Monday, February 18, 2019

Can Calif. Go All Green Without a Western RTO?

By Hudson Sangree

California may be able to meet its goal of relying entirely on renewable and other zero-carbon electricity sources by 2045, but it’s going to be more difficult and more expensive without a wholesale market that includes multiple Western states, advocates of CAISO regionalization contend.

“This is essentially like leaving one of your best tools on the workbench when you’re trying to build a very complicated project,” said Carl Zichella, western transmission director for the Natural Resources Defense Council, a staunch proponent of a Western RTO. “You may end up with something jury rigged.”

Gov. Jerry Brown, CAISO leaders and other promoters of regionalization held the same opinion when they tried to pass AB 813 this year. The bill, which failed, would have started the process of turning the ISO into a multistate entity by creating a governing board independent of the governor and legislature.

Supporters reasoned it would greatly help California achieve a carbon-free grid if in-state generators could more easily sell excess solar power to neighboring states and buy clean energy from states that produce more wind and hydroelectric power.

Mojave Desert solar arrays are a large part of the state’s renewable energy production. | U.S. Dept. of the Interior

Solar power in the Mojave Desert, for instance, peaks in the late afternoon when it’s often least-needed in California but could be useful in states one time zone to the east — where residents of Arizona, Colorado and Montana are arriving home from work, turning on their TVs and adjusting their thermostats.

Wind from southeastern Wyoming and eastern New Mexico, meanwhile, could provide power after sunset in California, which currently relies on natural gas plants to meet each evening’s peak demand.

Wind power in Wyoming could help California meet peak demand, replacing natural gas. | Bureau of Land Management

That was a major reason behind AB 813. The bill stalled in the Senate Rules Committee on the last night of the legislative session Aug. 31. It was the third time in three years that efforts to turn CAISO into an RTO had fizzled. (See CAISO Expansion Bill Dies In Committee.)

In contrast, lawmakers passed, and Brown signed, the session’s other major piece of energy legislation, SB 100. The new law establishes an ambitious timeline for California to rely increasingly on renewable and zero-carbon energy sources, with the goal of achieving 100% carbon-free electricity by 2045. Along the way, it requires the state to accelerate its renewable portfolio standard program to approximately 50% by 2026 and 60% by 2030. (See Calif. Gov. Signs Clean Energy Act Before Climate Summit.)

That’s a daunting challenge. In 2017, California got about a third of its electricity from natural gas-fired plants and more than 40% from hydroelectric, solar, wind and other renewable sources, according to the California Energy Commission. Ending the reliance on natural gas to meet peak demand will be difficult, especially because wind and solar often aren’t available during the morning and evening peak periods. (The state’s last nuclear generator, Pacific Gas and Electric’s Diablo Canyon Power Plant, is scheduled to be retired in 2025.)

Mixed Reaction

For many supporters, the clean-energy and CAISO regionalization bills went hand in hand, with the goals of SB 100 achievable largely through a Western RTO.

“Right now, management of the Western grid that powers our homes and businesses is severely fragmented, with 38 separate [balancing] authorities managing electricity generation and flows over 14 states, two Canadian provinces and northern Mexico,” Zichella wrote in an NRDC opinion piece. “This makes it harder and more expensive to add renewable energy generation here and elsewhere in the region, because each time the electrons flow through one of the authorities, a new charge is added.”

Without regionalization, California will have to access other states’ electricity through bilateral contracts and pancaked transmission access charges, Zichella said in an interview with RTO Insider. “It’d drive the cost up dramatically not having them in the wholesale market where the lowest cost [power] is dispatched first,” he said.

Other interest groups supported SB 100 but not AB 813. They feared partnering with the coal-burning states of the Interior West could undermine California’s clean energy push. (Today, California has only one small coal-fired power plant and imports just a tiny percentage of its energy from out-of-state coal-burning generators, according to the U.S. Energy Information Administration.)

The Sierra Club, for example, hailed the passage of SB 100.

“It’s impossible to overstate how significant it is for a state as large and influential as California to commit to 100% clean energy,” the group’s executive director, Michael Brune, said in a Sept. 10 statement.

But the Sierra Club opposed creating a Western RTO, saying CAISO regionalization could result in “resource shuffling.”

“That is, it might actually encourage certain coal-heavy power companies to extend the life of their plants in one part of the West and shift the renewable energy to California,” the group said in a message opposing AB 813. “All that extended and increased use of fossil fuel plants to accommodate the ability of California’s ‘excess’ renewable energy to flow east and the Interior West’s supply to flow to California can add up to more localized air pollution, especially for communities already struggling with dirty air, and more greenhouse gas pollution.”

California can and should go it alone, those who opposed AB 813 but supported SB 100 argued.

“Rather than removing California authority over CAISO and eliminating a board appointed by the governor and subject to Senate confirmation, the legislature should direct CAISO to explore other measures that serve the goal of optimizing system operations, reducing GHG emissions, and addressing concerns about overgeneration and curtailment,” read a joint statement to the State Legislature by Sierra Club California, The Utility Reform Network, the State Building and Construction Trades Council of California and other labor unions.

California curtails large amounts of solar energy during many months. | CAISO

Among the coalition’s proposals was expanding the Energy Imbalance Market to include additional Western utilities and allow day-ahead scheduling. It said an expanded EIM would significantly reduce curtailments of renewable resources in California while allowing states to retain control over grid reliability, resource planning and transmission investment.

Steven Greenlee, a senior spokesman for CAISO, said the EIM helps avoid curtailment by selling renewable power on the real-time market and could do even more if day-ahead bidding is allowed. CAISO has a day-ahead market-enhancement initiative in the works, he noted.

“That’s going to help, but it’s still not quite as good as having a full-blown regional transmission market,” he said.

“It does appear possible to meet the 100% goal,” he added, “but the cost and challenge of doing so without a robust regional coordination effort will be significantly increased.”

Natural gas and renewables each make up a large part of California’s energy mix. | California Energy Commission

Some relatively simple methods could help reduce the state’s reliance on natural gas in accord with SB 100, he said. Such methods might include time-of-use rates to encourage consumers to use solar power when it’s most plentiful and demand response programs to alert consumers to change their energy use in response to peaks and troughs in electrical demand.

No Silver Bullets

Storage also could be a major piece of a solution, especially with improvements in cost and efficiency, Greenlee noted.

“Energy storage is going to be a game changer … if all of a sudden we see it go dirt cheap, and it’s just everywhere,” he said.

In February, FERC issued Order 841, requiring RTOs and ISOs to revise their tariffs to allow energy storage resources full market access and to ensure storage resources are eligible to provide all energy, capacity or ancillary services of which they are capable, while also enabling them to set clearing prices as buyers and sellers. Grid operators will also need to establish a minimum threshold for participation that doesn’t exceed 100 kW. (See FERC Rules to Boost Storage Role in Markets.)

Then in September, Brown signed SB 700, which will provide an additional $800 million in incentives over the next five years for consumers to purchase behind-the-meter storage systems.

Batteries, which have been limited in their ability to store and disperse energy, are improving thanks to companies such as electric carmaker Tesla, which also manufacturers utility-scale battery systems.

Probably more significant going forward, however, are systems capable of storing hundreds of megawatts such as pumped hydropower.

Zichella noted, for example, that the Eagle Mountain Pumped Storage Project — a controversial proposal in the California desert near Palm Springs — could store output from 1,300 MW of inexpensive solar power by using it to pump water uphill during the day and then releasing the water at night to spin turbines that would help meet peak demand. He also cited a proposed utility-scale system in Utah that would use renewable energy to compress air into underground chambers and release it later in the day to generate electricity.

Then there are storage projects that look and sound like science fiction. The 110-MW Crescent Dunes Solar Energy Project in Tonopah, Nev., uses thousands of revolving mirrors, called heliostats, to concentrate solar energy on a 550-foot tower and heat molten salt to 1,000 degrees Fahrenheit. The salt is stored in a thermal container, where it retains its heat for hours. That heat can be used at night to boil water and turn power-producing steam turbines, which light up Las Vegas.

The Crescent Dunes solar storage project near Tonopah, Nev., concentrates sunlight to heat molten salt to 1000 degrees. | Solar Reserve

With such large-scale storage, “you could have a much smoother variability curve” from wind, which is unpredictable and intermittent, and solar, which traditionally stops working after the sun goes down, Zichella said.

“None of these things by themselves are silver bullets,” he said. But added together they could help California pursue its goal of all-green energy. Then again, he said, another run at regionalization will likely happen in the next legislative session. (See Western RTO Proponents Vow to Keep Trying.)