Regional Electricity Markets Needed

The article below appeared on the San Diego Union Tribune's opinion page. Thanks to Gavin Purchas for his contribution.

By Carl Zichella & Gavin Purchas | 6:40 p.m. Oct. 29, 2015, San Diego Union Tribune

Plans to create and expand regional electricity markets in the West -- which would allow more electricity sales across state borders -- have been criticized by some as a threat to California's ability to meet its goals to reduce climate-warming carbon pollution from power generation. Nothing could be further from the truth.

In fact, by giving California a larger outside market for the renewable energy generated in the state, we will avoid having to turn off our solar generation when more is being produced than the state's electricity system can handle, saving money for utility customers because more renewable electricity will be produced and sold. It also will increase reliability of the transmission grid, reduce greenhouse gas emissions and help California achieve Gov. Brown's goal of obtaining half of our electricity from renewable energy sources by 2030.

In fact without regional markets, California's ambitious climate and renewable energy goals may not be achievable.

Our most important goal -- an 80 percent reduction in greenhouse gas (GHG) emissions by 2050 -- requires a transformation in the electricity sector. This is not just California's goal; it is the goal the vast majority of the world's climate scientists tell us must be met globally if we are to head off climate catastrophe. We will need to switch to a power system that is 80 percent free of carbon emissions -- such as solar and wind power -- to meet our targets while also seizing opportunities to cut harmful emissions from transportation and virtually every other sector of our economy.

This metamorphosis must occur quickly, efficiently and affordably. Fortunately, the electricity sector, on which our entire economy depends, can be modernized in a way that preserves its most essential virtue: reliability. A regional market, which streamlines grid operations and favors renewable energy -- which, because the fuel is free costs much less to buy -- over fossil fuel-fired power plants, is a critical tool for making this change happen, reliably, and on time.

Unfortunately, the way we operate today's fragmented transmission grid is an obstacle to renewable energy. In order to understand how much we need a regional market to meet our climate goals, it is important to understand just how crazy things have become. Instead of coordinating grid operations and dispatching power from a central location to our homes and businesses, as is done in other parts of the country, the West is a mishmash of 38 "balancing area authorities," each matching generation and demand in pockets of the grid in often duplicative, wasteful and polluting ways because renewable energy may not be available in every pocket. Imagine a bus with 38 drivers and you begin to get the idea. Unnecessary transmission, unnecessary power plants to provide backup power and flexibility to the system, inefficient system planning and higher costs are just some of the penalties we pay.

A regional market solves many of these problems by better using the existing grid and power plants and sharing reserve resources. It provides all parts of the system access to the lowest-cost renewable power available. According to a just-released study of regional benefits, a market with just one regional partner, PacifiCorp, can result in electricity savings of more than $600 million a year by 2030 for California. This is because we would have access to high quality, low cost renewable power from across most of the West.

When it comes to the climate challenge, California cannot go it alone. We have known this for years, which is why virtually all our climate protection laws were designed to lead the nation and the world. From our first law regulating automobiles' greenhouse gas emissions 13 years ago to our newly adopted emissions targets, we have encouraged others to join the climate fight and exerted our power as the world's eighth-largest economy.

A regional electricity market leverages our climate leadership by providing our neighbors with a way to sell low-cost renewable energy resources at the times each state needs them most. In a regional market, our free-fuel renewable energy out-competes more costly coal or gas power plants elsewhere in the system. In addition, California agencies will continue to enforce strict limits on imports of coal-fired electricity. We save money while reducing pollution.

The alternative to regional markets is an inefficient use of the system, overinvestment in infrastructure, wasteful operational practices and more pollution from dirty power plants. It is time for regional markets in the West.

Zichella is director for Western Transmission at the Natural Resources Defense Council. Purchas leads Environmental Defense Fund's California Clean Energy team.