Tracking California’s Grand Experiment with Solar

California solar farm

California is leading the nation’s transition from fossil fuels and nukes to renewable fuels, mostly solar power. The Golden State’s aggressive investment in solar energy has created such a glut of daytime electricity that solar wholesale prices literally drops to zero and such a shortage during the night that real-time prices surge as high as $1,000 per megawatt hour. Regulators and utilities are learning how to cope with these problems through battery storage, grid modernization and energy conservation.

Hopefully, Virginia utilities and regulators are paying close attention as the Old Dominion defines its own approach to renewable energy. On the one hand, by going slowly, Virginia can learn from California’s mistakes and work-arounds. On the other, Virginia’s cautious approach to solar risks allowing other states crack the code first on how to generate reliable, lower-cost and green power, thus converting the price and quality of electricity from a competitive advantage to a disadvantage.

In 2016 the average cost of electricity in Virginia was 8.88 cents per kilowatt hour, according to the U.S. Energy Information Administration. In California, the cost was 14.88 cents per kilowatt hour, 40% higher.

California is spending billions of dollars in giant test project in which the entire state economy is the subject. The great challenge with solar, as oft alluded to in Bacon’s Rebellion, is coping with intermittent nature of generation. Last month, notes the Wall Street Journal, Sempra Energy flipped the switch on a bank of 400,000 lithium-ion batteries installed by Virginia-based AES Corp. The batteries will smooth out power flows in San Diego’s solar-intensive electric grid. Meanwhile, Tesla, Inc., is supplying batteries to a Los Angeles-area network tied together in a microgrid of 100 office buildings and industrial properties. Reports the Journal:

When [Edison International] needs more electricity on its system, the batteries would be able to deliver 360 megawatt hours of extra power to the buildings and the grid, enough to power 20,000 homes for a day, on short notice. At other times, the batteries would help firms hosting the arrays to cut their utility bills.

Clearly, strategies exist for overcoming the variable and daylight-only production of solar panels. The big question is how much the batteries cost. And that tends to be a ticklish subject. As the WSJ noted regarding the Tesla/Edison International project in Los Angeles, “The companies declined to say how much the project would cost.”

Broadly speaking, battery storage has two different uses. One is fine-tuning the electric grid, a function that exploits the ability of batteries to respond instantaneously to micro-fluctuations in voltage and frequency. The other is storing electric power until it is needed at a different time. In this second use, batteries compete with natural-gas peaker plants, which are essentially jet turbines that sit idle until needed. Unlike conventional power plants that ramp up and down slowly, gas peakers and batteries can respond quickly to changes in demand.

Stored power from lithium-ion batteries can do the work of a natural-gas peaker plant at an average cost of between $284 and $581 a megawatt-hour, according to a December report by Lazard Ltd. In contrast, electricity from a new gas peaker plant costs between $155 and $227 a megawatt-hour, according to Lazard.

(By comparison, the average retail price of electricity in Virginia is about $89 per megawatt hour.)

Clearly, lithium-ion batteries are far too expensive at present to use on a large scale in Virginia as a peaking resource. But solar advocates hold out the hope that battery storage will decline in cost. Is that realistic?

The lithium-ion battery chemistry may be reaching the limits of its potential, reports Fortune magazine in an article published yesterday. “The biggest proof may be in the spate of explosions now plaguing smartphone makers from Samsung to Apple, in part thanks to li-ons’ tendency to grow dendrites, metal strands that can cause short circuits.”

John Goodenough, a co-inventor of the lithium-ion battery, claims to have developed a solid-state battery that replaces lithium with sodium, which, in theory, can hold three times more energy, charge quickly, and never explode. Commercialization of the technology is years away, however, warns Fortune. By way of comparison, Lithium ion batteries took a decade to move from the laboratory to the marketplace.

When it comes to reducing CO2 emissions, Californians seem willing to pay any price. That approach will not sell politically in Virginia. But California is more than a Land of Fruits and Nuts. It has some of the most brilliant scientists, engineers and technologists in the world. If green power can be made economically competitive with fossil fuels and nuclear, California will figure it out. We Virginians should not necessarily emulate its example, but we should be paying attention.

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14 responses to “Tracking California’s Grand Experiment with Solar

  1. I think you’re painting a big of a biased picture of California and their use of solar.

    You cite their cost of electricity at 14.88 cents per KWH and imply that’s because they’re using solar .. and then having to pay for non-solar at other times… but in the EIA reference you use -you’ll find this also:

    New England 18.44
    Connecticut 19.02
    Maine 15.68
    Massachusetts 18.87 1
    New Hampshire 18.68
    Rhode Island 18.39
    Vermont Graph 17.22

    do you think those states are also “fruit and nuts” doing a “giant test” ?

    to what would you attribute the very similar high prices in the East?

    those high prices actually result in much higher adoption of energy efficient strategies.. which actually results in lower electricity usage – and less pollution and less coal ash piles..

    In terms of storage – I agree.. it may be a while in coming and may take a long time to be price competitive with gas turbines..

    but here’s the big kicker.. if storage ever gets cost-effective – what would keep widespread adoption of it in concert with solar – at the individual home or business level which in turn would forever change the current utility model of electricity generation.

    There is no question – right now -there would be massive adoption of solar in Virginia – even without cost-effective storage – if it were not for what boils down to the State protecting Dominion from market forces.. at the same time it supports opening up the taxi and health care industry … to the market.

    I think we ought to be honest that solar is not something that won’t succeed…in Virginia , it will.. where it is allowed to … How long can we point fingers at California as our excuse for our own refusal to let solar compete in Virginia.

    I think when our economy can challenge California – we could then point out their “flaws” … but as long as we base our own economy on the Federal Deficit and protecting Dominion’s monopoly – I think we’re more blathering blowhards than righteous market-force guys…

  2. Larry, I’m sorry, I didn’t mean to imply that solar was the reason for California’s high electricity rates. I’m sure there are many reasons. But that’s not the main point. The point is that when solar reaches a certain level of penetration, as it has in California, it causes major reliability problems, which in turn require expensive fixes. The lesson isn’t that California is doing things wrong — they may well be doing what’s right for them — but that Virginia can learn a lot by watching very closely what works and what doesn’t work in California.

  3. CA has been trying, and is lowering cost from the Enron days … and those New England numbers are saving money for the state members of RGGI, that group VA declined to participate in.
    Here is another point of view about ‘waiting’.

    http://breakingenergy.com/2017/03/03/what-the-us-electricity-sector-can-learn-from-the-telecom-revolution/?utm_source=hs_email&utm_medium=email&utm_content=43854891&_hsenc=p2ANqtz-8saGvWBzEGSn0yvJh4ciaHFBnUOKjSQUh3szhjVetlG30trArfSJ6-OVGcgUsGftQZI9f4FewsRu1_OFgp3bovetuNXQ&_hsmi=43854891

    The American telecommunications story of grid defection and bypass can enlighten today’s utility system operators and regulators as they stand at the crossroads of choosing between using regulatory processes to cling to the past, or innovating in tandem with new technologies and new companies to deliver value to customers. In addition to delivering new value and markets, the new ways are cheaper and cleaner, too.
    I posted this for Senator Warner on his site. It is a comparison he should understand.
    As long as the ACP remains in VA’s future plans … VA’s choice is for “clinging to the past.”

  4. Even on the reliability issue – I have my doubts that the problem is as big as it is said to be – because it’s the 6th biggest economy in the world (just behind Germany and the UK) and four times bigger than Virginia AND it has major military bases, and hundreds of large energy intensive companies that must have reliable power. They’d likely leave, in droves, if there were major reliability problems.

    take a look at this EIA map of California and it’s source of electricity,

    http://www.eia.gov/state/?sid=CA

    What I do agree with – is that trying to incorporate more solar DOES present reliability issues.. that do have to be dealt with – and they are struggling with the gap between baseload and peak… covered by solar when soar is available and filling that gap when solar is not available.

    I suspect this is one of the reasons:

  5. And Larry’s map looks at another way CA is thinking about how to deal with their grid … and use less.
    http://e360.yale.edu/features/in-the-face-of-trump-environmental-rollback-california-stands-in-defiance

    “Spurred by the nation’s strongest and most innovative building code, new buildings in California now use about 75 percent less energy than pre-code buildings, and have saved enough energy to head off construction of the equivalent of seven 500-megawatt natural gas-fired power plants. …

    “The state is also expanding its grid to neighboring states to increase the grid’s flexibility during times of production overcapacity. For example, daily electricity demand increases in Arizona when people get home from work, a time when California may have an overabundance of renewable energy that it could sell to Arizona. Because the sun sets in the two states at different times, peak electricity demand in Arizona (near the end of the day) may overlap with peak solar production in California (near the middle of the day).”

    And a man who owns a lot of Wyoming land wants to build wind to ship to CA .. Wyoming is difficult though

    • Wind power from Wyoming is something they COULD use out there in CA — IF that man can connect readily to a transmission line that’s on the western grid side of the Continental Divide. But building a new transmission line across the Rockies would require a huge, probably impossibly large, investment. Most of the wind power out west these days (and there’s a lot of it) is generated east of the Rockies and transmitted east into Texas or the Plains States.

  6. to add to the discussion here – lest anyone thinks California is lacking in electric power generation:

    Note also, besides the large number of gas plants – the abundance of hydro sites… of which only 4 are currently pump-storage.

    I do not see California as “experimenting” as much as I see them as a leader like they are in many areas and Virginia basically mired in protecting the Dominion monopoly and clinging stubbornly to old thinking and obsolescence that actually encourage wasteful consumption of energy – that’s ultimately harmful to ratepayers and taxpayers. Other states use for less electricity per capita. Our increased use of it – coal based – increases mercury deposition and coal ash issues. More gas use is already possible without adding as much pipeline capacity as proposed – yet this is where we are instead of where we should be.

    California is a state that economically vibrant – and p spending – and suppressing economic activity that would develop solar and wind … by essentially reserving it for Dominion – and putting obstacles in the way of others who would do it.

    I’ll take the California path and continue to regret having to live in a state
    that operates like Virginia.. who is really not looking ahead but rather trying to hold on to the past… to it’s own detriment.

    • California’s economy goes through wild swings – from enviable growth to dismal stagnation (sort of what has happened in Virginia after consulting cutbacks and sequestration). I also believe that the state and local treasuries are highly dependent on a very small number of taxpayers, most especially those with massive capital gains. The state is in good shape for now, but is burdened with enormous public pension debts and a crumbling infrastructure.

      Sometimes, California has some excellent ideas, but it also follows some foolish paths. What other state is making such a massive effort to bring in poor people, most with little or no education, from around the world. There is a difference between being merciful to people who have lived here without authorization for a long time and not caused trouble and fighting against any border control whatsoever.

      Whether renewables at any cost makes sense in the long run is an open question. All and all, but for the weather, I’d rather live in Virginia than California. Our government is much more thoughtful and less ideological, probably due in significant part to the Dillon Rule. Not to say there’s no room for improvement.

  7. Don’t forget CA imports a lot of power, including relatively low cost hydro from Oregon/Wash, and from other sources from other states.

    • check the map Tbill .. and check out this list of power plants in California:

      https://en.wikipedia.org/wiki/List_of_power_stations_in_California

      It looks like California has a LOT of power plants including more than 40 of them producing more than 600 MW alone

      might be interesting to actually know how much they “import” but I’m not sure that should be viewed any differently than we might looking at Virginia “importing” from PJM.

      the bigger point is – is California having reliability problems by trying to incorporate more solar than they can or should?

    • TBill, you are correct: when the sun isn’t shining, CA has more load than it can serve efficiently by non-solar means; the high cost of electricity in CA reflects the high cost (old cycling and peaker units) generation they have to run to serve all that load (because they don’t have enough hydro or nuclear or even coal and gas to supply it at lower cost). The western grid has enough capacity but the wrong kinds — including, at this time, too much solar capacity in CA (so much so that they have to dump power in the daytime, yet of course they don’t have any solar after sunset) — this is what happens when you let politicians, not the market, prescribe what’s to be built. Yes there is a lot of hydro out there but those are mostly old, small dams and the lake levels are depleted quickly if used steadily. There is geothermal also; again, small units and not nearly enough in the aggregate. There is natural gas, but the gas supplies are mainly in the south around San Diego and there is not enough gas fired generation (or the pipeline capacity to serve more) in the urban load center from LA to SF/Sacramento to carry that amount of load.

  8. I am not as sanguine about CA. CA is a classic product of government interference in the market — in three ways:

    1 – Land use. Cheap government water has led to land use and population distribution patterns that are unsustainable for the California climate (and will get worse with GW).

    2 – Electricity generation Part I. Cheap government hydroelectric power (much of it in the Pacific NW but still part of the California/West Coast grid) got people used to cheap electricity for farming as well as urban life, then they tried to fill in with peakers and nukes. The explosion in gas-fired generation is a relatively recent phenomenon.

    3 – Electricity generation Part II. California tried to set up its own wholesale bulk power marketplace. California, for all its size and economic strength, is not an isolated grid, and you cannot operate an effective wholesale energy market when people within the same grid don’t have to participate. In this case, the market, the western grid, is defined by the weak connections that cross the Rockies; the CA market was ripe for market scams and manipulations, which is exactly what happened when Enron and others began playing big-dollar games there in the 90s. They fixed the worst of that but they still have problems controlling the flows north-south, from the gas fields of southern CA and the hydro power of Oregon/Washington and the urban corridor from LA to SF.

    4 – Electricity generation Part III. Now, on top of all that, you’ve got the big political push for renewables. I have nothing against renewable power where the wholesale marketplace supports it, which is the case in large portions of the country including Virginia. But, CA went out there in the 80s and pushed “cogeneration” with extremely high calculations of “avoided cost based” payments to developers, and then, when the new trend towards solar and wind took off, got 100%+ behind renewables, and what you have today is the result of that “+.” The market did not ask for all that solar; the CA government did, demanding that the utilities subsidize it and buy its output even in hours when it cannot be resold to the market. This totally predictable (and predicted years ago) solar glut was entirely self inflicted.

    Thanks to the PJM wholesale markets (and similar ones in NY and New England and the Midwest), which function efficiently, we have avoided the worst of that mess in the urban East. California is simply a mess. Again, it’s a perfect demonstration of why the government should not interfere with a functioning energy marketplace.

    You ask about reliability. One thing CA does have is access to the hydro power of the Pacific NW. Hydro is by its nature extremely quick-start, and can be matched well with solar fluctuations. But there isn’t nearly enough hydro power to sustain the West Coast load after dark, hour after hour. The water behind those dams is a precious resource for quick-start uses and, except during the rainy season, needs to be rationed for when it’s really needed. So, ramping power is not lacking, but cycling power from the likes of gas-fired plants is in desperately short supply. Thus, the high night-time prices!

    • Both legislators and regulators make poor decisions about the market. Adopting laws or regulations to protect competition (not competitors) and protect consumers in the areas of health, safety and fair dealing and disclosure certainly has a place. But picking technology or mandating market share is likely to wind up screwing the public and trampling the public interest.

      A good example is cellular. Europe picked GSM. The U.S. and some other countries allowed the market to work. We had GSM, TDMA and CDMA. Over time, TDMA faded out. Now we have LTE, picked not by the FCC or Congress, but by the market. The U.S. approach is better as it relies on market forces.

      The same logic should occur for electricity. Forcing fossil fuel plants to compete against renewables and requiring different types of renewables to compete against each other will provide better results and better prices than if the VSCC or the GA make selections.

      What may be needed in Virginia is an active intervenor to challenge both Dominion and the staff’s positions. Virginia Chamber of Commerce?

  9. re: ” CA is a classic product of government interference in the market ”

    I’m a little amused here… do you mean as opposed to the “govt interference” in Virginia’s energy “market”? Au Contraire!

    your 1. – while perhaps correct expands this discussion in huge ways!

    2. – electricity for farming? percent of total? more than 1 or 2 %?

    3. – that’s a pretty complex conundrum.. not too sure if it can be viewed so simply

    4. re: ” But there isn’t nearly enough hydro power to sustain the West Coast load after dark, hour after hour.”

    there is a LOT of hydro in the west – way, way more than in the east … those mountains trap west to east weather and in winter build 10-20 feet of snow.

    it’s true that the drought harmed that but it’s also true that there are more than 40 dams in California alone – 5 are pump-storage and others may well be retrofittable.

    but the big thing is that California – like the Northeast States do – can affect usage by price.. California is NOT the highest-priced electricity in the US and higher price incentivizes demand side conservation… which depending on your point of view is not necessarily a bad thing since pollution results from usage and the higher the usage the more pollution – something that California cannot have west of it’s mountains that create inversion layers.

    Finally, California is the 7th largest economy in the world – and has hundreds of businesses and govt installation that MUST have RELIABLE power – and apparently DO GET IT…

    I just have more faith in California than I do Virginia in moving forward and finding solutions to the solar/nightime issue… and I favor California’s involvement in the market over Virginia’s complicit discouragement of a market if Dominion does not want or like it. I see that as far more harmful than California’s approach and am amazed that we don’t view Virginia’s protection of a mega-monopoly as also “harmful interference” in the “market” as it clearly is… with solar in Virginia.

    Perhaps there is some middle ground between California’s approach and Virginia’s approach.. but Virginia’s approach right now is not in the best interests of Virginians into the future.. in my opinion. Dominion is basically staking the future in fossil fuels .. and California in renewables..

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