Leap gets about 45% of California's latest demand response auction award
- Leap, developer of a universal distributed energy trading platform, announced Tuesday morning that it was selected to supply 90 MW of demand response capacity to investor-owned utilities through California's 2019 Demand Response Auction Mechanism (DRAM).
- Leap boasts the largest share among participating DRAM vendors and will provide 45 MW each to Southern California Edison and Pacific Gas & Electric for delivery next year.
- Regulators launched the DRAM pilot in 2015, in order to test utilities' ability to procure aggregated demand response for resource adequacy. The commission recently extended the 2018-2022 demand response programs application proceeding, allowing more time to review the program.
Thomas Folker, CEO of Leap, says one of the things that makes his business successful also may be holding back DRAM.
"Success of DRAM as a program is still up for debate," he told Utility Dive last week.
Barriers to entry include a complex signup process and load requirements of at least 100 kW. And keeping it in a pilot stage, with reduced capacity available, has not helped to attract participants, he said. But Leap's system acts essentially as an aggregator of aggregators and will accept any load.
"Historically, demand response was built around very large loads with fixed peak performance in August," Folker said. Leap's system is trying to change that. "If you're only available for 1 kW around Christmas, that's fine."
Leap partners with companies that manage distributed resources and grid-edge power loads, including electric vehicles, battery energy storage and HVAC systems. Leap said that by taking a "significant position" in wholesale energy markets through DRAM, the company "will greatly expand the availability of loads that can participate in demand response in California."
The company will not reveal how much load it has connected to its system. "We actually have aggregated loads from a whole bunch of resources," Folker told Utility Dive. "We are hardware and load agnostic. ... It's one of the reasons we think we can provide an extra service."
So far, Leap says it has raised $1.6 million from venture capital firm Congruent Ventures and angel investors that include Tom Dinwoodie, co-founder of SunPower Corporation Systems.
For now, DRAM will remain in the pilot phase. The commission's extension pushes the deadline of the proceeding by a year, until July 17, 2019, and expands the scope in order to "determine the next steps for the demand response auction mechanism."
In the latest auction, the state's investor-owned utilities acquired about 200 MW of demand response resources — representing a steady rise from 40 MW in the first auction, and 80 MW in the second.
CORRECTION: A previous version of this story misnamed the developer. The company is named Leap.
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