A great discussion of the state of solar+storage policy and markets at @SEIA‘s California #SolarEXPO with @SEIA rate expert Tom Beach, @CALSSA_org ED Bernadette @DelChiaroSolar,and @ENGIEResources CA Policy Lead Allie Detrio pic.twitter.com/1jHvfNe20a
— Rick Umoff (@RickUmoff) April 25, 2019
This is not your grandfather’s grid. Almost one-third of the generation in California will be on the ditribution system, which is way different than things were mapped out to work. The end of the supply chain has become the sender. The California Solar Power Expo was heavy on experts asking big questions about the state’s energy future, much of which hinges on the various (still theoretical) ways storage will be incorporated into everything. Here are the perspectives that stood out most to us from the stage over the two days at the Marriott Marquis San Diego Marina.
Large-scale storage in wholesale markets
A big question on the role of large-scale storage was recently answered in Federal Energy Regulatory Commission’s (FERC) Order 841. That question centered on whether storage is considered generation or reliability. The answer to the question within Order 841 is that storage can serve as both. Order 841 directs ISOs and RTOs to come up with rules to open up their wholesale energy, capacity and ancillary services markets to energy storage resources .
Making storage eligible for the wholesale market and will have a huge impact on the economics of potential projects. Prior to Order 841, battery projects were limited to behind the meter or front of the meter use cases, but storage provides much more potential than this either/or traditional classification.
“Thats part of what driving the projection of energy storage tripling next year,” said Craig Horne, senior director of energy storage at Swinerton Renewable Energy. “Behind the meter is now growing huge because of the additional wholesale market value.”
FERC’s Order 841 causes a shift in the use case for the storage portion of systems, but knowing how the storage will be deployed is a critical layer of design complexity, all of which is dependent on specific use cases. As an example, Horne said to consider a system thats 10 MW and needs to deliver for 4 hours of continuous energy. This would require a 40 MW battery, right?
“At the outset that’s true but the power is coming out in 1,000 volt DC and has losses along the way, and then there’s an efficiency loss when you charge up, plus the battery degrades over time. And since you need to sustain it for 4 hours, that’s more than 12 MWh of capacity … in the end you will need closer to 50 MW of storage to do that consistently over 10 years.”
But then, if you are designing for a different use case, that might mean less degradation, which means you could scale back 45 MW of storage.
“We’ll see a transformation where you optimize to capture the ITC, but as 841 comes in, that single use goes into a more well rounded grid focus that means maybe more demand, more cycles and more throughput,” Horne suggests.
Storage as a duck curve antidote
In its periods of need, California still gets a larger portion of its demand served via natural gas pipelines from Texas — about 50 percent right now. It’s a system that certainly works, but Vibhu Kaushik, director of grid technology and modernization at Southern California Edison, said to consider how natural gas moves through that pipeline at 30 mph. It takes a day to deliver.
“So, the question is how do you schedule the amount of gas you need tomorrow 48 hours in advance so the pipeline provides it?” he asked.
This is a huge potential use case for local storage to balance out these periods of need with more timing flexibility.
“Energy storage is one of the few technologies readibly deployable in a matter of months,” he said. “Hydro takes a decade to build; gas-fired takes several years. So, Southern California Edison offered third parties to bid on storage projects that could be done by the end of the year. From signed to built, it was less than four months — 80 MWh in demand via battery packs.”
Another deveolping use case is in the hybridization of exhisting gas plants.
“90 percent of the time they just sit there,”Kaushik said of these gas peaker plants. “In partnership with adds of 10 MW of battery storage, now the whole unit provides spinning reserves.”
Policy still matter
Negotiations are complete and the largest utilities in California have made rate changes to shift demand into mid day with the new peak time going from 4 p.m. to 9 p.m. This is a big change for solar-only value propositions, an the change was made to incentivize storage adoption.
This coupled with SGIP and the storage inclusion with Title 24, and it’s easy to see how policy is still key for driving the demand of storage in California, just as it was during the Million Solar Roof initiative that pushed solar to the level that it is today.
Unfortunately, there is still work to do on this front with solar in California. Bernadette Del Chiaro, Executive Director of the California Solar & Storage Association highlighted the dip in solar installs as a direct result of NEM 2.0, while noting the upcoming fight for NEM 3.0 coming in 2020.
And then there is Sacramento, which almost, out of nowhere, approved a super high grid access charge for solar customers. Del Chiaro reported that they were able to successfully argue against it and table it just prior to her arrival at the conference, but the whole affair shows why SB 288, the Solar Bill of Rights, is so important.
The most underrated issue heading to 100 percent renewables
Gary Stern, Director of Regulatory Policy at Southern California Edison, made the most interesting / obvious point of the conference in our notes.
“From the view of the utility, procuring the 60 percent renewable target isnt challenging. We’re on a path, from 2008 out to 2030 already to go beyond it. For procurement, it’s not hard because that’s based on a fraction of our load. Our load is likely to be declining from efficiency and from migration to things like CCA.”
But out to the 2045 goal of 100 percent clean energy? There are issues. The overall objectives involve an intertwining of decarbonization, reliability and affordability between the grid and (this is key) transportation.
“Most of the carbon doesn’t come from the electricity sector,” he noted. “A lot more comes from transportation. So we need a lot of electrification in those sectors. For that to work, electricity better be affordable. Who will buy an EV if those costs are way higher? Or switch from gas? It won’t happen at the pace necessary otherwise.”
This could emerge as a tricky problem where the mandate for 100 percent clean energy accidentally hinders decarbonization overall. What if as time goes on we see that completely eliminating that last 10 or 5 percent is so costly as to derail the broader goals of wide spread electrification? There is a lot of time to address this, but that, along with the concerns of low-income communities, need to be kept in mind during this march toward a low carbon future.
— Solar Builder magazine