The Scheduled Dispatch Program (“SDP”) Explained:

Underlying Tariff Comparison

The Scheduled Dispatch Program (SDP) is part of the Emergency Demand Response Program issued by the Hawaii Public Utility Commission to help balance the electrical grid as the island switches from older fossil fuel power sources.

This program will compensate customers who install a new battery and schedule it to discharge over a 2-hour period during the time of evening electrical system peak usage. Furthermore, these customers will be allowed to install up to 5,000 watts (5kW) of more solar PV generation capacity without impacting their underlying tariff program status (Net Energy Metering “NEM”, Customer Grid Supply “CGS”, etc…).

To encourage program participation, the program is based on an upfront incentive payment from Hawaiian Electric to the customer who purchases a battery+ PV and enroll their system into the program for a ten-year commitment, the first two (2) years of which will be dedicated to 2-hour “hard scheduled” dispatch during high electrical usage times in the early evening. This will most likely be somewhere between the 5pm to 9pm timeframe when most people come home from work and start using energy for cooking, air conditioning, TV, electric car charging, etc.

This scheduled dispatch will be required through December 31, 2023, for a one two-hour period each day, scheduled at such time that Hawaiian Electric will designate.Participating systems will be programed to dispatch battery-supplied energy to either serve onsite load and/or export any excess energy to the grid over the 2-hour period. Customers must commit to dispatch a certain power level during the two-hour period, which will determine their upfront incentive amount.

The battery systems will also be programed to automatically prioritize battery charging from onsite solar PV during peak production times of the day in order to most reliably serve the 2-hour battery discharge commitment as scheduled by Hawaiian Electric.

Energy exported to the grid from the battery storage discharge during a scheduled event will be compensated based on the terms of the participating customer's underlying tariff program (e.g., less than retail rate for systems under CGS and CGS+).

System Underlying Tariff Program Current Export Rates on Oahu Current Estimated Retail Rate on Oahu Calculated Difference
Net Energy Metering (NEM) $0.30 $0.30 $0.00
Customer Grid Supply (CGS) $0.1507 $0.30 -$0.15
Customer Grid Supply+ (CGS+) $0.1008 $0.30 -$0.20
Customer Self Supply (CSS) $0.0 $0.30 -$0.30
Standard Interconnection Agreement (SIA) $0.0 $0.30 -$0.30

Since the program incentive encourages systems to dispatch battery-supplied energy to either serve onsite load and export and excess power back to the grid over the two-hour period, it is important to factor in the export rate of energy of the participating customer's underlying tariff program as mentioned above.

Since Customers with existing NEM systems will continue to receive retail credits for export under this program, it is our opinion that existing NEM customers may receive the greatest benefits out of this type of program. As the tariff export rate reduces and the difference between retail rates increase, as shown here, the value proposition becomes less attractive.

An existing system under the original NEM program works by offsetting daytime energy usage with solar electricity while also allowing excess solar production to be exported back to the grid as full retail credits toward your electric bill. See Figure 1.

Figure 1: Existing NEM System

Systems under the NEM program will see very little negative effect on their existing electric bill by charging their battery during the day and exporting excess energy back to the grid during the two-hour dispatch period since they will be receiving retail rate compensation either way. They are basically just “moving” their export from mid-day to the scheduled hours of evening electrical system peak usage.

The only difference is attributed to the slight round trip efficiency losses of the battery during the charging and discharging cycle. See Figure 2.

Figure 2: New NEM System under SDP

Systems with battery energy storage under CGS, CGS+, CSS and SIA (basically any tariff other than NEM) typically have their systems already configured in a way that maximizes solar self-consumption. Solar self-consumption is a battery mode of operation that maximizes the use of onsite PV electricity for its own electrical needs offering greater economic benefits and better control of energy bills. In this mode, instead of selling energy back to the grid at a lower rate, one can store it in a battery and use it at night to offset retail rates. See Figure 3.

Figure 3: Solar Self-Consumption

There are 3 items that may be detrimental to the economics of this program for tariffs that compensate export at anything less than retail rates.

  1. Priority charging of the battery system from solar which may lead to unwanted grid usage during the mid day period.
  2. The holding of stored energy in the battery until the scheduled discharge period. This may prevent the battery from performing the function of solar self-consumption between the mid day period and when the battery is scheduled to dispatch. This may lead to unwanted grid usage during the late afternoon period.
  3. To maximize the incentive, this program encourages the battery to export excess energy to the grid during the 2-hour dispatch period. This may lead to unwanted grid export at the lower export credit rate during the early evening period.

Adding all 3 of these items together may cause a negative impact on your electric bill saving when compared to solar self-consumption mode which strives to offset retail rates during all times of operation. As seen by comparing Figure 3 above and Figure 4.

Figure 4: Scheduled Dispatch Program

We hope this helps explain and illustrate the challenges of modeling the economic benefits of the Schedule Dispatch Program under different tariff structures. Again, it is our opinion that existing NEM customers may receive the greatest benefits out of this type of program. Although there may be other reasons and circumstances that justify exploring the benefits further under other tariff structures, we wanted to make sure to set proper expectations.

For more information on the Scheduled Dispatch Program, please visit https://www.kumukit.com/scheduled-dispatch-program.html