California will soon decide whether to combine its electric grid management with western states dependent on coal mining and coal-based electricity. This massive change has been proposed in the form of Assembly Bill 813 and before that in Assembly Bill 726. If passed, either of those bills would provide an avenue for coal-fired electricity to gain access to the California market. This would make the transition to renewable energy even harder.
Unifying California’s grid operations with other western states would be a huge risk. Thankfully better options are available.
The Problem
By law, half of California’s electricity is required to come from renewable sources by the year 2030. That is a big win. The vast majority of people want cleaner energy and less pollution. They want fewer toxins floating through the air, stealing the breath from their children. Many also want to make an impact on climate-changing greenhouse gases.
There is a problem though. Shifting to higher levels of pollution-free electricity requires addressing the issue of intermittent energy production. Intermittency is the biggest weakness of solar power and wind power.
Various causes of intermittency:
- Ultra short-term — clouds/wind loss
- Short term — day/night
- Mid-term — weather systems reducing renewable energy production over multi-day periods
- Long-term — seasonal differences in production from winter to summer
The basic concept of intermittency being: the sun is not always shining, and the wind is not always blowing.
The good news is that the problem has many solutions, with more emerging every day. However, various advocates, including large-scale energy developers, industry groups, Governor Brown, and even some environmental groups, have been lobbying for a particularly risky approach for solving the problem of renewable energy intermittency. Their preferred strategy for addressing the problem is the formation of a regional grid operating authority. This operating authority concept is often referred to as regionalization.
Regionalization
California’s electricity grid is a state grid run by the California Independent System Operator (CAISO) – a private corporation regulated by a board which is appointed by the California governor. The system operator runs a wholesale market for electricity, balancing supply and demand around the state. It serves approximately 80 percent of California.
Western regionalization, commonly referred to simply as regionalization, is the concept of dissolving the state operator, CAISO and forming a new expanded grid operator with a larger footprint. The new region, illustrated in the diagram above, would include the majority of an additional 10 western states. Assembly Bill 813 (or AB 726), would put in motion the steps needed to accomplish that end.
If formed, that new entity would run a multi-state wholesale electricity market as a Regional Transmission Operator (RTO). The RTO would be guided by input from each of the 11 states in the west. California would be giving up its ability to choose the grid operator’s governing board and its ability to reliably enforce its renewable portfolio requirements.
CAISO and other advocates for regionalization say that regionalization is the only way to achieve 100 percent renewable energy. Their argument goes like this:
A larger geographic area provides a greater diversity of resources. In the southwest, there are greater solar resources than elsewhere. New Mexico and Wyoming have some of the best wind. Sharing those resources provides a more consistent renewable power output from the system as a whole.
Regionalization advocates say that geographically diverse siting of wind and solar, connected to population centers by large transmission infrastructure, is the only way to achieve a future without fossil fuels. They say that using the other options available will not suffice.
Luckily for California and the rest of the west, today’s problem of intermittency has many solutions. And many of them can be accomplished without additional costs. Several even provide cost savings. States should pursue the best and lowest cost solutions first.
An Embarrassment of Riches
California has a wealth of renewable resources, including some of the best solar in the country.
GTM research noted that, as of 2018, “A residential solar-plus-[battery] system installed today in California can break even within seven years.” Manufacturers provide standard 25-year warranties, meaning that Californians would receive 18 years of free electricity under warranty.
Commercial scale solar is even cheaper than residential solar. Commercial scale solar-plus-battery systems are leading the way to greater local resilience and efficiency while saving businesses money.
The fact that rooftop solar is much cheaper than utility-provided power is appealing, but better yet, the system GTM described includes batteries and thus addresses various intermittency issues.
In addition to local stationary batteries, the following are some other approaches to addressing the intermittency of renewable energy with California-based solutions. These approaches produce savings or incur lower costs than building thousands of miles of new electrical transmission lines – new transmission being a key feature of the RTO based solution.
California based solutions for integrating renewable energy:
- Promote smart electric vehicle charging
- Promote demand response
- Maximize pumped hydro storage
- Enable proper (electric hybrid) ramping of gas plants
- Expand California’s Energy Imbalance Market
Instead of one solution to intermittency, there are many, with options growing every day. Each of these options could be used individually or in combination. They are most powerful when combined and could be integral in solving one piece of the problem – that of renewable energy curtailment.
Renewable Energy Curtailment
Renewable curtailment refers to the actions taken by the grid operator to shut down solar or wind production due to system imbalances. This happens in spite of the fact that California has never achieved 100 percent clean energy production. To date, any time solar has been curtailed in the state, fossil fuel power plants have continued to run. That points to a problem with the overall system within which the grid operator has to work.
Here are a couple of examples of system problems that need to be fixed well before the idea of regionalization enters the conversation:
- Electric Vehicles (EVs): Time-of-Use electricity rates for EVs incentivize EV owners to charge in the middle of the night when the grid is primarily using fossil fuel-based electricity instead of the middle of the day when a much higher percentage of renewable energy is available. The pricing needs to change so that electric vehicle owners are more likely to charge when renewable electricity generation is abundant.
- Transmission charges are added to all electricity. The point where the transmission access charge is assessed should be changed from the distribution/end-user interface to the transmission/distribution interface. If that happened, transmission fees would only be attached to electricity that uses the transmission system, and renewable energy production within the distribution grid would no longer be forced to subsidize distant power plants’ infrastructure. A point worth noting is that most of those distant power plants, receiving transmission subsidies, run on fossil fuels.
Fixing these problems would reduce congestion on the system, especially the transmission system, and allow renewable energy to displace fossil fuels on the grid. They would provide a more balanced and fair market instead of a market tilted in favor of fossil fuels. Both fixes are nearly free to implement. The goal is to never have a renewable energy source sitting unused if fossil fuel plants are running.
The following is a more detailed look at the positive impact electric vehicles can have on the grid.
Rolling Renewables
In January, Governor Jerry Brown issued an executive order directing, “All State entities to put at least 5 million zero-emission vehicles on California roads by 2030.”
Each of those vehicles will use batteries to store electricity.
Since cars are parked 95% of the time, their batteries can frequently be used to balance supply and demand of intermittent renewable electricity. Cars are also fairly evenly spread throughout the grid – providing battery resources where they are needed. Those batteries can combat curtailment of renewable energy production.
Recently the Union of Concerned Scientists (UCS) studied how much supply/demand flexibility California would need in order to eliminate renewable energy curtailment when the state finally achieves 50% renewable energy in the electricity sector (fig. ES-3). The UCS study concluded that 9 gigawatts of battery storage could reduce renewable curtailment to one-tenth-of-one-percent.
The governor’s executive order for five million electric vehicles (also with a 2030 target) can provide 55 gigawatts of electricity draw – six times the amount of instantaneous electricity demand required to eliminate renewable curtailment.
In combination, the UCS research and the governor’s executive order show that California will have all the tools needed to ramp up to 50 percent renewable energy by 2030 without resorting to renewable curtailment.
Those findings allow California a significant amount of time to more carefully evaluate its options. That additional time is absolutely needed because the benefits of regionalization are questionable, and there are plenty of risks.
Risk #1: Coal Re-enters California Energy Markets
Advocates for regionalization promote it as a boon to renewable energy. However, PacifiCorp, a giant western utility which generates 61% of its electricity from coal, has advocated for regionalization from the beginning. It’s hard to understand why a utility that plans to continue operating its coal power plants for decades would favor regionalization if a regional grid actually benefited clean energy.
The proposed legislation does nothing to limit participation in a newly formed Regional Transmission Operator. As proposed, any state or utility would be able to join.
PacifiCorp isn’t the only champion of fossil fuel in the west. Five of the eleven western states sued the EPA over the Clean Power Plan and the eight landlocked western states produce 500 times more electricity from coal than California does.
In a regional grid, coal power has access to the California market to a much greater degree than it does today.
As soon as electricity leaves a power plant and enters the grid, it becomes anonymous. Coal power plants and solar panel arrays create identical electrons. There is no gate or technology which can restrict dirty electrons from being sold to California customers if the entire west falls under the same umbrella. Electricity buyers such as utilities must buy the market energy mix. They cannot limit their market purchases to just clean power.
A regional grid would shackle California to staunchly fossil fuel states. As stakeholders, those fossil fuel advocates would have seats on the board of the Regional Transmission Operator. And any disputes among the board members would be arbitrated by the federal government.
Risk #2: The Federal Government
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A little over a year ago, there were some changes in the White House with wide-ranging consequences in energy markets.
The Federal Energy Regulatory Commission (FERC), with four of its five commissioners appointed by President Trump, oversees wholesale electricity markets. That oversight includes CAISO, California’s grid operator. However, California does have some powers unique to its market.
California won a 2004 court battle against FERC (ISO v. FERC) cementing the state’s right to a governor-appointed board to direct CAISO. Joining a regional grid operator would eliminate that board, and severely impair California’s authority to determine the content of its energy portfolio.
That authority would fall to the RTO entity, representing primarily fossil fuel entrenched states, and FERC’s commissioners. So it is worth looking at the commissioners’ track records.
Kevin McIntyre, FERC’s Chairman, spent the last 30 years defending big energy companies in their dealings with FERC. Commissioner Powelson called New York Gov. Andrew Cuomo a real “Debbie Downer,” for not allowing hydraulic fracturing within New York and compared anti-pipeline activists to jihadists. Commissioner Chatterjee has already proposed subsidizing coal power plants.
The FERC commissioners are not likely to be friends of California’s energy policies.
Risk #3 Economic Damage
Regionalization hurts California’s economy.
Regional grid advocates themselves say that the plan would eliminate 23,000 wind and solar jobs (fig. 5) and that 3,000 miles of new, out-of-state transmission would be needed for importing out-of-state energy (table 2.8).
Replacement costs of transmission lines are approximately one million dollars per mile (p 4). New lines are even more costly. Thus the initial cost for the out-of-state transmission alone would be well over three billion dollars. When adding up the total lifetime costs of those projects, they could be almost triple the initial project costs, similar to the Sunrise Powerlink.
Instead of spending billions on out-of-state transmission lines, those dollars could be directed to incentivizing in-state solar and battery buildout. That would keep the renewable energy jobs in the state. It would also reinforce and strengthen our local economies for decades through energy payments to local companies.
Change Comes Quickly and California Can Afford to Wait
Down the road, it might be possible that regionalization will be required to displace the last five to ten percent of the remaining fossil fuels supplying the grid. However, it is at least a decade too early to even make a guess at the best way to eliminate the final few percentages of fossil fuel on the grid. In 2016 California’s power mix had barely even crested 25% renewable energy.
Solar-plus-storage and electric vehicle-based demand response provide two options for fully integrating renewable energy well into the future. Other options are also preferable to regionalization.
In fact, it is possible that solar panel and battery technologies will allow California and other states to proceed all the way to 100% clean energy without regionalization. Since 2010, battery costs have decreased 80% and solar costs have fallen by 70%. Costs are still falling rapidly. Ten years from now, regionalization-required transmission lines could seem as quaint and outdated as a black and white television.
Instead of investing California’s future renewable energy hopes in the risky and expensive proposition of regionalization, prudence dictates that the state keep its options open and allow renewable energy technology to continue its rapid advancement.
California may never need to join a regional grid. It definitely does not need to join one within the next decade.
National Renewable Energy Laboratory researcher Paul Denholm recently told Vox, “We’re not at 100 percent yet. We’re not even at 80 or 50. Let’s keep going with what we know, continue development of solar and wind and batteries, [and] other no-regrets strategies.”
That seems like good advice.
Call to Action:
California ratepayers should not get stuck with the bill for needless, expensive, out-of-state transmission projects. Make a call to your state legislators to make your voice heard. You can find your legislators here.
Let them know that you Oppose AB 813 and AB 726 (both regionalization bills). Be polite and make sure to note the specific bills. You can reinforce your position with any of the following.
- Do not eliminate 23,000 California based wind and solar jobs.
- Renewable energy is cheaper when it is local.
- Keep coal out of California.
- California dollars to provide California energy should result in California jobs… not out-of-state boondoggles.
- Retain California’s ability to select its own grid operator oversight board.
Want to know more or get involved? Join SanDiego350 at any of its upcoming events!