Coordination is California's Least Cost Path to a Clean Energy Future

A new study for California’s largest investor-owned and public utilities is the latest in a series of influential reports identifying the range of measures needed to add large amounts of renewable power to the grid quickly. The analysis, Investigating a Higher Renewables Portfolio Standard in California, conducted by the consulting firm Energy and Environmental Economics, Inc. (E3), focuses on the challenges to a single state, California, and affirms what many have been saying for a long time: cost-effective renewable integration requires coordination among states, diverse geographies and technologies and access to new markets and market tools.

Previous studies such as the Western Governors’ Association report Meeting Renewable Energy Targets in the West at Least Cost: The Integration Challenge; the Western Grid Group’s Western Grid 2050; NREL’s Renewable Electricity Futures Report; Energy Foundation’s  America’s Power Plan; and, NREL’s Western Wind and Solar Integration Study to name a few have plowed similar ground from a regional and national perspective and all have found similar tactics are required to make renewable integration happen on a grand scale.

These include:

  • Regional planning
  • Better coordination, utilization and operation of the existing grid
  • Strategic transmission upgrades
  • Faster scheduling of generation onto the grid
  • Energy Imbalance Markets based on rapid (five minute) resource dispatch
  • Diverse portfolios of renewable technologies
  • Exploiting geographic diversity and the inherent uncorrelated variability it provides
  • Repurposing gas generation for flexibility and repowering gas plants with fast ramping technologies
  • Improved resource and weather forecasting
  • Reserve management
  • Taking advantage of electricity storage
  • Distribution- side energy efficiency and demand response tools

E3 touches upon the need for combining these measures in California with the largest portion (a third) of all western electricity demand, and which has designs on even deeper penetrations of renewable energy than have ever been added to a single system before. California is expected to meet its goal of providing 33% of its electricity energy from renewable power sources by 2020. The E3 study explores what the next likely steps may be if California shoots for 40-50% of its load being met by renewable generation by 2030. But California, like many states, has suffered from a sort of renewable xenophobia, the determination to meet all renewable generation development and integration needs from sources largely within its own borders. This report shows that going it alone will cost more, be technically much more difficult, and be likely to create overgeneration challenges when renewable power plants – mainly solar – cause a glut of generation into the system when demand for power is low.

In contrast, taking a more coordinated approach helps avoid or softens many of these problems and saves money; lots of it, while increasing the reliability of the grid and rapidly ramping down greenhouse gases and conventional air pollution. This is because coordination improves the efficiency of the grid, provides access to cheaper geographically diverse renewable resources that complement California’s own, and allows California to share (and sell) reserves and surplus renewable generation with neighboring balancing authorities and states. In combination these benefits mean fewer gas-fired power plants will be needed for balancing renewables and providing peaking power. The gas plants we will operate in the future will start and reach full power rapidly, use less fuel, emit less pollution and will be used principally to back up renewable power sources.

The E3 report takes a poke at quantifying the cost of renewable integration at 40 and 50% levels using a go-it-alone approach (9-23% increases), and this is likely to get most of the attention. But this analysis will likely be misinterpreted and misunderstood. Some may say the report shows renewable integration will come at too steep a price. But the report repeatedly points out that the costs will be lower if a coordinated and diversified approach is used. Utility rates will increase no matter what between now and 2030, making the cost of renewable power, which comes with no fuel cost volatility, a safer economic as well as environmental bet.

About the Authors

Carl Zichella

Director, Western Transmission

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