Distributed Capacity Procurement (DCP) is an innovative initiative aimed at transforming the energy landscape by leveraging distributed energy resources (DERs) to create a more efficient, sustainable, and cost-effective power grid. One of the key components of a DCP is Value Chain Management, which plays a crucial role in ensuring deployment services success and maximizing economic development benefits.
What is Value Chain Management?
Value Chain Management is a holistic approach to organizing and maintaining a competitive ecosystem of approved local vendors and original equipment manufacturers (OEMs) to deliver the necessary capacity in the market. This involves conducting bids for vendors across various aspects of the value chain, including equipment manufacturing, design, construction, and operations and maintenance (O&M).
At Sparkfund, we have extensive experience in Value Chain Management. The company has deployed projects with an installed value totaling more than $455M across 3,119 projects, encompassing both residential and commercial & industrial (C&I) sectors. By working with 191 different vendors and covering more than five technology categories, we continue to demonstrate our expertise in managing the complex energy value chain.
One of the primary objectives of Value Chain Management is to ensure project delivery at or below targeted $/MW, protecting ratepayer investments. This is achieved through rigorous vendor selection, competitive bidding, and close monitoring of project costs. Additionally, Value Chain Management involves ongoing monitoring, preventative maintenance, and repairs to keep the installed units working optimally, ensuring long-term performance and reliability.
Energy Value Chain Optimization
In the face of an inefficient energy value chain, all participants navigating the energy transition require an experienced partner like Sparkfund. By procuring and delivering capacity across each value chain segment, Sparkfund helps lower upstream prices while maximizing downstream grid value for customers.
Sparkfund identifies, prioritizes, and manages vendors and OEMs across the value chain, ensuring that each installation delivers the critical impact necessary to unlock grid value at scale. This involves overseeing end-to-end delivery, deployment, and maintenance of market-quality DER projects, ultimately meeting specific grid needs and efficiently deploying ratepayer dollars at the nodal, zonal, and building levels.
Economic Development Benefits
Value Chain Management within the DCP model not only optimizes the energy value chain but also contributes to significant economic development benefits. Local vendors have the opportunity to bid on competitive solicitations to implement and maintain hundreds of megawatts of DERs. This vibrant supply chain creates local jobs within the utility's territory and supports an increase in the number of skilled workers in the value chain for the design, installation, operation, and maintenance of DERs.
By fostering a competitive and efficient energy value chain, Sparkfund's Value Chain Management services stimulate economic growth, create employment opportunities, and build a skilled workforce to support the ongoing energy transition. This, in turn, strengthens local communities and contributes to overall economic development.
Delivery a Vibrant Supply Chain and Supporting Local Communites
Value Chain Management is a critical component of DCP, enabling the efficient deployment and optimization of distributed energy resources. By leveraging DCPs and the expertise of companies like Sparkfund, utilities and commissioners can effectively manage the energy value chain, ensure cost-effective project delivery, and maximize grid value for communities across their region. Moreover, by promoting a vibrant supply chain and creating local jobs, Value Chain Management within a DCP contributes to significant economic development benefits, supporting the transition to a cleaner, more sustainable energy future.