TODAY’S STUDY: CAN CALIFORNIA REALLY GET TO 50% RENEWABLES IN 15 YEARS?

Can California really get to 50% renewables in 15 years?; “We are ready, but we have to get our boots on and navigate some tough territory.”

Herman K. Trabish, January 9, 2015 (Utility Dive)

California Gov. Jerry Brown (D) got 2015 off to a rousing start with his call to raise renewables to 50% of his state’s electricity generation by 2030.

Can his state's utilities make it happen?

“The governor has presented a policy for California to be a leader in carbon reduction and this is the focus of his broad plan,” a Southern California Edison (SCE) spokesperson wrote to Utility Dive.

In addition to raising the renewables mandate, Brown’s inaugural address proposal included increasing building energy efficiency by 50% and halving the state’s use of petroleum.

“We look forward to working with the administration to develop and implement this group of measures,” the SCE statement said. “Combinations of increased renewable energy resources, energy efficiency, expansion of the use of electric vehicles, energy storage and other technologies and strategies will be needed to make the desired level of carbon reductions.”

Hawaii’s regulators are working with the HECO utilities on a 67% renewables by 2030 mandate. But Hawaii’s smaller size, population and its geographic isolation make meeting the goal significantly easier than in California. No other state’s mandate is higher than 30%.

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No technical barriers

There are no technical barriers to using 50% renewables on California’s grid, according to Laura Wisland’s reading of 'Investigating a Higher Renewables Portfolio Standard [RPS] in California,' a study by Energy plus Environmental Economics (E3). Wisland is an Energy Analyst at the Union of Concerned Scientists.

Cost barriers caused by over-generation of solar could, however, become an issue, the E3 research found. The key to cost is in the resource mix and that will be decided by state energy agency decision makers.

“We have known for some time that the 33% RPS was only a floor and not a ceiling and we have been thinking about 40% and 50% penetration rates,”California Independent System Operator (ISO) Senior Public Information Officer Steven Greenlee. It will take increased collaboration and coordination with the state’s energy agencies, he added, “but we are prepared to move forward and make this a reality.”

Resource mix specifics will be up to the California Energy Commission (CEC)and the people involved in the California Public Utilities Commission (CPUC) long term procurement plan process, Greenlee explained. The ISO then determines what infrastructure is needed to support the new resources.

A source close to the CEC said it is studying the Governor’s proposal and will collaborate with stakeholders to find the best ways to achieve the Governor’s “ambitious” reductions. The CPUC could not be reached.

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The fuel mix: Balance matters

“The most important part of Governor Brown’s proposal is that renewables increasingly will be seen as a means and low carbon electricity will be the end, rather than renewables being seen as an end,” explained Center for Energy Efficiency and Renewable Technologies (CEERT) Executive Director V. John White.

CEERT has studied California energy policy for over two decades and worked on the existing renewables mandate’s implementation. Most recently, the think tank has influenced Sacramento thinking through the California 2030 Low Carbon Grid Study, an independent analysis with input from NREL and others that CEERT has helped organize, staff, and fund.

”Until now, we have been buying renewables to comply with the RPS,” White said. “We didn’t think about the fit but almost exclusively about the cost. But there could be 50% renewables with no significant reductions in greenhouse gas emissions [GHGs] if we have to build a bunch of gas plants to balance the load.”

Because Brown’s plan is part of a strategy to meet 2030 and 2050 GHG reduction goals, it is likely to be implemented in a more integrated way, White explained. “From economic analyses of deep penetrations of renewables, we see the balance of the portfolio matters, both technologically and geographically.”

In addition to continued growth in utility scale and distributed photovoltaic solar with battery storage, White foresees a continued wide mix of new renewables capacity. It will include wind, biomass, concentrating solar power projects with storage and grid-scale pumped hydro storage.

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Central solar versus distributed solar

The mix of distributed solar and central solar in 2030’s 50% mix depends on how bold the decision makers at the CPUC and CEC choose to be, said Clean Power Finance Government Affairs VP James Tong.

“If they want the easy way out, they will use 20th century techniques and pick more centralized generation," he told Utility Dive. "If they want to be bolder, distributed energy resources (DERs), including distributed solar, will have a stronger place in the mix.”

Making that choice will be harder because “the evaluation criteria of the 20th century grid are outdated and understate both the value of DERs and the cost of centralized renewables,” Tong said. “DER technology is ready to take on the work of a 21st century grid but we haven’t created the regulatory construct.”

An example is the lack of time of use (TOU) pricing, Tong explained. “Without TOU pricing, the value of smart devices is diminished so they are underutilized and everything about the distributed system is overpriced and that causes decision makers to think they need more 20th century centralized infrastructure.”

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Challenges

Implementing this policy will take time and require innovation, institutional changes, market design changes, rate design changes, and procurement changes, White concurred, but there are no economic or technical barriers to achieving 50% renewables.

“There will be healthy competition between the renewables and that is good for a state as big as California that is blessed with so many renewable resources,” said California Solar Energy Industries Association Executive Director Bernadette Del Chiaro. “But 50% is a big number and allows room for everybody.”

Rooftop solar now stands shoulder to shoulder with large scale renewables and will play an ever bigger role in getting to 50%, Del Chiaro said. “There are 15 years to get in place the policies and the investments needed to bring technologies like storage and smart inverters to scale. We have to start today and that is happening. There are proceedings open at the CPUC on how to do these things.”

“We are thrilled for two reasons,” said California Wind Energy Association (CalWEA) President Nancy Rader of the Brown proposal. “One is because we have a number and a date and that makes it easier for people who make investment decisions.

The other is because administration officials have said we should be more focused on emissions than on renewables but the Governor put out a very specific renewables target.”

Based on CEERT’s study and CalWEA’s deconstruction of the E3 study, Rader believes the 50% goal is achievable and that California will require 10 gigawatts of new wind to meet the policy. “The utilities imposed the assumption on E3 that they would procure mostly solar,” Rader explained. “But it is clear we need large quantities of wind to balance solar’s narrow midday output and, especially with storage, higher cost.”

Rader’s biggest concern is that a draft Desert Renewable Energy Conservation Plan (DRECP) study too severely limits the areas where that much wind can be developed.

The DRECP does provide for adequate renewables development, Wisland recently wrote.

If there are shortfalls in California wind development, White said, wind can be imported cost-effectively from Wyoming and New Mexico. Rader argues that would transfer part of the economic benefit of the new renewables mandate out of California.

“We are at the base camp for the next climb up the mountain and Governor Brown has lifted our eyes to the higher horizon and said, ‘We can go there. Let’s go,’” White said. “We are ready but we have to get our boots on and navigate some tough territory.”

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