News Article | May 11, 2017
On August 21, a total solar eclipse will travel across North America -- and put grid operators to the test. The solar industry’s success means that utilities and grid managers across the U.S. will have to plan for a period of time when the sky goes dark and solar generation plummets. This is especially true in California, where solar makes up 10 percent of the electricity mix and accounts for around half the entire nation’s total solar generating capacity. For several hours on August 21, the moon’s shadow will trigger a 6,000-megawatt generation shortfall -- equivalent to the power demand of Los Angeles -- according to the California Independent System Operator (CAISO). That net load effect assumes large-scale solar production will drop by an estimated 4,194 megawatts, distributed solar with drop by a lesser amount and that wind production will remain at a steady clip based on historical performance. While the generation loss is significant, it’s not the only factor CAISO needs to handle. The grid operator also has to manage the ramp rate, which will see the eclipse cause solar generation to drop off at 70 megawatts per minute, then ramp up at 90 megawatts per minute as the shadow passes. CAISO’s typical ramp rate is 29 megawatts per minute. “It will be the first like this, that’s for sure,” said Steven Greenlee, senior public information officer at CAISO. “Grid operators, not only in California, but others across the U.S., are going to have to deal with this. But we’ll probably have to deal with it more because we have nearly 10,000 megawatts of solar resources connected to the grid, of all sizes.” At two recent speaking engagements, California Public Utilities Commission President Michael Picker called on members of the cleantech sector to help California residents use less electricity during the eclipse. “I don’t think it’s a huge issue, but I want people here to help me figure out how to reach customers,” he said at a Los Angeles Business Council event. “We can do our California thing. We can mobilize and respond without powering up our peakers, without dragging baseload power plants out of retirement to supplement the grid. We can ask people not to charge their phones, not to turn on their washing machines. We can ask them not to charge their EVs. There are simple things we can do to power that hour and a half.” Some critics may think the eclipse is when California "falls apart," Picker said. But by showing that the state can handle a grid with high levels of solar penetration during such an event, the state can “send a message to Rick Perry telling him not to worry about California,” said Picker, referring to comments the Energy Secretary made about the need to shore up baseload power resources. Speaking last week at a conference on community choice aggregation -- an emerging trend where local governments take the procurement of electricity generation into their own hands and away from the incumbent utility -- Picker said he wanted community choice leaders to ask their customers not to use electricity during the eclipse hours. He called on local organizers to engage on the issue, as a way to prove the relatively new concept of community choice aggregation can work well with the larger grid system. “Bring me evidence you can help manage this,” Picker said. CAISO is looking at managing the eclipse a bit differently. Greenlee said the grid operator isn’t expecting to ask customers to reduce energy use. Instead, it’s planning on securing generation from other sources, specifically hydropower and natural gas, and using them to manage the ramp. “We’ll be needing to bring on some natural-gas plants to help us with our flexible ramping product to make up for lost solar,” said Greenlee. “So we need to make sure the gas supply is going to be in place and generators have it procured and are ready to generate during that time. Then we also have...plenty of hydro generation this year, so we’re going to be using that as well.” It’s hard to say exactly how much of each resource will be needed to manage that 6,000-megawatt solar shortfall, he added. If it’s not enough, and there is some kind of grid stress, CAISO will issue a flex alert, which is a voluntary call for conservation. Electricity users directly involved in CAISO demand response programs could respond to the alert. Otherwise, investor-owned utilities, which run the bulk of California’s demand response, will trigger their programs. But that would be a last resort, Greenlee said. While hydropower and natural gas will play a key role in supplementing solar power during the August eclipse, it doesn’t mean baseload power is coming back. The eclipse is actually a perfect example of why the state needs flexible resources and not baseload power, said Greenlee. “Because they can ramp up and down quickly, and that’s what we need it to do,” he said. This shift isn’t daunting, because it’s part of a transition that’s been taking place in California for roughly 15 years. “Here at ISO, we have pioneered how to manage the variability of wind and solar resources, and so this is the most that we’re having to manage, but we have a good foundation going into this eclipse,” Greenlee said. “The old grid was based on baseload power, and most of the baseload was close to the urban centers that were using it,” he added. “Now we have resources that are more remote, farther way and more variable. So it’s a new paradigm, and one we think is very exciting. We’re helping to create the grid of the future.”
News Article | May 22, 2017
First Solar has always done things differently compared to the silicon solar industry at large. From wild technical success with its cadmium telluride thin-film platform to actually delivering profits and not following a growth-at-all-costs strategy, First Solar has cut its own path. While solar module companies come and go, ending up insolvent like Germany's SolarWorld or China's Suntech, First Solar is still here and still achieving. The company just logged a strong Q1, ahead of expectations on revenue while modestly raising its guidance for 2017. That's just not that common of an occurrence in the 2017 solar industry. Mark Widmar, First Solar's CEO, spoke to GTM Research head Shayle Kann at last week's Solar Summit and revealed some of his thinking on running a profitable solar business in uncertain times (video archive of the entire event available to GTM Squared members). Here are some of the highlights. During the talk, Widmar shared some insights on First Solar's business strategy, particularly in light of an oversupply of panels in the market. "I'm not in the mode where I'm adding tremendous amounts of capacity that hold me hostage, where I have to find ways to settle through that volume," he said. "What that allows me to do is to be very disciplined [so] we can anticipate and find markets where we can capture the best value." Widmar cited a recent bid in Abu Dhabi as an example where signing a $29 megawatt-hour power-purchase agreement might have closed the deal or set a record, but his firm opted out: "There's not a real big profit pool for anyone to capture there. We made a decision not to participate." "One of the things that we've done since day one is, we've chosen not to leverage up our balance sheet," he added. "We have $2.5 billion in cash right now; we have no corporate-level debt. The only debt we have is project-level debt. I refer to that more as working-capital debt." Widmar said his management team had foreseen oversupply and ASP challenges ahead in 2017. Their response? "Well, let's be capacity-constrained. Let's make that shift now to be capacity-constrained," he said. "I only have 2 gigawatts of production right now. I've got more than enough resiliency to sell through that. I can sell that product without any issues, but now I can be selective." GTM has covered the boom in utility-scale solar and its likely dominance and continued growth in the coming years. Widmar added some color: "In the U.S. in particular, we're seeing more and more movement toward utility-owned generation. The most logical owner of these assets will be utilities, and they would prefer to rate-base these assets and...to have a turnkey solution." What can a utility do that a third party can't? According to Widmar, it's all about the cost of capital. Widmar cited an instance in which First Solar told a utility in the Southeast that the price difference in a rate-based project versus a non-rate-based utility solar project is the difference between a $30 PPA and a $35 PPA. Another strategy First Solar employs is to "see the business and the industry from our customers' eyes," Widmar said. "One of the things that you'll hear a lot is [that] PV results in reliability and stability issues around the grid. There is an unmet need to ensure that we can actually have very high solar penetration and that it doesn't adversely impact the reliability and stability of the grid." To address that, the company enhanced its power plant controls and software optimization. First Solar also worked with the California Independent System Operator and the National Renewable Energy Laboratory. "We took one of our large 300-megawatt power plants in the desert, integrated the controls into that power plant, and we basically demonstrated that that power plant can be managed as any other thermal asset can," said Widmar. "The response rate's even better" compared to a natural-gas generator, he added. The signals come every 4 seconds, and the "response rate to those signals were 20 to 30 basis points higher than thermal assets and 20 to 30 basis points higher than hydro assets." "You can actually improve reliability and stability of the grid through the proper power plant controls," said Widmar. "That's an example of where a utility sees that, understands that, and they're willing to make sure that that's spec'd into the design of a power plant." GTM's Jeff St. John recently took a careful look at this first-ever grid-responsive solar farm, and how it could help meet federal calls for grid stability. When it comes to First Solar's product roadmap, the company's Series 6 solar modules hold the promise of lower module costs and lower balance-of-system costs in trackers and cabling -- but first the company has to seamlessly ramp down its existing production and ramp up the new 400-watt-plus form factor. It's this new product that will keep First Solar relevant in the face of continued cost reductions from China Inc.'s solar modules. "We've always had the most efficient manufacturing process from a capex and environmental perspective -- but we've been hampered by the small physical size of our product, which is itself a limitation of our legacy manufacturing platform," Raffi Garabedian, First Solar's CTO, told GTM. "The 600 millimeter by 1200 millimeter form factor has inhibited our efforts to reduce balance-of-systems costs and has been a limiter in our ability to achieve the full manufacturing cost entitlement of the technology." "This is all changing with our Series 6 manufacturing platform," he said. "Each [Model 6] factory will be about 1 gigawatt in scale (with the exception of our 500-megawatt Ohio plant) and will deliver 2.4-square-meter framed modules from a highly automated inline production process. The resulting S6 module will eliminate (and in some cases even reverse) balance-of-system penalties associated with our smaller unframed S4 module, while simultaneously delivering improved efficiency." Garabedian added: "Most importantly, from a corporate sustainability perspective, we expect that the [Model 6] manufacturing platform will allow us to compete profitably in the otherwise unsustainable pricing environment we're experiencing as a result of rampant oversupply from Asia. Thin-film technology is unique in the PV world in that costs scale favorably with processed glass size. This is the closest thing we have in PV to Moore's law."
News Article | May 24, 2017
So far in 2017, increased hydroelectric generation and solar power generation in California have contributed to lower natural gas-fired power generation in the California Independent System Operator (CAISO) region, the electric system operator for much of the state. In a late April update to several state agencies responsible for planning and managing California’s energy reliability, Southern California Gas Company (SoCalGas) outlined its views regarding several assumptions and challenges for safely and reliably serving its customers in Southern California over the coming summer and winter. SoCalGas cited expectations of warmer-than-normal summer temperatures driving increased electricity demand as one of the factors raising potential energy reliability concerns. The ability to draw natural gas from storage fields in the SoCalGas system continues to be affected by operating restrictions on SoCalGas’s Aliso Canyon field, an underground natural gas storage facility with a capacity of 86 billion cubic feet (Bcf), or 64% of SoCalGas’s total storage capacity. This facility is still recovering from the leak that was initially detected in late October 2015 and plugged in February 2016. Following the leak, Aliso Canyon natural gas storage levels were reduced to about 15 Bcf, and total combined inventories at all of SoCalGas’s storage facilities remained about 60 Bcf throughout most of 2016. In June 2016, the California Public Utility Commission (CPUC) conditionally authorized SoCalGas to withdraw the remaining 15 Bcf at Aliso Canyon. Storage injections into that field would require additional regulatory approval. A total of 19 Bcf was withdrawn from the SoCalGas system from November 2016 through the end of March 2017, including withdrawals from Aliso Canyon during a two-day cold snap in late January. Over the five prior November-through-March periods, withdrawals averaged nearly 60 Bcf, ranging from 31 Bcf to 103 Bcf. As of May 16, SoCalGas’s inventory stands at 43 Bcf. The availability of natural gas in Southern California has implications for regional power generation. For most days so far in 2017, the share of CAISO’s electric power generated from natural gas has been near or below previous five-year (2012–16) minimums. The share of electricity generated from natural gas in CAISO typically reaches a low point in the spring, when temperatures are relatively mild, hydroelectric output is high, and electricity demand is relatively low. However, unseasonably warm weather in early May contributed to an 80% increase in natural gas use for power generation compared with daily averages in April. Warmer weather this summer will likely result in increased use of natural gas. The National Oceanic and Atmospheric Agency’s (NOAA) forecast issued at the end of April expects a warmer-than-normal summer for California. During summer months, demand for electricity—driven by air-conditioning use—is typically at its highest. Increased hydroelectric output in the CAISO electricity market, along with continued increases from grid-connected solar power generators, has offset lower natural gas generation so far in 2017. Through May 8, California has averaged 38 inches of snow-water equivalent since the first of the year, about double the precipitation through that point in 2016. In the first four months of 2017, average daily solar output has increased by 27% over the same time period for 2016, according to EnergyGPS data. California energy market stakeholders—including the CAISO, the CEC, the Los Angeles Department of Water and Power, and the CPUC—will hold a Joint Agency Workshop on Energy Reliability in Southern California on May 22 to discuss summer energy reliability in Southern California. EIA publishes the Southern California Daily Energy Report to provide daily statistics on regional temperatures, electric power loads, natural gas flows, SoCalGas send-out, changes in SoCalGas inventories, and spot natural gas and electric power prices.
News Article | April 10, 2017
On March 11, utility-scale solar generation in the territory of the California Independent System Operator (CAISO) accounted for almost 40% of net grid power produced during the hours of 11:00 a.m. to 2:00 p.m. This is the first time CAISO has achieved these levels, reflecting an almost 50% growth in utility-scale solar photovoltaic installed capacity in 2016.01 The large and growing amount of solar generation has occasionally driven power prices on the CAISO power exchange during late winter and early spring daylight hours to very low, and sometimes negative, prices. However, consumers in California continue to pay average retail electricity prices that are among the highest in the nation. Utility-scale solar generation includes solar photovoltaic (PV) systems as well as a few solar thermal plants. Additional generation from customer-sited solar generators installed in California (such as those on residential and commercial rooftops) further adds to the total solar share of mid-day electricity generation, while displacing demand for power from the grid. As of December 2016, utilities in CAISO reported 5.4 gigawatts (GW) of net-metered distributed solar capacity. (EIA reports installed electric capacity data in alternating current terms, which are typically 10% to 30% lower than the direct current capacities sometimes reported for PV systems.) EIA estimates that this capacity would have generated approximately 4 million kilowatthours (kWh) during the peak solar hours on March 11. This level of electricity reduced the metered demand on the grid by about the same amount, suggesting that the total solar share of gross demand probably exceeded 50% during the mid-day hours. Total solar capacity in California (including both distributed and utility-scale systems) has grown from less than 1 GW in 2007 to nearly 14 GW by the end of 2016. Solar generation follows daily and seasonal sunlight patterns, peaking during the long summer days and reaching its annual minimum during the winter. Electricity demand in California also tends to peak during the summer months. However, in late winter and early spring, demand is at its annual minimum, but solar output, while not at its highest, is increasing as the days grow longer and the sun gets higher in the sky. Although the sun is at a similar angle in September and October, electricity demand is still relatively high, leading to lower solar generation shares than seen in March. Consequently, power prices on both the day-ahead and real-time CAISO markets were substantially lower in March compared with other times of the year or even March of last year. In March, during the hours of 8:00 a.m. to 2:00 p.m., system average hourly prices were frequently at or below $0 per megawatthour (MWh). In contrast, average hourly prices in March 2013–15 during this time of day ranged from $14/MWh to $45/MWh. Negative prices usually result when generators with high shut-down or restart costs must compete with other generators to avoid operating below equipment minimum ratings or shutting down completely. Large price spikes immediately before and after mid-day periods when both utility-scale and distributed solar generation reaches its peak level suggest a need for dispatchable generation sources to help cover ramping periods, when the need for power from the grid to meet load is rapidly changing. Beyond solar output, the mix of generation on the system also affects prices. Notably, above-average rain and snowfall this winter in California has supported high levels of hydropower generation that may also be contributing to recent pricing patterns. California grid operators have been concerned over the effects of the increase in solar generation on system operations for several years. The generation and pricing patterns that occurred in March and that may continue through the spring highlight some of the issues California grid operators will face in integrating large amounts of solar into their power markets.
News Article | April 17, 2017
FOLSOM, Calif. & EL CENTRO, Calif.--(BUSINESS WIRE)--As of April 3, 2017, ZGlobal Inc. Power Engineering and Energy Solutions (“ZGlobal”) has begun providing Silicon Valley Clean Energy (“SVCE”) with alternative energy services, resulting in the successful launch of SVCE’s Community Choice Aggregation (“CCA”) operations. ZGlobal provides SVCE 24/7 operation services enabling 100% Carbon Free Electricity. “We are very pleased to leverage our decades of experience to provide SVCE with value-added services at competitive prices,” stated Kevin Coffee, Vice President of Electric Operations at ZGlobal, and a veteran of Electric Operations at Pacific Gas and Electric (“PG&E”). SVCE is a Community Choice Energy (CCE) provider, whose purpose is to pool the electricity demand of its residents and businesses and buy carbon free power on their behalf outside of their local utility. SVCE is encouraging a type of competition that could result in additional utilization of renewable and carbon free energy sources at more competitive rates. “With partners such as ZGlobal, Silicon Valley Clean Energy customers will get the same reliable service they are used to, and 100% carbon-free electricity at competitive prices,” said Tom Habashi, CEO, SVCE. Silicon Valley Clean Energy is a community-owned agency servicing the majority of Santa Clara County communities by acquiring clean, 100% carbon-free electricity on behalf of residents and businesses. As a public agency, net revenues are returned to the community to keep rates low and promote clean energy programs. Member jurisdictions include Campbell, Cupertino, Gilroy, Los Altos, Los Altos Hills, Los Gatos, Monte Sereno, Morgan Hill, Mountain View, Saratoga, Sunnyvale and the unincorporated areas of Santa Clara County. SVCE is guided by a Board of Directors, which is comprised of a representative from the governing body of each member community. With Silicon Valley Clean Energy, residents and businesses in our communities will join thousands of Californians in choosing clean power at competitive rates. For more information please visit SVCleanEnergy.org. ZGlobal offers a wide range of services in the energy sector, including round-the-clock scheduling and operation services, in addition to reliability/compliance services for green energy such as solar, wind, energy storage, geothermal, and biomass facilities, CCAs and utilities throughout the western United States. ZGlobal manages over 12,600 GWh of energy annually and over 3,000 MW peak from California, Arizona, Nevada, and Utah with a transaction value exceeding $320 million. ZGlobal was formed in 2005 and is staffed by veterans from the California Independent System Operator (CAISO) as well as various western utilities. The group is led by Ziad Alaywan P.E., who served as the Manager of PG&E real time operations. As one of the first employees that led the rapid implementation and operation of the CAISO in 1998, Mr. Alaywan later became CAISO’s Managing Director of Grid and Market Operations. More information is available at www.zglobal.biz.
News Article | April 19, 2017
When it comes to solar electric power, California has a good thing going – perhaps too good. Too much clean, affordable, abundant energy? It’s true because high levels of solar production from utility-scale facilities and widely distributed rooftop installations occur during daytime hours when demand may not be at its peak and grid-supplied electricity is plentiful. Seasonally, and under certain conditions, this leads to an oversupply of energy on the grid and requires curtailment of generation resources, including wind and solar. We should see this as an opportunity to further reduce fossil fuel generation and to build a more robust, resilient and efficient grid. The challenge is to match our daytime supply of clean renewable power with the actual demand for electricity, which now peaks in the evening. Fortunately, California is poised to turn this challenge into opportunity by putting power into battery storage for use when it’s needed. Oversupply can occur on a sunny day when solar production pushes demand for traditional baseload generation below forecasts during the day. This net load, or the difference between forecasted load and expected generation from known solar resources, is illustrated by what the California Independent System Operator (CAISO) has termed the “Duck Curve.” The “belly” of the duck shows the expected impact of solar generation during peak production hours. With increasing solar deployment, the duck’s belly may continue to expand, requiring costly curtailment of either the solar or the baseload resources. What’s more, peak demand increasingly occurs during the early evening hours after the sun has set. This requires CAISO to steeply ramp up generation, the “neck” of the duck, using fossil fuel-fired peaker plants until baseload resources can handle the load. This balancing of energy supply and demand must be continuous to mitigate the risk of both over- and undersupply, and the effect of solar as illustrated by the Duck Curve is a particularly costly and impactful scenario. What’s being done now? In response to the Duck Curve, utilities and the California Public Utilities Commission have started to design rates and tariffs to better reflect time-varying pricing, moving away from historic volumetric tier pricing to dynamic, time-of-use (TOU) rates. This means homeowners will pay significantly more for turning on their lights, running their dishwashers and doing laundry when they return home from work in the evenings. To take control of their utility bills, consumers can become more energy efficient and conserve, but they also can invest in self-generation to offset demand for grid power. Solar plus energy storage offers a solid solution to this dilemma. By storing solar energy produced during midday in batteries in their homes and using it later in the day, Californians can reduce dependence on grid-generated power during hours of peak usage and higher rates. When pairing solar with battery storage systems on a wide scale, Californians can not only save money, but also reduce strain on the grid and mitigate the Duck Curve. With nearly instantaneous response time, battery storage can smoothly ramp up and regulate supply, displacing peaker plants while simultaneously decreasing intermittency (power that is not continuously available). Energy storage also enhances resiliency, and defers utility transmission and distribution upgrades — all of which will save ratepayers in the long run. The potential social benefits are substantial, including cost savings, expanded consumer choice, a cleaner environment and robust clean-tech market and job growth. How policy can help California policy has long promoted solar energy, recognizing the threat of climate change and continued greenhouse gas emissions from fossil fuel combustion. Currently, attention is focused on energy storage with Senate Bill 700 (Wiener) working its way through the legislature to create a market transformation program aimed at fostering growth of solar plus energy storage. To maximize the benefits of combined solar plus storage and reduce greenhouse gas emissions, policymakers must continue the path of establishing appropriate price signals grounded in good utility rates and tariffs along with clear and transparent interconnection rules. But they also must deploy properly designed market transformation programs that effectively reach all businesses and residents, particularly low-income customers who pay a higher percentage of their total income toward their energy bills than other population segments. In this time of changing rates and higher utility bills, combining solar and energy storage improves stability for the power grid and will ultimately help Californians take more control of their energy usage and contribute equitably to the state’s clean energy future. An investment in incentivizing energy storage technology, just like California did for solar, will be well worth the effort. By Ben Airth, Senior Specialist, Distributed Energy Resources Co-author: Sachu Constantine, Director of Policy Center for Sustainable Energy About the Center for Sustainable Energy® Accelerating the transition to a sustainable world powered by clean energy. Founded in 1996, the Center for Sustainable Energy (CSE) is a mission-driven nonprofit dedicated to developing a clean energy future that addresses climate change, increases energy independence and generates lasting economic and environmental benefits. CSE empowers such innovation by leveraging its expertise in clean transportation, distributed energy resources, energy efficiency, energy engineering and regulatory and policy support. As a trusted advisor, CSE partners with clients of all sizes to achieve their sustainability objectives through a suite of energy services that include comprehensive program design and management, research and analysis, technical advising, incentive and rebate management, and education and outreach. CSE is headquartered in San Diego with offices in Boston, Los Angeles and Oakland, Calif. Learn more at EnergyCenter.org -Facebook - Twitter - LinkedIn.
News Article | April 20, 2017
"These projects will add more flexibility to the system and help us to ensure reliability while providing greater levels of clean energy to all of our local communities," said Emily Shults, SDG&E's vice president of energy procurement. "By building these projects, SDG&E will remain at the forefront of helping the state achieve its bold clean-energy and carbon-emission targets." All five of the battery projects can store supplies of solar, wind and other traditional sources and release it when energy is in high demand. The California Public Utilities Commission (CPUC) has set targets for investor-owned utilities to procure large amounts of energy storage by 2020, including 165 MW by SDG&E. With these five new projects, SDG&E is on track to meet this goal. The new facilities are expected to come on line between December 2019 and late 2021. The demand response program run by OhmConnect will also add flexibility to the system. Beginning in early 2018, OhmConnect will request industrial and commercial customers who have enrolled in the demand-response program to reduce energy usage within 20 minutes of being called during certain days and hours. This process will be conducted by the California Independent System Operator and/or SDG&E as needed. SDG&E is an innovative San Diego-based energy company that provides safe, reliable, clean energy to better the lives of the people it serves in San Diego and southern Orange counties. More than 4,100 employees work to provide the cleanest and most reliable energy in the West. The company has been recognized by the U.S. Environmental Protection Agency for leadership in addressing climate change, was the first to meet California's goal of delivering 33 percent of energy from renewable sources, has fueled the adoption of electric vehicles and energy efficiency through unique customer programs, and supports a number of non-profit partners. SDG&E is a subsidiary of Sempra Energy (NYSE: SRE), a Fortune 500 energy services holding company based in San Diego. For more information, visit SDGEnews.com or connect with SDG&E on Twitter (@SDGE), Instagram (@SDGE) and Facebook. To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/sdge-seeks-more-storage-to-harness-clean-energy-and-enhance-reliability-300442398.html
News Article | February 23, 2017
A new study, jointly conducted by the California Independent System Operator (CAISO) – the entity responsible for overseeing much of California’s electric grid – First Solar, and the National Renewable Energy Laboratory (NREL), demonstrates the untapped potential of utility-scale solar. The study shows that utility-scale solar can provide key services needed to ensure electric grid stability and reliability – better known as ancillary services – at levels comparable to conventional, fossil fuel driven resources. California needs to reduce reliance on natural gas for ancillary services In CAISO’s market, ancillary services are overwhelmingly provided by natural gas-fired resources, and their share of the pie has been increasing in recent years. This growing reliance on natural gas for ancillary services merits attention for many reasons. As renewables penetration increases, so will the need for ancillary services The findings of the new CAISO- First Solar-NREL study have significant implications for the integration of all renewables (not just solar) on California’s grid. California’s renewable portfolio standard mandates that at least 50% of electric generation be driven by renewables by 2030. Given their inherent variability, as more renewables come online, grid operators will need additional ancillary services to ensure grid stability. In particular, we are likely to see steep increases in ramping needs in the afternoon and evening hours, driven by mid-day solar generation. Solar generation in the middle of the day leads to a drop in net electricity demand, followed by a sharp increase in the afternoon/evening, as people come home from work and school, switch on their lights and appliances, and solar generation falls with the setting sun. This is reflected in the “duck curve” (see figure below) which underscores the need for flexible resources, that are capable of quickly responding to sudden fluctuations in renewable output. CAISO has an ancillary services scarcity pricing mechanism that is triggered when it is unable to procure the targeted quantity of one or more ancillary services. In 2015, CAISO experienced its first ancillary service scarcity event, signaling a mismatch between the demand and supply of ancillary services. To follow up on the study, CAISO plans to identify barriers to the provision of grid services by renewables and explore incentives to harness this potential. This is a welcome next step. Because of the unique characteristics of clean energy resources, there are challenges to their participation in ancillary services markets. What’s more, these markets were not designed keeping renewable resources in mind. Studies such as the CAISO-NREL-First Solar joint study demonstrate that renewables can provide essential grid reliability services needed to support the transition to a cleaner grid. Now, the challenge is to develop the market design features that will allow California to harness these capabilities.
News Article | September 7, 2016
The mix of energy sources used for power generation in California this summer changed from last summer, as renewables and imported electricity offset lower natural gas use. During summer 2016 (June, July, and August), thermal generation (almost all from natural gas) in the area serviced by the California Independent System Operator (CAISO) was down 20% from the previous summer, while generation from hydroelectricity, other renewables, and electricity imports was higher than the same period last year. The overall level of electricity consumption was 2% higher this summer as temperatures were slightly warmer than the previous summer. Hydroelectric generation in CAISO increased from last summer because the West Coast drought situation has improved. According to the U.S. Drought Monitor, 59% of California experienced a severe, extreme, or exceptional drought during July 2016. In contrast, 95% of the state experienced similar conditions last July. These improved water conditions have also helped increase hydroelectric generation in the Pacific Northwest, some of which is imported into CAISO. The addition of new generating capacity has also contributed to the change in generation mix. Data from CAISO indicate that nonhydro renewables, mainly solar and wind, represented 26% of capacity in June 2016. Utility-scale solar photovoltaic (PV) capacity has shown the most growth in CAISO recently, increasing by 1.4 gigawatts (27%) between June 2015 and June 2016. This increase in utility-scale solar capacity has reduced the need for summer thermal generation in CAISO, especially during the daylight hours. California also has added a significant amount of distributed solar PV capacity. EIA’s latest data show that distributed solar PV increased from 2.8 gigawatts in June 2015 to 3.8 gigawatts in June 2016. Distributed generation reduces the amount of electricity that utility-scale power plants need to supply.
News Article | February 6, 2016
California lawmakers expressed concerns in a letter Thursday that allowing a utility of Warren Buffett's Berkshire Hathaway Inc. to join the state's power grid may undermine the state's clean energy goals by connecting it to coal plants. Adding Berkshire Hathaway Energy's PacifiCorp utility to the grid run by California Independent System Operator Corp. would bring with it states "heavily invested in coal and other high greenhouse gas emitting resources," according to the letter to California Governor Jerry Brown.