Wednesday, March 20, 2019

Calif. Bill Would Introduce ‘Clean Peak Energy Standard’

By Robert Mullin

A top California lawmaker last week introduced a bill that would require the state’s utilities to meet an increasing amount of their peak energy demand with renewable resources and energy storage systems.

The proposed law would set a “clean peak energy standard” to reduce the reliance on flexible, gas-fired peaking plants to meet peak ramping needs as the state seeks to obtain 50% of its electricity consumption with renewable energy resources by 2030 (AB 1405).

State Assembly Speaker Pro Tempore Kevin Mullin (D), the bill’s sponsor, said that while California’s renewable energy and ambitious greenhouse gas reduction goals are “laudable,” they are “ultimately incongruous in the absence of a policy framework and new market mechanisms” that would allow CAISO to manage the impacts of increasing renewable penetration on the grid.

Mullin

“As more renewables are built toward the 50% [renewable portfolio standard] goal, more fossil fuel power plants will be built to provide flexibility and reliability, which is incompatible with the GHG reduction and cost-effective goals,” Mullin said in a statement.

The legislation defines a four-hour “peak load” time period that includes the hour leading up to, and two hours following, the hour of peak demand.

The law would require the California Public Utilities Commission to determine by Dec. 31, 2018, the percentage of “clean peak resources” — renewables and storage — being used by each of the state’s utilities to serve demand during the peak load period.

Each utility would have to meet increasing clean peak targets every three years beginning in 2020 and reaching 40% in 2029. The first year of the program would entail a 5% increase in such resources. Utilities would be required to meet the minimums for at least 15 days every month.

The rules would also apply to the state’s publicly owned utilities, which are not subject to CPUC oversight.

Use of clean peak resources would be subject to CAISO-approved measurement standards, while the CPUC would be charged with devising an “appropriate mechanism” for determining compliance with the clean peak standard, which could include a program of tradeable credits.

The bill also requires the PUC to consider developing other targets that would encourage the use of clean peak resources to provide additional flexibility and ancillary services.

A similar but less comprehensive bill has been introduced into the State Senate.

SB 338 would require the CPUC and California Energy Commission to consult with CAISO and “establish policies or procedures to ensure that electrical service providers meet net-load peak energy and reliability needs while minimizing the use of fossil fuels and utilizing low-carbon technologies and electrical grid management strategies.”

Under the Senate bill, “net-load peak energy” is defined as a daily period of three hours in which the last hour represents the interval of highest demand. The bill would permit the use of demand response and energy efficiency measures, in addition to renewables and energy storage.

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