Mon. Jan 27th, 2020

Looming Grid Shortfall Prompts 2.5GW California Procurement Proposal

State regulators have proposed a significant set of responses to what might be a looming grid reliability shortfall in Sothern California, together with a 2.5-gigawatt reliability sources procurement between 2021 and 2023.

Though the proposed ‘all-source’ procurement would enable present pure gas-fired peaker vegetation to compete, it may additionally open a large new marketplace for renewable vitality, vitality storage, demand response and different most well-liked options to fossil fuels. 

The proposal may additionally enable tons of of megawatts of seawater-cooled fuel vegetation, often known as OTC vegetation, to maintain working previous their 2021 retirement dates, if the reliability shortfall it fears can’t be met by different means. 

Thursday’s proposed choice from the California Public Utilities Fee (PDF) is the end result of greater than a 12 months of research and debate over the state’s grid reliability wants, as a part of its Built-in Useful resource Plan continuing. Particularly, it’s targeted on Southern California, the place a mix of nuclear energy plant closures, pure fuel system constraints, the approaching closure of OTC vegetation alongside the coast, and projections of tightening situations for capability accessible for import from different states, has led state grid operator CAISO and utility Southern California Edison to undertaking gigawatts of reliability shortfalls by 2021. 

Not all events agree on the importance of the approaching grid reliability menace, and the CPUC and CAISO are persevering with their evaluation, Thursday’s proposal famous. Even so, “given the imminence of the 2021 system reliability wants, there may be not time to finish that evaluation, enable extra enter and vetting from events, and nonetheless have procurement happen in time to satisfy a possible shortfall within the timeframe of Summer time 2021,” administrative legislation decide Julie A. Fitch wrote in Thursday’s proposed choice. 

In that mild, ordering an all-source procurement, backed by extending the lives of OTC vegetation, represents a “least regrets” technique, “since electrical energy shortages would most definitely result in regrets,” she wrote. 

Southern California Edison within the sizzling seat

Southern California Edison, the investor-owned utility answerable for practically 70 p.c of the load within the grid area into consideration, shall be answerable for the lion’s share of the procurement, or 1.75 gigawatts by 2023. However a good portion of it should additionally fall to the area’s community-choice aggregators (CCAs), town and county entities which have taken vitality procurement for a small however rising share of the utility’s buyer base. 

The largest is the Clear Energy Alliance of Southern California, previously Los Angeles Group Selection Vitality, which has been including cities throughout L.A. and Ventura counties. The CCA is now answerable for about 14 p.c of load within the area, and shall be answerable for 357 megawatts of procurement by 2023. 5 different, a lot smaller CCAs will every want to acquire between 5 to 17 megawatts apiece by 2023. 

Lastly, about 14 p.c of Southern California Edison’s load within the area is business and industrial clients being served by electrical energy service suppliers (ESPs) below California’s restricted direct entry program. These suppliers shall be answerable for 355 megawatts of procurement by 2023. 

CPUC has proposed to stage this procurement over three years, requiring every load-serving entity (LSE) in query to get 60 p.c of their whole by 2021 and 80 p.c of their whole by 2022. The outcomes are proven within the chart beneath: 

As we famous in a July article in GTM Squared, stakeholders in California’s IRP continuing have pushed for a wide range of options to the potential of a coming reliability shortfall in Southern California. Photo voltaic trade teams have pushed for brand spanking new guidelines that will higher worth “hybrid” solar-plus-storage techniques as a part of this and different CPUC proceedings.  

The California Group Selection Affiliation (CalCCA) initially opposed including a procurement, primarily based on its considerations with the strategies that went into the forecasts it’s premised on. These embody modifications to how CPUC calculates the efficient load-carrying capability of utility-scale photo voltaic farms being constructed by builders below energy buy agreements with CCAs — modifications that would, in impact, de-rate how a lot solar energy is decided to be value to the grid throughout totally different occasions of the day, week, and 12 months.  

However the CPUC deferred to the urgency of CAISO, which initiatives shortfalls of a minimum of 2.three gigawatts by 2021, and a pair of.2 gigawatts in 2022, and of Southern California Edison, which provided the much more dire prognosis of as a lot as 5.5 gigawatts of shortfall by 2023, given the retirement of OTC capability. 

On the difficulty of choosing utility-owned versus third party-owned belongings, the CPUC provided few particulars, past saying that Southern California Edison might “suggest to personal a portion of the sources to be procured,” however that it should “adhere to the prevailing guidelines about utility participation in utility-run solicitations.” Whereas present sources shall be allowed to compete within the all-source procurement, initiatives already below contract or continuing below different applications are dominated out. 

SoCal’s grid complications

The proposal follows a string of surprising orders from the state’s regulator to take care of the continued reliability crises for Southern California’s energy grid.

It began with the compelled closure of the San Onofre nuclear energy plant in 2013, which led the CPUC to order Southern California Edison and neighboring utility San Diego Gasoline & Electrical to conduct a first-ever procurement of distributed vitality sources equivalent to photo voltaic, batteries, demand response and vitality effectivity to assist meet the ensuing capability and reliability shortfalls by decade’s finish — though the CPUC additionally allowed each firms to construct new pure fuel vegetation as properly. 

The compelled closure of the leaking Aliso Canyon pure fuel storage facility in 2016 compelled the CPUC and utilities to reply way more shortly to the potential of working wanting gas for peaker vegetation throughout summer season months. The fast-tracked battery procurements ordered to fill the hole have been capable of provide practically 100 megawatts of vitality storage from Tesla, Greensmith Vitality and AES Vitality Storage inside lower than a 12 months, and Southern California Edison and Southern California Gasoline additionally launched massive demand response applications with Google’s Nest and tens of 1000’s of its clients within the area. 

CCAs have additionally been inking photo voltaic and vitality storage contracts at a speedy clip — albeit nearly completely amongst the older and bigger CCAs in Northern California. Silicon Valley Clear Vitality and Monterey Bay Group Energy signed a joint take care of Recurrent Vitality in October for a 150 megawatt photo voltaic plant with 45 megawatts/180 megawatt-hours of batteries, in addition to a deal with EDF Renewables North America for 128 megawatts of photo voltaic with 40-megawatts/160-megawatt-hours of batteries. 

And East Bay Group Vitality in Alameda County has contracted for a 20-megawatt/80 megawatt-hour battery from Vistra to interchange a jet fuel-fired peaker plant, behind-the-meter solar-battery techniques from Sunrun to offer a half-megawatt portion of its future RA wants.

However as a result of the looming capability shortfall is concentrated in Southern California, the CPUC isn’t asking northern California CCAs, or bankrupt utility Pacific Gasoline & Electrical, to take part on this procurement. 

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