TODAY’S STUDY: LA Can Be 100% New Energy By 2030
Clean Energy for Los Angeles; An analysis of a pathway for 100 percent renewable energy in Los Angeles by 2030
Pat Knight, Ariel Horowitz, Spencer Fields, Nina Peluso, March 7, 2018 (Synapse Energy Economics)
The Los Angeles Department of Water and Power (LADWP) is pushing ahead with ambitious goals to achieve 100 percent renewable energy and is in the process of analyzing a future with that level of renewable growth. This report provides LADWP with a road map for two possible paths to achieve 100 percent renewable energy by 2030, including a path that can save ratepayers money.
LADWP, the largest municipally-run utility in the country, serves nearly 1.5 million residential households and businesses in Los Angeles County. The county houses a quarter of the state’s population and accounts for about one tenth of all of California’s electricity needs.
As the state with the highest amount of renewable generation to-date, California is one of the first states to experience operational issues integrating high levels of variable generation from wind and time-concentrated output from solar facilities. For LADWP, or California for that matter, to become wholly powered by renewables it must require that demand in every hour of the year is met with renewable energy.
In order to understand the impact of a 100 percent renewable policy in LADWP’s service territory, Food & Water Watch retained Synapse Energy Economics (Synapse) to analyze how current electrical trends in LADWP would differ from a future in which all of LADWP’s needs are met through non-emitting renewables. Using the utility-grade EnCompass electricity model, Synapse modeled a business-as-usual “Reference” case and two unique 100 percent renewable LADWP cases (collectively, the Policy cases): one relies heavily upon utility-scale solar (the Utility-Scale case), and the other relies more on distributed solar and storage (the Distributed case). Our analysis and findings follow.
In this analysis of two potential LADWP futures, we find that it is, in fact, possible for LADWP to exclusively use renewable resources to power its system in every hour of the year. What’s more, achieving very high levels of renewable integration in LADWP does not require a substantial departure from the Reference case within the first several years of the study, allowing LADWP a brief, but necessary, window to plan how to best optimize a future 100 percent renewable system.
To meet electricity needs in every hour with 100 percent renewable resources, LADWP must integrate and harness renewable energy more efficiently through additional efficiency, storage, and demand response.
In order to reach 100 percent renewable energy in every hour, LADWP will need to close or divest from all fossil-fueled generators in its current portfolio. This moves beyond ending its commitment to purchase capacity from the Intermountain coal plant and includes retiring all of its locally owned and operated natural gas and landfill gas facilities. However, aside from these changes, both our 100 percent renewable Policy cases have similar levels of overall renewable capacity as the Reference case in 2030. The key difference lies in how the grid is operated—to reach 100 percent renewable generation in every hour of the year, LADWP will need to invest in energy efficiency to reduce overall load, encourage demand response programs to reduce the strain of peak hours on the system, and build storage capacity to store and spread solar generation throughout the day. Importantly, these 100 percent renewable scenarios do not allow for compliance through the purchase of unbundled (or undeliverable) Renewable Energy Credits (RECs). Instead, the scenarios require all renewable generation used to reach the 100 percent target to be either sourced in Los Angeles County or directly deliverable to the LADWP grid. As seen in Figure 1, LADWP will rely upon efficiency, demand response, and stored solar generation to close the gap from retiring fossil resources.
A 100 percent renewable future exceeds the targeted emission reductions of current regulations. California’s existing legislation requires each utility to reach 50 percent renewable generation by 2030, as well as to reduce emissions to 1990 levels by 2020 and to 80 percent below 1990 levels by 2050. 1 Under the Reference case, emissions in LADWP’s service territory are expected to decrease from the 14.4 million metric tons emitted in 2015—or 19 percent below 1990 levels—to just under 2 million metric tons per year in 2030.2 In the Policy cases emissions are eliminated, leading to a fullydecarbonized electric sector by 2030 (see Figure 2).
Achieving 100 percent renewable integration in LADWP does not require a substantial departure from the Reference case within the first several years of the study.
Through 2020, the capacity mix in LADWP in both the Reference case and the Policy cases are nearly identical. The Reference case just has slightly more storage than the Utility Scale case in 2020 and slightly more distributed solar in the Distributed case in 2020. By 2025, the Reference and Policy case trajectories remain similar, but the clean energy transition is thoroughly underway: by 2025, natural gas capacity has decreased by 50 percent, a reduction offset largely by efficiency and geothermal power. By 2030, the overall renewable capacity in the Reference case and Policy cases is relatively similar, with the exception of the retirement of all of LADWP’s natural gas generating capacity in the Utility Scale case. In the Distributed case, all of the gas capacity in the region still retires by 2030 and Los Angeles has over 15 percent more distributed generation capacity than the Reference case in 2030. While both distributed and utility solar are modeled as receiving the same capacity credit for planning purposes, distributed solar operates at a lower capacity factor, meaning more distributed capacity and storage capacity are necessary to truly take advantage of the available solar energy. The fact that the three scenarios are so similar over the first eight years of the study period will allow LADWP time to further study, plan for, and optimize their operations to harness the renewable generation on its grid to the level necessary to meet 100 percent of need with renewables in 2030. Importantly, the large amount of distributed generation added in the Distributed case helps to reduce the need for some of the transmission and distribution system upgrades that would otherwise be required under a 100 percent renewable scenario.
In a 100 percent renewable 2030, hourly generation on the peak summer day will leverage solar and storage.
Any electric sector future that reaches 100 percent renewable generation to meet demand in every hour of the year will necessarily rely upon a mix of storage, renewable curtailment, and new transmission lines. Synapse’s modeled scenario focuses on a mix that is heavy on storage and curtailment, while light on new transmission. As a result, the hourly generation results for a peak day in 2030 in the Policy cases rely upon solar and solar-powered storage to meet demand: in the Utility Scale case, the solar generation is largely utility-scale (see Figure 3), while in the Distributed case, the solar generation is largely distributed (see Figure 4).
A 100 percent renewable LADWP is possible, and it costs nearly the same as the Reference case on a Net Present Value basis.
Not only did we find that it is technically possible to operate LADWP’s system with 100 percent renewable resources in every hour of the year, the net present value of the difference in cost between the Reference case and Distributed case is nearly even (see Figure 5). While none of the scenarios are inexpensive, however, the production cost savings to LADWP throughout the study period mean that the cost of the last push to 100 percent renewables in 2029 and 2030 are mitigated in the Distributed case. Importantly, these cost results present the utility system costs and do not include the consumerside costs of installing rooftop solar.
A 100 percent renewable future may be ambitious but it is achievable. The pages that follow will demonstrate that it is, in fact, possible for LADWP to use exclusively renewable resources to power its system in every hour of the year. Achieving very high levels of renewable integration in LADWP does not require a substantial departure from the Reference case within the first several years of the study, allowing LADWP a brief, but necessary, window to plan how to best optimize a future 100 percent renewable system. To secure this clean energy future, LADWAP will need to strengthen its operation of the system by leveraging storage, demand response, and energy efficiency.
This study illustrates the ability of the grid to provide generation to meet demand assuming a future with high reliance on non-dispatchable generation. It does not address all of the technical operations of the grid under this type of resource mix. While the Policy cases do not require a substantial departure from the renewable capacity builds of the Reference case, they do require a new approach to system planning and operation from LADWP. From a system cost perspective, a 100 percent renewable future for LADWP may be possible at no incremental cost to the Reference case.
We intend for this analysis to support ongoing planning processes and provide a benchmark in comparing potential high renewables futures for Los Angeles. The scenarios discussed in this report are only two of multiple paths LADWP could choose to reach 100 percent renewables.
Within this analysis, for instance, the costs associated with a scenario that leans heavily on utility-scale solar are borne out differently than the costs resulting from distributed solar scenario. With greater levels of utility scale solar, the overall system costs increase, representative of utilities building and integrating new, large scale capacity. On the contrary, higher levels of distributed generation result in lower system costs, as the need for capacity and distribution system upgrades are avoided, but higher costs to individual consumers, representative of the responsibility to procure capacity shifting from the utility to the customer. Neither of the Policy cases incorporates the costs associated with avoiding adverse health impacts and other externalities associated with fossil fuel generation; the Policy cases may in fact be even more economical in comparison to the Reference case than this study shows.
Other potential 100 percent renewable scenarios may lean more heavily on storage resources, allow for compliance through out-of-region purchases of clean generation, or rely upon on nascent technology, such as floating offshore wind turbines. This analysis does not suggest that one possibility is better or more realistic than another; rather, our findings clearly show that a 100 percent renewable future is possible, that it can potentially be achieved at no incremental cost, and that Los Angeles should mobilize now in order to meet its goal…