensive and timely upgrades, while adding flexible local capacity.

In Minnesota, Xcel plans to site batteries at local businesses, paying them directly for participation in its “distributed capacity procurement” program. The company proposed the program itself, in partnership with DCP provider Sparkfund, and earlier this month filed for regulatory approval with the state.

In Colorado, the path forward is a little more complicated. The program there is legislatively-mandated, and Xcel has opted for a third-party ownership model, meaning the utility wouldn’t necessarily be operating the resources itself.

Legislation passed last year makes it a statutory obligation for investor-owned utilities in the state (of which there are only two) to acquire dispatchable distributed generation paired with storage, with specific capacity requirements; Xcel must procure at least 50 MW of solar and storage each year in 2026 and 2027.

 

Can Colorado create a blueprint for a new kind of grid program? | Latitude Media