The power and energy regulatory environment is in a high state of flux in California amidst increasing integration of distributed renewable energy generation and storage capacity and realizing a statewide goal of 50 percent renewable energy by 2030.
One of the significant changes under consideration is the institution of a new methodology to assess solar and wind power resource capacity. Known as “effective load carrying capability” (ELCC), the new methodology for assessing the capacity of solar and wind power resources that would replace the existing, simpler “exceedance” methodology.
Latest developments regarding the California Independent Systems Operator (CAISO) solar-wind power ELCC initiative were published recently in CAISO’s Regional Resource Adequacy (RA) Third Revised Straw Proposal. The report provides details on all aspects of the proposed revisions to CAISO’s RA provisions as California and neighboring states hash out the details of an envisioned multi-state independent systems operator (ISO) and grid balancing authority.
Dubbed “uniform counting rules,” exceedance and ELCC methodologies are used by utilities to determine the maximum power capacity of any given energy resource used to meet grid energy resource adequacy requirements.
How solar and wind power resources stack up is likely to differ when calculated using an ELCC as opposed to the current exceedance methodology. Switching methodologies midstream is bound to ripple out and affect ROIs and IRRs of existing grid resources as well as proposed projects.
ELCCs have been implemented and proven to be practical and of value in other parts of the country, including by the Midcontinent Independent System Operator. CAISO’s proposed development of a solar-wind power ELCC elicited mixed reactions from industry stakeholders.
The American Wind Energy Association was among those who voiced support. So was Industrial Customers of Northwest Utilities, NV Energy, the Office of Ratepayer Advocates (ORA), Silicon Valley Power and the Western Power Trading Forum (WPTF).
In contrast, the Large-Scale Solar Association (LSA) stated that it believes that the exceedance methodology has worked well historically. It has urged CAISO not to rush the change to an ELCC, particularly given the California Public Utilities Commission’s (CPUC) ongoing work in this area.
In addition, CPUC, Calpine and WPTF stated they think it is unreasonable for CAISO to develop its own ELCC prior to 2018 when the CPUC is scheduled to adopt its own ELCC methodology. Likewise, San Diego Gas and Electric advocate that CAISO wait until 2018 before adopting an ELCC.
Furthermore, four industry stakeholders — the California Department of Water Resources, ICNU, Northern California Power Agency, ORA and six cities said they were concerned about local regulatory authorities, losing authority and hence do not support CAISO developing new uniform counting methodologies.
LSA is concerned about the timing and pace of CAISO’s ELCC development initiative. Furthermore, LSA views the initiative to be of secondary importance given all the work and moving parts and players associated with development of a regional ISO, LSA Policy Director Rachel Gold told Renewable Energy World.
“It is not to say LSA believes an ELCC shouldn’t be implemented, but it shouldn’t be rushed, Gold said. “Any such initiative needs to be carried out carefully and thoroughly via an inclusive process based on rigorous, comprehensive study and review, including within the context of creation of a regional ISO…It’s LSA’s position that regulators and stakeholders ensure the RISO process is well under way first, then move on to consider an ELCC.”
In addition to participating in CAISO’s straw proposals, LSA has been working closely with the CPUC to develop an ELCC. “No conclusion has been reached on that as yet, so we think it would be beneficial to wait for CPUC’s results,” Gold said.
Grid conditions differ across territories, however; and there’s not a lot of consensus regarding exactly what form it should take and how it should be implemented in California, with its high and still growing penetration of distributed renewable energy and, more recently, energy storage resources.
“An ELCC will assess resource adequacy in a much more nuanced way, and there are situations where various resources interact to enhance grid conditions and operations,” Gold said. “We’ve seen this with solar and storage, as well as the combination of solar and other resources…It’s important we get the value right.”
CAISO is of the same mind. In its third straw proposal the CAISO said that any initiative on its part to develop a solar-wind ELCC wouldn’t come until the current RA framework process is completed.