Distributed solar saved California over $650 million from 2013-2015

One of the most important aspects of the solar power revolution is how it is making daytime electricity cheaper, and thus lowering wholesale electricity prices more broadly. This becomes evident when electricity utilities project no new thermal electricity as the ‘lowest cost option‘. More evidence of this are contracts being signed today at 2.3¢/kWh, for delivery in just a few years. And this is before we note that distributed solar is saving billions in grid upgrades.

Researchers from Carnegie Mellon and the National Renewable Energy Laboratory (NREL) have come together to present a new report which puts numbers on these savings. A retrospective analysis of the market price response to distributed photovoltaic generation in California focuses on the wholesale electricity market in California governed by the California Independent System Operator (CAISO) that represents about 80% of the electricity usage in the state.

The research found that distributed PV reduced the ‘hourly mean whole electricity price’ by up to 2.9-3.2¢/kWh, 8-9%, during the peak period of 12-1 PM. This extrapolated to mean that throughout the day, utilities spent between $650-730 million less procuring electricity to provide to their customers.

The analysis looked at 15-minute solar electricity production estimates, as this is the interval that generators bid for in the day-ahead market.

The researchers looked across many system sizes and many regions of the state to make sure their data was accurately depicting a broad cross-section of distributed solar power in the state.

The end argument put forth by the authors is that not only will utility scale solar power lower the price of electricity, but so will the many gigawatts of solar power distributed on homes and businesses. This is something we in the field have always known, but now our industry has been around long enough to show it in hard numbers, based on actual data.

 

Distributed solar saved California over $650 million from 2013-2015, by John Weaver, PV Magazine, June 16, 2018.

SB 237 Threatens Community Choice Energy

SB 237, authored by California State Senator Hertzberg (D-18), threatens to increase the use of fossil fuels in California by undercutting Community Choice Energy (CCE) programs. The bill would allow businesses to circumvent CCE providers and buy electricity directly from suppliers. These suppliers would be subject to the state’s required minimum on the renewable content of the electricity – whereas CCEs consistently exceed those minimums. Therefore, this bill would reduce the use of renewables, hurt renewable energy job growth, and likely bankrupt all current CCEs. This bill would effectively end existing CCE programs and halt their future expansion throughout California.

Community Choice Energy allows communities, rather than the utility companies, to purchase electricity. CCE programs offer different packages with varying renewable content, wherein residents can choose the pricing that works best for them. This increases renewable use and decreases fossil fuel emissions, at cheaper prices than the electricity provided by utilities. The California Community Choice Association estimates 2018 bill savings to be at 99 million.

In California, community adoption of CCE is expanding rapidly, with 16 established CCEs and 4 more emerging, not to mention the many communities considering adopting a community choice program. San Diego is among the numerous cities considering the adoption of Community Choice Energy as a means of achieving its goal of 100% renewable energy by 2035. Before the end of this year, the San Diego City Council is scheduled to vote on whether or not to establish a CCE program.

Allowing businesses to buy electricity directly from service providers and bypass community choice could leave Community Choice Energy programs with power contracts but not enough paying customers. Through the California Clean Energy and Pollution Reduction Act, by 2021 CCEs are required to purchase at least 65% of their renewables through contracts ten years or longer. If enough businesses purchased power directly from service providers, and not from CCEs, existing CCEs would go bankrupt because of a lack of customers to pay for the long-term power contracts. Failure of current CCEs will jeopardize the future of Community Choice, potentially reducing renewable use in California at a time when decreasing fossil fuel use is imperative.

CCEs provide cleaner, lower-cost electricity to customers. If CCEs fail due to the passage of SB 237, their residential customers would be sent back to the higher-priced utility companies, hurting low-income residents the most. One such example is San Jacinto, a city in inland Southern California where 18.4 percent of citizens live in poverty. The San Jacinto CCE, San Jacinto Power, saves residents money on their energy bill and also invests in local energy sources, which brings jobs to the region. Most CCEs in California focus on increasing use of local energy sources, the community benefits of which could be lost if CCEs go bankrupt.

CCE programs save residents money and encourage local investment and job growth in the renewable energy sector. We cannot let these benefits imparted by CCE programs, nor the potential to expand CCE into more of California to be taken away from residents by the enactment of SB 237. Allowing businesses to use more fossil fuels and less local energy through direct-access purchasing is not a step, but a sprint, in the wrong direction, away from the clean and prosperous California we must strive for.

SB 237 has passed the Assembly Utilities and Energy Committee and will continue to the Assembly Appropriations Committee, before returning to the Senate. Make a call to your state legislators to tell them that you oppose SB 237; you can find your representatives here. Let them know that allowing businesses to buy directly from service providers and sidestep Community Choice Energy will harm our communities and our environment. Remind them that California needs to be reducing the use of fossil fuels and increasing the use of renewables now, by protecting and expanding CCE programs.

Laura Sisk-Hackworth is a SanDiego 350 volunteer who has worked in environmental and research science fields. Originally from the Inland Empire, she became concerned about climate change in 6th grade and has since worked to educate herself and others on the challenges a changing climate will present.

 

SB 237 Threatens Community Choice Energy, by Laura Sisk-Hackworth, San Diego Free Press, July 11, 2018.

A regionalized energy grid creates a home for California’s wasted renewables

These days, California’s renewable energy records are regularly broken.

During the summer solstice on June 21, California utility scale solar power set a generation record with solar producing equivalent to about 16 percent of all electricity consumed during the day.

And earlier this year, on April 27, California set two renewable energy records for both instantaneous solar generation: about 10.5 gigawatts), and instantaneous renewable generation: 73 percent of the state’s total electricity demand came from renewable energy.

With renewables deployment poised for more growth, it’s likely even these new records will be surpassed sometime soon. However, to ensure the state’s investment in clean energy is put to use, and not wasted, California has some work to do.

Despite record generation, wind and solar plants are being intentionally shut down

As demonstrated by the recent generation records, California’s ambitious climate and energy goals are helping add incredible amounts of wind and solar. Fortunately and unfortunately, these renewable resources produce a lot of electricity in the middle of the day and at night, but not in the late afternoon or early evening when most of the population comes home from work. When combined with other factors, this mismatch causes energy system imbalance. To maintain balance, grid managers purposefully, and increasingly, turn off (curtail)renewable energy power plants, even though those plants are otherwise operational.

Curtailing renewable energy wastes the opportunity to utilize the sun and wind energy that is provided by nature at no cost. This approach to managing renewables can make it more expensive for California to meet its clean energy and climate goals. Furthermore, additional investment in renewable energy can be hindered as would-be investors expect lower returns from facilities that may not run at full capacity.

Curtailment is already a significant problem and it is likely to get worse

About 60 percent of the time, curtailment in California is the result of excess generation – where the supply of electricity is more than demand. This typically happens during the middle of the day and at night when there is generally lower energy demand but significant solar and wind, respectively. As the state progresses towards meeting goals of 50 percent renewable energy and higher, and as more rooftop solar is added, excess generation is expected to happen more intensely and more regularly.

About 60 percent of the time, curtailment in California is the result of excess generation.

To put the wasted renewable energy in perspective, conservative estimates show that curtailment of wind and solardoubled from 2015 to 2017 – with enough wasted energy to power about 56,000 California homes for a year. While the state’s extra hydro power exacerbated curtailment in 2017, utility-scale and rooftop solar were the key driver behind the rapid growth of curtailment during this time period.

To further contextualize the curtailment problem, in 2017 renewable curtailment occurred in about 38 percent of hours, with an average of 1.4 percent of the total wind and solar energy online in a given hour being curtailed. In some hours, more than 10 percent was shut-down. When considered through an investor’s point of view, that’s a 1.4 percent reduction on investment return, simply because we don’t have systems in place to put that clean energy to work. And again, this is likely to get worse unless California works proactively now.

Combatting curtailment with a regional energy grid (within a portfolio of solutions)

For California to meet the energy demands of tomorrow with increasing heat waves, a ballooning population, and more devices using electricity, a portfolio of solutions is needed. Solutions that change energy consumption patterns, improve efficiency, store energy, improve forecasting of usage patterns, and allow for more flexible operation of power plants are all necessary. Included in this portfolio are both the expansion and creation of new opportunities through a cost-saving regional electricity grid.

Linking with other regional energy markets could give California an opportunity to export excess clean energy to our neighbors – rather than shutting it off.

Linking with other regional energy markets could give California an opportunity to export excess clean energy to our neighbors – rather than shutting it off. In return, a regionalized grid allows California to import clean energy resources from other states instead of burning fossil fuels like natural gas in the evening and at night.

As an example of the benefits of a regional grid on curtailment, California is already doing some energy trading on a small scale with its Energy Imbalance Market (EIM). Since 2015, the EIM has avoidedabout 587,000 megawatt hours of curtailment and displaced about 250,000 tons of CO2. A regionalized grid, such as that proposed within Assembly Bill AB 813, could supercharge the effort to utilize our renewable resources and help make California’s wasted energy problem a thing of the past. By doing so, regionalization can also substantially reduce procurement costs, and greenhouse gas emissions as well.

With strategies and tools like regionalization, California’s utilities, policymakers, and regulators can and should be acting to create a more flexible electricity system and to reduce the amount of clean resources we curtail. As we move toward a cleaner electricity system, we shouldn’t be letting our resources go to waste.

For more information on the benefits of a regionalized energy grid, read here and here.

CPX Editor’s Note: For more information about the Regionalization of the California grid, please refer to our webinar, “Western Electricity Grid Regionalization – Two Perspectives,” on our CPX Webinars page.

 

A regionalized energy grid creates a home for California’s wasted renewables, by Andy Bilich and Lauren Navarro, The Environmental Defense Fund, July 11, 2018.

San Jose Clean Energy and Fuse announce Fellowship

On May 16, 2017, the San José City Council voted unanimously to establish San José Clean Energy (SJCE), San José’s Community Choice Energy (CCE) Program, to offer individuals and businesses additional renewable-energy options at competitive rates. The program will make San José the largest jurisdiction in California to operate a Community Choice Energy Program, with the goal of meeting the city’s climate-action goals within five-to-ten years. The implementation of San Jose Clean Energy is a tremendous opportunity for San José to offer its community members a choice of energy providers, create new local jobs to foster economic growth, generate revenue for the community, offer myriad renewable energy options resulting in lowered energy rates, and contribute to reducing the risks associated with global climate change.

The launch of San José’s CCE program allows the city to thoughtfully develop clean-energy options that offer positive benefits to every member of the community, including the creation of more than one hundred clean energy jobs. To support this work, SJCE and the City of San José will partner with FUSE Corps to host an executive-level fellow for one year, who will take the lead in developing a roadmap of clean energy customer programs that the SJCE will ultimately fund to benefit the residents of San Jose.

For more information and to apply, click here.

Destiny Rodriguez joins the Center as a community organizer

My name is Destiny Rodriguez, and I am an advocate for a stable climate and clean air, water, and soil – and for the environmental protections that are required to achieve those things. I have been an advocate for these things for as long as I can remember – from organizing recycle days and beautification projects in high school to lobbying for clean air bills for the Central Valley in Washington, D.C.

I was not aware I was an “environmentalist” until my college years. While making a presentation about plastics in the ocean and the mass destruction of aquatic life, my peers informed me that I am a tree hugger and an environmentalist. I took both labels with pride and, in fact, felt compelled to do more for the environment. So I began interning for nonprofits.

I became involved with air quality issues in 2006 while interning with National Parks Conservation Association. I was shocked to find out how poor the Central Valley’s air quality rated with other areas of California, and even more shocked to learn that the local air quality was affecting the Giant Sequoia sapling growth and the Rocky Mountain pika population. There was a direct correlation between the air quality and climate, and degradation of the pika’s ecosystem threatened them. I wanted to understand why and how we could fix this problem, which led me to the realization that problems are caused by local pollution.

In 2008, I graduated from California State University of Fresno with a B.S. in Mass Communications Journalism and Chicano Latin American Studies. I am the first one in my family to achieve a college degree.

In 2009, I started lobbying to legislators with the goal of more stringent air quality regulations for the Central Valley. I did this for several years with many different organizations and advocates. While on a bus to Sacramento with my peers, I quickly understood that advocacy was needed to push policies forward in order to make our leaders act. It was on that bus, where I was then labeled as an advocate; another badge I wear with honor. Later I would come to learn that advocacy on a local level was just as essential as to our state representatives.

While working for Central California Asthma Collaborative, I focused on public health concerns regarding children and the elderly. Asthma attacks can be caused by unhealthy air quality and are directly responsible for the majority of emergency room visits among children in the Central Valley. One in five children within the Valley is afflicted with asthma, having the highest levels of asthma in the state. I worked with school districts and administrative staff to develop health policies to protect students from exposure on extremely hazardous air days, which are very common in the Valley. On these days, simply breathing without any strenuous activity can cause lung tissue to scar. As an environmentalist and an advocate, I was able to successfully engage over 1,300 schools in a four-year period to check air quality and make necessary adjustments prior to sports and outdoor play for students. These schools spanned from Fresno, Tulare, Kings, Kern, Merced, San Joaquin, and Stanislaus counties. It was not an easy task to get schools involved, but having everyone at the table – including county superintendents, school superintendents, district nurses, physical education directors, wellness directors, principals, PTAs, and student groups – made these changes easier to put into action.

Poor air quality is directly responsible for many of the health and environmental problems in the Valley. Humans created these problems and we are responsible for finding solutions to them. My goal is to bring positive change to California and more specifically to my community. I believe that in order for change to occur, we need everyone at the table. I have been actively involved in this effort for over ten years and I’m just getting started.

I am proud to be an environmentalist and an advocate and I look forward to working with the Center to bring all stakeholders to the table to collaborate on solutions that benefit everyone.

As California customer choice expands, are reliability and affordability at risk?

CPX Editor’s Note: The views expressed in this article do not reflect those of the Center for Climate Protection. Please see the Center’s comments in response to the CPUC’s “Green Book” on customer choice. This can be found on the CPX Regulatory Page.

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The customer choice movement is exploding in California.

As many as a dozen groups have begun aggregating residential and commercial-industrial consumers under a law that allows alternative electricity providers to take over utility customers. In addition, retail providers and large commercial buyers are seizing the moment and urging lawmakers to extend the opportunity for the direct purchase of electricity by consumers outside such aggregations.

Between the two, California’s investor-owned utilities (IOUs) could have less than 20% of their retail sales left by the mid-2020s if regulatory challenges and legislative votes go in favor of customer choice. Until those challenges and votes are resolved, energy procurement is nearly at a standstill and questions about enforcement of California energy policy are growing.

Many say this disruption from multiplying power providers in California could put the state’s nation-leading achievements in decarbonization, affordability and reliability at risk.

The disruption and risks from proliferating energy providers were the key focus of a June 22 forum on customer choice with members of the California Public Utilities Commission (CPUC) and the California Energy Commission (CEC) alongside representatives of community choice aggregations (CCAs) and energy service providers (ESPs).

The two big questions on risk

ESPs market power directly to commercial and industrial (C&I) buyers while CCAs are municipally-backed electricity providers authorized by California law to take on utilities’ customers. Along with investor-owned utilities, they are collectively known as load serving entities (LSEs).

To get at the question about impacts on California’s environmental and reliability progress, regulators at the meeting asked two specific questions about the growing disruption’s risks.

The first focused on California’s resource adequacy (RA) needs. It is not clear if the fast-multiplying but disaggregated CCA, ESP, and incumbent utility LSEs can take on the extra burden and cost of underserved regions.

The other question was how to manage customers moving between LSEs in search of the best deal. Until now, IOUs acted as providers of last resort (POLRs). But they are losing revenues to new competitors.

CCAs and ESPs could be serving 85% of California’s electricity customers by the mid-2020s, according to a 2017 CPUC white paper. With 15% of their customer base left, IOUs would not have the financial resources to be POLRs. But the new LSEs’ business models may not suitable to serving needs beyond their own customer bases.

In one panel, CPUC President Michael Picker told Sonoma Clean PowerCCA executive Deb Emerson that the answers of CCAs and ESPs to meet the state’s RA and POLR needs were “whistling past the graveyard.”

She replied that CCAs need more cooperation from the commission.

It is not simply CCAs, Picker responded. The CPUC had eleven requests from all types of LSEs in 2017 to be excused from RA obligations and that seems to put customer needs at serious risk.

The Green Book

The CPUC raised these concerns in a white paper released May 7: “California Customer Choice; An Evaluation of Regulatory Framework Options for an Evolving Electricity Market.” The “fragmented decision-making” of dozens of new power providers responding to rising demand for customer choice could put the state’s standards and electricity customers at risk, it reported.

The CPUC white paper was subtitled the “Green Book” to remind stakeholders of the 1990s “Blue Book,” which mapped out changes in California’s energy sector that led to the state’s 2000-2001 energy crisis. Energy sector turmoil in 2017-2018 could be an “early warning sign” of a new energy crisis, the Green Book said.

One concern highlighted by the Green Book is that poorly coordinated procurement of resources needed to ensure reliability is undermining the RA standard put in place after the energy crisis.

Another is the lack of preparation for customers “stranded without service if their electric provider fails.” During the energy crisis, Pacific Gas and Electric (PG&E) and Southern California Edison (SCE), the state’s two dominant electricity providers, faced financial disaster when customers stranded by an imploding retail market unexpectedly returned.

Advocates for customer choice do not believe their movement represents a threat.

In the California Community Choice Aggregation (CalCCA) filing for the conference, the advocacy organization recommended the CPUC “remove comparisons between the growth of CCAs and the lead-up to California’s 2000 energy crisis.”

The paper conflates “increasing customer choice and over-reliance on short-term energy markets” and blames customer choice, CalCCAcontended. This is “a false comparison” and ignores “safeguards and structural changes” now in place “that reduce the risk of another crisis.” Those protections include distributed generation, CCAs, an RA requirement and improved generation management by utilities.

As stakeholders prepared to debate the cause and extent of energy sector turmoil, a potential new disruption emerged.

 

A new bill, more uncertainty

Among the protections put in place after the energy crisis was a limit on direct access by commercial-industrial customers to 13% of utility load. This cap made those customers good candidates for choice aggregations. But a new bill could allow them to act independently through ESPs, which would dramatically impact the size and leverage of CCAs.

On June 11, Senator Robert Hertzberg introduced Senate Bill 237, which would alter the legislatively-imposed cap on direct access and allow ESPs to serve all C&I customers.

“As more and more entities leave IOU service for CCAs, there is a desire by commercial and industrial customers to also have a more direct role in selecting their electricity mix,” Hertzberg spokesperson Katie Hanzlik emailed Utility Dive.

But the bill ups uncertainty in a power sector thought by some to be on the verge of crisis due to IOU financial instability. PG&E and SCE, already reeling from the loss of customers, now face potentially bankruptcy-inducing liability for 2017 wildfire devastations.

The Hertzberg bill “flips the CCA model on its head” by giving the CCA’s C&I customers a new option, Picker told San Jose Mayor Sam Liccardo, whose city is launching a CCA. “Would you favor giving that same choice to all of your customers?”

The San Jose CCA would like to collaborate with ESPs who are taking CCA customers, so the load loss will not be “a sudden shock,” Liccardo said, echoing IOU reactions to the emergence of CCAs.

The movements and threats of movement of customers between LSEs is causing a “disaggregation of risk management,” Picker said to Liccardo. “What should the structure of the provider of last resort be? And how do we have that conversation with all these different LSEs?”

“I don’t pretend to have the answer,” Liccardo replied.

Provider of Last Resort

Matt Freedman, staff attorney with ratepayer advocacy group The Utility Reform Network, said SB 237 would add to potential instability by increasing the number of customers who might respond to a change in rates by “making new choices.”

SB 237 could cause “a big migration of CCAs’ C&I customers to direct access providers,” he said. In 2001, direct access providers dumped customers to the utilities, which compounded the market failure, he added. “We don’t know that will happen again, but we live in uncertain times.”

Policies that encourage retail electricity customers to move between electricity providers are problematic, according to Ralph Cavanagh, senior attorney and energy program co-director with the Natural Resources Defense Council (NRDC). Cavanagh served as a Green Book advisor and co-keynoted the conference.

The potential heightened turmoil that would be introduced by the Hertzberg bill makes the need to settle the question of the POLR all the more important.

California law does not provide for a POLR, but having one “is in the public interest,” he emailed Utility Dive. The POLR would be “a single decision maker” responsible for resource procurement and portfolio management, “subject to state and/or local regulation.”

Pat Wood III was Cavanagh’s co-keynoter and also a Green Book advisor. The former Chair of both the Federal Energy Regulatory Commission and the Texas Public Utilities Commission is a strong advocate for competition and markets. But he agreed with Cavanagh on the need for a POLR, whether it is an IOU or a CCA.

The IOUs essentially agree with Cavanagh and Wood on the need for a POLR, according to emails from SCE VP for Energy Procurement & Management Colin Cushnie, SDG&E spokesperson Helen Gao, and PG&E spokesperson Ari Vanrenen. Each noted that, as customers migrate to other LSEs, the POLR concept must be rethought.

The CPUC needs to recognize that the POLR responsibility “comes with burdens and risks that need to be compensated,” SDG&E’s Gao said.

“It worries me that CCAs may not be doing the kind of risk management and contingency planning we expect and require.”

Michael Picker

President of the California Public Utilities Commission

“Sufficient financial safeguards and regulatory oversight need to be in place to protect departing, remaining and returning customers from potential market failures, including the potential failure of one or more LSEs,” Cushnie added. State consumer protection laws “may not be sufficient.”

The CPUC must also ensure that the POLR “can be relied on for an extended time,” PG&E spokesperson Ari Vanrenen said.

“Some CCAs are interested in considering a transition to a POLR, but there is no consensus among the CCA community,” CalCCA Executive Director Beth Vaughan emailed Utility Dive.

The idea of CCAs serving as POLRs should be explored, Marin County Supervisor Kathrin Sears, representing the Marin Clean Energy CCA, told the conference. It would eliminate “distortions” about CCA capabilities and “reflect the reality that CCAs are the default providers in our service areas.” IOUs could fill the role in areas without a CCA, she speculated.

When she offered nothing more concrete, President Picker responded to the speculative tone of Sears answer. “It worries me that CCAs may not be doing the kind of risk management and contingency planning we expect and require,” he said.

Marin Clean Energy “does think about risk management and the POLR issue,” Sears said. “But like the CPUC, we are struggling with these complex questions, a lot of factors should be considered, and we want to be part of the conversation.”

RA and a central buyer

A second major risk represented by the choice movement is that disaggreged procurement could leave gaps in supply previously provided through California’s RA provision.

President Picker repeatedly pressed the point that disaggregation of providers could compromise RA. In certain transmission-constrained load pockets, the only viable supply may be natural gas generation from older plants kept in service only by high-priced contracts.

CCAs and other LSEs “are unwilling to meet the costs,” Picker said. He suggested the possibilities of a central buyer for RA, opening RA to competitive bidding, or appointing one of the IOUs to manage RA. “We can’t just not do anything,” he said.

Most conference participants seem to “prefer coordinated RA procurement by utilities and CCAs,” NRDC’s Cavanagh said. The CPUC can allocate costs to make sure no LSE with procurement responsibilities “is ‘leaning on’ the rest of the system.”

Wood’s preference for markets, rooted in the Texas success of retail choice, informed his RA solution. Each LSE can have “an obligation to procure an amount of RA equal to its pro-rata share of the market, and there is a residual market for RA to be offloaded or bought, as customer numbers change.”

Allocating RA between LSEs worked when the IOUs did the bulk of the procurement, SCE’s Cushnie said. “Now, utilities have an uncertain portion of the load and are not in a position to do that.”

During this transition period, RA should be done by a “reliability procurement agent” or “central buyers that can partner with the CPUC and other regulatory agencies,” he said. SDG&E and PG&E took similar positions.

CalCCA’s Vaughan said all LSEs have RA compliance obligations and “CCAs take their obligations seriously.”

The proliferation of LSEs “has shone a light on issues that have existed with the current RA regulatory framework,” Vaughan added. In its pre-conference filing, CalCCA proposed using the ongoing CPUC RA proceeding to consider a multiyear RA requirement, cost recovery, and better identifying where RA is needed.

Better together

Customer choice can work in California, the conference keynoters said at the end of the day. But the risks it could represent must be addressed.

Enabling customer choice is critical, Wood told the conference. That requires “competent oversight.”

Despite his preference for capacity markets, California’s inclination is to have LSEs do RA, he acknowledged. A long-term goal could be market-managed RA with “a lot of oversight.”

“The real issue is better coordinating procurement, finding where resources can be shared and where local diversity works, and seeing each other as partners, not as antagonists.”

Ralph Cavanagh

 Senior attorney and energy program co-director, Natural Resources Defense Council

Centralized authority has potential, “but decarbonization can be done faster and cheaper with decentralized customer decision-making,” he asserted. “Customer choice is happening. California needs to recognize this and work with it in ways that benefit everyone.”

Competitive markets transfer the risk of investment from the backs of captive customers onto the pocketbooks of people who know how to manage that risk, Wood said.

As much as possible, California’s regulators should express the goals of the state’s policies and let the market go to work, he said. “Billions of dollars and gigawatts of clean energy are the reward for getting that right.”

NRDC’s Cavanagh said the 2000-2001 energy crisis left few in California ready to suggest “the genius of the marketplace is enough. But community choice aggregation is not the same thing.”

The new LSEs “decentralize resource procurement,” he said. “But their representatives have acknowledged the need for high standards for decarbonization, affordability, and reliability, and the CPUC and CEC have the tools to ensure they meet those standards.”

One entity procuring for the state under CPUC and CEC oversight might be more efficient, “but we don’t have that, we have many smaller entities getting larger,” Cavanagh said. “The real issue is better coordinating procurement, finding where resources can be shared and where local diversity works, and seeing each other as partners, not as antagonists. We’re better together.”

As California customer choice expands, are reliability and affordability at risk?,  by Herman K. Trabish, Utility Dive, July 9, 2018.

California 100% renewable energy bill heads to Assembly

California just took another step on the road to becoming the second U.S. state to set a mandate that utilities must move towards sourcing 100% of their electricity from renewable energy and other sources that do not emit CO2.

On a 10-5 vote, this morning California time the Assembly Utilities and Energy Committee approved SB100, a bill that will set a 100% by 2045 clean energy policy. The bill now goes to the full Assembly for a vote, and if approved will go to Governor Jerry Brown (D), who is expected to sign it.

SB100 was introduced by former Senate President Pro Tempore Kevin De León (D) in January 2017, and has had a long and arduous path. The bill initially passed the Senate in May 2017, but got stuck in Assembly committees, and it has taken another 10 months to get the bill to where it is today.

Advocates pulled out all the stops to pass the bill through the Utilities and Energy Committee, including delivering 38,000 messages in support of the bill today. SB100 is supported by Vote Solar, Environment California and a number of climate organizations, as well as the American Lung Association.

If passed by the Assembly, California will become the second state to set a 100% mandate, after Hawaii, which also has a timeline of 2045 to reach this target. The next-most ambitious policy is in Vermont, which has set a 75% by 2032 mandate.

However, unlike renewable portfolio standards in Hawaii and Vermont, SB100 is not limited to renewable energy. The bill clearly spells out that utilities must source 100% of their power from renewable energy and “zero-carbon resources”, which could include nuclear power.

However, as the nuclear technologies which are currently commercialized are much more expensive than wind and solar – as well as being unpopular in California – it is unlikely that new nuclear power plants will get built under this policy.

SB100 does increase California’s timeline for implementation, calling for the state’s utilities to procure 60% of their power from renewables by 2030, instead of the current 50%.

 

California 100% renewable energy bill heads to Assembly, by Christian Roselund, PV Magazine, July 3, 2018.

Link California’s clean energy to the rest of the west? Sounds great, but it’s risky

The state of California is considering forming a regional electrical grid to jointly manage power transmission in multiple western states, and the potential benefits are enormous: It would provide a gigantic new market for California utilities to sell the overabundance of solar power they generate during the day, as well as giving them access to an equally generous array of hydroelectric- and wind-generated electricity from other states to power the lights when the sun sets over the Pacific Ocean.

Electricity rates would plunge, supporters say, given that the fuel for clean power is free and infinitely self-renewing. Coal plants and natural gas couldn’t compete over the long run and would shut down because, really, who wants to pay extra for dirty air? And eventually the big western skies would be as clear and carbon-free as they were before the first wagon rattled along the Oregon Trail. Best of all, despite the persistent efforts of the climate change deniers running the federal government, the U.S. would be a leader in reducing greenhouse gas emissions. Take that, Mr. President!

That’s the pretty picture painted by the people (one of whom is Gov. Jerry Brown) pushing the California Legislature to vote this summer to dissolve the California Independent System Operator, the entity that runs the state’s electrical grid, and replace it with a new regional organization that would buy and distribute electricity among any western states and utilities that want to participate.

But like any big payout, it requires taking a gamble. And right now ratepayer advocates, consumer groups, municipal utilities and some environmental groups say the risks are too great. (Other environmental groups are supporting the big grid proposal because of the potential to spur more states to make the transition to renewables.)

The proposal’s biggest risk is that California would have to hand over control of its power grid to an as-yet unknown entity, sacrificing the safeguards put into place two decades ago after another such gamble — on deregulation — triggered an electricity crisis that plunged the power grid into chaos.

Right now, Cal-ISO is a nonprofit public benefit corporation with board members appointed by the governor and confirmed by the state Senate. And in addition to adhering to state open-meeting laws and procedural rules, it must operate in the best interests of Californians — not of, say, Utahns, who have already expressed hostility toward California’s climate change policies and their effects on coal revenues. The bill says that the new board must also follow the state’s rules or else California will take its power grid and go home. That’s easier said than done once the state has already signed over management of its infrastructure to a board answerable not to Californians, but to President Trump’s appointees on the Federal Energy Regulatory Commission.

Proponents are also worried about a not-inconceivable scenario in which California would be forced to subsidize coal-power plants within the regional market to help Trump achieve one of his campaign promises.

The Legislature should not pass this plan, at least not right now and not in its current form. Under the proposal, the Legislature would give its blessing to the development of a governing board to oversee the regional market without knowing its composition or structure. (The bill specifies that there would be a western states committee with three members from each state to provide unspecified “guidance” to the governing board.) Final details would be worked out later and approved by the California Energy Commission. It’s troubling that the measure provides no mechanism for the Legislature to pull out if the plan evolves into something that may not be in the state’s best interests.

There’s no ticking clock here. California isn’t in danger of falling behind in its green power goals. In fact, it is well on track to have half its power come from renewable sources by 2030, as mandated by state law. Nor is there reason to think renewable power won’t catch on if there’s no regional market. Solar- and wind-generated electricity is getting cheaper every year. Someday — possibly very soon — an interconnected multi-state regional electric grid may be the safest and most sensible way to go for the next phase of clean power. But the risks are simply greater than the need at the moment.

CPX Editor’s Note: For more information about the Regionalization of the California grid, please refer to our webinar, “Western Electricity Grid Regionalization – Two Perspectives,” on our CPX Webinars page.

Link California’s clean energy to the rest of the west? Sounds great, but it’s risky, by the Los Angeles Times Editorial Board, Los Angeles Times, July 2, 2018.

Tesla’s next energy storage project in California could be its biggest yet

Tesla has teamed up with The Pacific Gas and Electric Company (PG&E), one of the largest electric energy companies in the United States, to produce a massive battery system with a capacity of upto 1.1 GWh.

Electrek reported that the project proposed to begin in California would have a larger energy capacity than what Tesla has produced in any single project since the company was started in 2015.

PG&E, which services nearly 16 million people in Northern and Central California, submitted four new energy storage projects to the California Public Utilities Commission (CPUC) for approval last week. The battery packs for this project will be provided by Tesla with an output capacity of 182.5 MW of power for 4 hours. This represents 730 MWh of energy capacity or over 3,000 Tesla Powerpack 2s. This capacity can be increased to 6 hours for a total of 1.1 GWh, if PG&E chooses to.

For reference, the US Energy Information administration notes that in 2016 the average annual electricity consumption for a US residential utility customer was 10,766 kilowatthours (kWh). This means that the proposed project has the potential to completely power about 100 households for a complete year.

If approved, the first projects in this team up is expected to go live by the end of 2019, with the other projects scheduled to come online by the end of 2020.

It is interesting to note how Elon Musk seems to keep in line with his goals. He had initially announced in 2015 that ‘Tesla Energy’ could be used in gigawatt-hour scale projects in the future; to see this happen within three years is impressive indeed.

In late 2017, Musk bet the local government in Australia that he would install a giant battery grid to curb blackouts in South Australia within 100 days, and managed to accomplish it ahead of schedule. While Tesla is best known for manufacturing electric cars, from the point of view of Australia to Puerto Rico, the company is redesigning the world’s power grids, and making renewable energy more affordable.

The South Australia project was also a huge commercial success. It was estimated to have saved over $30 million in just a few months. McKinsey and Co. partner, Godart van Gendt, a partner at McKinsey, noted at the Australian Energy Week conference in Melbourne in May, 2018:

“In the first four months of operations of the Hornsdale Power Reserve (the official name of the Tesla big battery, owned and operated by Neoen), the frequency ancillary services prices went down by 90 percent, so that’s 9-0 percent. And the 100MW battery has achieved over 55 percent of the FCAS revenues in South Australia. So it’s 2 percent of the capacity in South Australia achieving 55 percent of the revenues in South Australia.”

Fast Company reported that in just three years, the company has installed enough infrastructure to store a total of a gigawatt-hour of energy, which has been crucial for the efficient use of renewable energy. In doing so, Tesla has been responsible for nearly half of the entire world’s amount of energy storage facilities last year. And the new development, which by itself is capable of providing 1.1 GWh of energy, will double the capacity of energy stored in Tesla facilities in one fell swoop.

The cost of battery storage continues to drop throughout the industry, falling between 2010 and 2016 by by 73 percent, from $1,000 per kilowatt-hour to $273. Bloomberg reported that it could drop to $69.5 per kilowatt-hour by 2025. Hopefully, Tesla’s continued efforts will spur rivals to join in the race and accelerate this even further.

 

Tesla’s next energy storage project in California could be its biggest yet, by Vishwam Sankaran, The Next Web, July 2, 2018.

GRID Alternatives celebrates milestone of serving 10,000 low-income California families with solar

Community and state government leaders gathered today at the home of Rancho Cordova resident Brita West to celebrate an important milestone for nonprofit GRID Alternatives and the state’s clean energy efforts: 10,000 low-income California families served with solar.

GRID Alternatives, a national leader in making clean, affordable solar power and solar jobs accessible to low-income communities and communities of color, got its start in California in 2004 and has helped the state implement several of its groundbreaking low-income solar programs, including the Single-family Affordable Solar Homes program (SASH) and the solar portion of the California Department of Community Services and Development’s Low-Income Weatherization Program. Over 95% of GRID’s California installations have been funded through these programs, with additional support from GRID’s philanthropic and local government partners.

“GRID’s work represents smart energy policy in action,” said Edward Randolph, Energy Division Director at the California Public Utilities Commission, which led the way on SASH. “The CPUC continually seeks ways for California communities to benefit from clean energy technologies and the job opportunities the transition is bringing.”

Taken together, these systems represent 36 MW of clean power sited in and benefiting environmentally and economically disadvantaged communities. Participating households are expected to save $290 million in electricity costs. The projects have also provided solar training and education for 27,000 people.

“California has been a pioneer in making sure that lower-income residents and communities that bear a disproportionate burden of pollution are able to benefit in concrete ways from the state’s clean energy investments,” said Erica Mackie, CEO and co-founder of GRID Alternatives. “We are proud and grateful to have worked alongside partners both in the public and private sector to accomplish this incredible milestone, and look forward to doing even more together.”

GRID’s success in implementing these programs has helped spur additional investments both in California and nationally for low-income solar, including new programs in Washington, D.C., Illinois and Colorado. On June 21, the California Public Utilities Commission approved a 12-year solar rebate program for low-income homeowners living in disadvantaged communities that builds upon the success of the SASH program.

Brita West, who got a new roof on her home through Rebuilding Together and the City of Rancho Cordova in preparation for her installation, is ecstatic about the project.

“Everyone coming together today is a really great thing,” said Ms. West. “I’ll be retiring in three years, and one of my big goals is to reduce my bills. I never really understood solar, but now I do and I know it will be a big help.”

The system will save her around $30 a month on her electricity bills. Job trainees from GRID’s Installation Basics Training program and Northern California Construction Training received hands-on installation training through the project.

 

GRID Alternatives celebrates milestone of serving 10,000 low-income California families with solar, by Kelly Pickerel, Solar Power World, June 29, 2018.