Renewables Ramp

By Published On: April 22, 2011

By Gregg Fishman I promise to leave writing lyrics to the esteemed Mr. Dylan (see sidebar on page 4), if you promise to consider this question, prompted by the April 12 signing of SBx1 2: How can California’s energy industry reach 33 percent renewable by 2020, maintain reliability and simultaneously implement complex new air and water quality regulations? The intricate rules will close some of the power plants expected to be needed to compensate for the intermittent nature of most renewable resources. Oh, and one more question: How much will all this cost and who picks up the tab? Fostering renewable resources is an important, laudable goal. But, the 33 percent standard, implemented first via executive order but now as state law, reminds me of the old saw that used to be posted in the garage where I had my car repaired. “You can have it done fast, you can have it done right, you can have it done cheap: pick two.” Given the development time frames for electric infrastructure the 2020 deadline counts as “fast.” That leaves doing it right, maintaining reliability and environmental standards, and paying the price, or doing it on the cheap--and suffering the environmental and reliability consequences. To run a reliable grid you must keep the same amount of energy flowing into it as is being used by consumers. Too little energy or too much creates an imbalance that can lead to a black out. The 33 percent standard fundamentally changes the way utilities and grid operators will address that equation. With the intermittent nature of wind and solar both supply and demand fluctuate. California needs power plants that can produce more, or less, power as needed, regardless of the time of day, weather, or hydro conditions to compensate for the intermittency of wind and solar. However, just when the need for those flexible power plants is increasing, fewer of them will be available because of new air and water quality restrictions. The California Air Resources Board is implementing strict air quality standards and the State Water Resources Control Board is implementing regulations to reduce the impact from coastal power plants that use once-through cooling technology. Between the two sets of new regulations, dozens of power plants representing upwards of 20,000 MW of capacity could close permanently--or at least for several months to accommodate retrofit projects to reduce impacts to fish and other aquatic species. These are the very power plants needed to ensure reliability when 33 percent of the state’s energy is coming from power plants that are not controllable. This does not bode well for reliability or cost. The California Independent System Operator constantly maintains about 7 percent ancillary services--reserves that can be quickly called on to balance the grid. But, with a higher ratio of intermittent renewable resources to dispatchable gas-fired power plants, CAISO may well have to carry a higher percentage of those reserves. That alone raises costs--and carrying more reserves consistently may also raise the average price. With regulatory threats to many of the power plants that provide those services, you can bet that prices and costs will rise. Energy storage could be a crucial piece of this puzzle. But, existing storage technology does not yet play a significant role in California. Flywheels, batteries, compressed air and thermal storage are still unproven in “the real world.” Traditional pumped hydro is very expensive and environmentally difficult to develop. Even the Eagle Mountain Project in Southern California, which is furthest along in the process, is not guaranteed to receive the necessary permits and licenses. New legislation requiring more storage may funnel research and development money to storage companies, but it is hard to see how storage can ramp up in time to meet the 2020 goal--without incurring huge costs or unacceptable environmental impacts caused by increased pumped hydro. This is just the tip of the complexity iceberg. Consider the different business models of investor-owned utilities, public utilities, independent generators, and transmission owners. And consider the alphabet soup of governmental and quasi-governmental regulatory organizations (CPUC, CEC, CAISO, FERC, CARB). At night in spring when hydro runoff and wind production are both high and demand is low, it will become common to sell energy at negative prices--we will pay neighboring states to take excess power. Production tax credits that give incentives to renewable resources to produce even when there is no demand can be blamed in part. Closing coastal power plants to comply with once-through cooling regulations and/or so local communities can redevelop beachfront property will make accommodating renewables more difficult. There will be fewer power plants capable of compensating for renewable intermittency. Smaller, older, less efficient gas-fired power plants will be used to make up for renewable intermittency. This can have two main impacts: -The environmental benefits of renewable resources will, to a great degree, be offset by higher emissions from the small, inefficient peaking power plants; and -There will be a great hue and cry about the costs of balancing the grid when those costs are eventually passed on to ratepayers. California could suffer a blackout because of a sudden drop in wind and/or solar production and there will not be enough power plants available that can respond quickly to compensate for the loss if the looming problems remain unaddressed. (This has already happened in Texas and the Midwest.) The promise of the future, however, is the “smart grid.” I mean by that a system of communication and control devices connecting some types of demand, energy storage, electric vehicle charging stations and even home air-conditioning units allowing them to respond on command, consuming more or less energy as dictated by conditions on the grid, like generation currently does. All--or most--things are possible, given enough time and money. But the time element is gone. We need this by 2020. It’s either going to cost a lot of money to meet that goal, or it’s going to be done badly--with the consequences outlined above. “Fast, cheap or right? Pick two.” We’ve already chosen fast. --Gregg Fishman has been an energy industry spokesperson since 1998. This editorial represents his personal opinion not that of his former employer, CAISO.

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