Another California City Drops Gas Peaker in Favor of Clean Portfolio

The Southern California city of Glendale officially dropped a $500 million gas peaker project that it nearly approved last spring, and instead picked up the mantle of clean energy leadership.

The city council voted in April 2018 to pause development on the 262-megawatt repowering of the Grayson Power Plant and examine clean energy alternatives. Now, the municipal utility has completed an examination of 34 clean energy proposals and selected a diverse portfolio it says will meet reliability needs and save ratepayers $125 million compared to the old portfolio.

In other words, Glendale Water & Power (GWP) went through an energy transition in a little over a year.

“The future envisioned herein represents a complete transformation of the way GWP provides reliable, affordable and clean energy resources to the citizens of Glendale,” the utility wrote in a new integrated resource plan approved last week.

When the earlier planning process started back in 2014, batteries were not on the menu of cost-effective options, so a recognized capacity need — in this case, the retirement of a plant that dates back to the 1940s — essentially guaranteed a gas plant solution.

“At that point in time, thinking about reliability, the storage market was still very much in its infancy and very expensive still,” GWP General Manager Steve Zurn said in an interview.

Since then, large-scale batteries have become competitive, but so have networks of small-scale energy devices located in homes and businesses.

The final portfolio, proposed in Glendale Water & Power’s new integrated resource plan, would repower the Grayson Power Plant with a 75-megawatt/300-megawatt-hour Tesla battery installation and up to 93 megawatts of fast-ramping Wärtsilä engines.

Customer-focused resources will add another 50 megawatts, including 12.8 megawatts from home solar and batteries installed by Sunrun, 10.5 megawatts of demand response by Franklin Energy and 20.4 megawatts of energy efficiency and demand response from Lime Energy Services. That demand reduction constitutes about 14 percent of the utility’s roughly 350-megawatt peak load.

The new capacity was needed as backup in case the local grid lost its first- and second-largest power sources at the same time — not an outlandish possibility, given the fire risk in the dry hills surrounding the city. That role meant the expensive gas peaker would have had little to do most of the time.

Instead, the batteries, solar PV and efficiency investments will provide other benefits regularly, lowering peaks and reducing customer bills, in addition to serving local capacity during extreme events.

“It’s an astounding victory,” said Earthjustice attorney Angela Johnson Meszaros, who testified against the original gas-plant proposal on behalf of the Sierra Club. “It really does highlight what it looks like when the community turns out and demands better. And good on the Glendale City Council for letting better happen.”

Once the city council called for clean alternatives, GWP put its original plan on hold and got a request for clean proposals out and back in three months. Then the methodical vetting process began, which happened to coincide with the utility’s new IRP deadline.

“It was like, ‘OK, let’s do this; these are good points,'” Zurn recalled of the decision to set aside the old plan. “Nobody made a mistake; it was just that technologies have advanced and it’s worth stepping back and taking another look.”

Wärtsilä’s shift toward green energy

The final proposal does include some fossil fuel infrastructure, but the choice of Wärtsilä engines is notable.

The company, a Finnish manufacturer of engines for ships and power production, has adopted a long-term decarbonization strategy that envisions running its equipment on synthetic biofuels one day. It also acquired energy storage integrator Greensmith and has been active in storage projects as another form of flexible power.

Similarly, GWP expects to be able to convert the engines to run on biogas, renewable natural gas or even hydrogen, depending on the commercial maturation of those fuels. In the meantime, 18.5-megawatt units give the utility more precision to meet peaks than firing up much larger turbines. And if it’s possible to reduce the number of engines and still meet reliability needs, Zurn said he’s happy to do that.

The city council gave preliminary approval for the new batch of contracts. Now, GWP has to finalize the contracts and conduct a new round of environmental review. The company is working toward earning final approval next spring, which would allow demolition at Grayson to start next summer.

With Grayson’s original repowering off the table, viable new gas plant proposals appear to be extinct in California.

Calpine in May abandoned its Mission Rock peaker on the Santa Clara River, and local opposition scuttled NRG’s Puente Plant, which would have occupied the beach at Oxnard. Los Angeles Mayor Garcetti canceled the renovation of three gas plants in his city’s municipal utility territory, committing to entirely clean energy instead.

 

Another California City Drops Gas Peaker in Favor of Clean Portfolio, by Julian Spector, Greentech Media, July 30, 2019.

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