Chicken Little and the “Crisis” of Grid Reliability

The Wall Street Journal published an alarmist piece yesterday depicting California’s electrical grid as the victim of a ‘looming crisis’ brought on by the state’s ‘growing reliance’ on wind and solar.

While the success of wind and solar certainly raises new issues in terms of how to plan and operate the future electrical grid, the article overstated the severity of the problem California currently faces. Worse, it sensationalized an issue in a way that offers little real insight into the challenges or potential solutions.

Before we get into that, let’s first just look at the facts in California. What better resource to turn to than the California Independent System Operator (CAISO) website. Here we find a snapshot of the state’s electrical load and resources for 27 Feb 2013: 

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What does this tell us? California’s daytime load today peaked at just over 27 gigawatts, followed by the evening load peak of around 29.5 gigawatts. Minimum load never went lower than 20 gigawatts. Meanwhile CAISO had between 32-38 gigawatts of generating resources available during that period to meet that demand.  

Now let’s look at what role renewables played in the state during the same period:

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Solar was the highest contributor from the renewables camp today, contributing just over 1.5 gigawatts of peak output. Altogether if you add up the other renewable resources, they maxed out at just under 3.5 gigawatts. But that includes 920 MW of geothermal which you can see is almost rock steady—plus 300 MW of hydro which is 100 percent dispatchable.

So the real ‘intermittent’ supply today maxed out at about 2.3 gigawatts. That’s less than 10 percent of peak daytime load and less than 8 percent of the maximum load. Note that the intermittent supply barely crosses over 10 percent of minimum demand of 20 gigawatts and CAISO had way more resources available than it needed to meet the peak.  

Clearly California is not ‘overly reliant’ on wind and solar and this is clearly not a situation ‘out of control.’ In fact it looks very much in control — and it looks very much like there’s more capacity to absorb intermittent resources. 

Just for perspective, let’s compare California to Germany where they really do have high penetration of solar and wind relative to load. Below are graphs showing various power sources contribution to meet load for two different weeks in 2012. The upper graph shows a period in January when wind supplied over 40 percent of Germany’s power needs. The lower graph shows a period in May when solar provided about 40 percent of Germany’s power needs. Guess what. Germany didn’t fall of the map and didn’t experience major blackouts.

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How does Germany make it work? By combining intermittent and dispatchable resources in a way that reflects their features and strengths.  

They use baseload resources like nuclear and large gas- or coal-fired turbines to meet the predictable and consistent load at the bottom of the chart. Next they let wind and solar generate whatever they can as the wind blows and the sun shines — both of which are lot more reliable than they sound and can be accurately forecasted a day or two in advance. They then fill the remaining ups and downs with highly dispatchable load-following resources like hydro and gas-fired peakers. And they maintain a prudent amount of dispatchable capacity in reserve in case load rises or intermittent resources fall off.

It’s not magic — it’s actually pretty logical and straightforward. And the benefit Germany gets is tremendous: a high proportion of 100 percent clean electricity with solid reliability.

To be fair, California’s grid and operating topology are a lot different than Germany’s. A more complete analysis has to look at operating issues year round. And the issues can get highly complex when you look at isolated segments of the grid. Currently there are big issues in the western Los Angeles basin as a result of the loss of the San Onofrio Nuclear Generating Station and legal issues related to contracting existing gas resources to fill the gap.

However, what is clear both from the California and Germany examples above is that there’s strong evidence the technical capabilities exist to enable California can absorb a lot more renewables without threateaning overall reliability.

The Conversation About Reliability We Should Be Having

The last thing we need is an alarmist, sensationalized ‘chicken little’ conversation about the reliability issue. What we do need to have is a pragmatic, constructive conversation about grid reliability in California and the implications for the rest of the nation.

An increasing number of experts believe that the state is actually overbuilding the amount of gas-fired resources it needs in an attempt to ‘over-insure’ against the issue of intermittency as it approaches its 33 percent RPS goals. The risk of over-insurance of course is that state ratepayers will end up footing the bill for an overbuilt system — and ratepayers will blame rising rates on renewables rather than bad grid architecture or poor integration planning.  

The problem lies in the way California regulates its power industry. As a recent report from the Hoover Institution points out, “No single state entity is in charge of integrating initiatives and addressing gaps, decision making is slow and siloed, and — most importantly — there is no consolidated roadmap and decision-making schedule.” In California, the CPUC oversees procurement and the CAISO oversees reliability. And while they are increasingly trying to coordinate, there is no systematic technical or economic optimization in place to balance cost, reliability, and growth.  

That’s a problem worth fixing. The state’s 33 percent goal is just the beginning. Complying with California’s landmark carbon regulation (AB32) will require the state to reach 80 percent renewables by 2050.

No one’s saying it will be easy, but it is important enough that we shouldn’t just throw up our hands. The technical and regulatory issues that have to be resolved are complex and entangled in energy politics. We should not allow the alarmists to tell us that something that is hard is not worth doing. California is a state that has solved big problems before and the U.S. is a place where we pride ourselves on our exceptional place. Surely a matter this important can be solved with a little ingenuity, grit, and determination.

This article was originally published on Harris’ Clean Energy Future blog and was republished with permission.

Lead image: Storm clouds via Shutterstock

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I'm CEO of Recurrent Energy, a leading developer of solar projects for utilities and large energy customers. Recurrent Energy develops, builds, finances, and operates solar power projects--marketing clean electricity at competitive rates via Power Purchase Agreements or feed-in tariffs in North America and emerging markets worldwide. Recurrent Energy is a US subsidiary of Sharp Corporation, following the sale of the company in 2010. With a 2-Gigawatt pipeline and almost 500MW of signed projects, we're well on our way to building a fleet of clean power plants sited right where they're needed most. Prior to Recurrent Energy, I ran EI Solutions (now SunTech Energy Solutions), the solar power systems division of Energy Innovations. While at EIS, I delivered record growth and industry milestones that included the sale of the largest US corporate solar power system to Google. EIS was formed following the sale of Prevalent Power, a solar power system integration business I founded in 2001, to Energy Innovations. Before solar my background was in technology startups. I've raised (or helped to raise) over $200MM in equity financing for startups over the past decade or so. One company I co-founded, RedEnvelope.com, had an IPO in 2003. The other, Novo Media Group, was sold several years ago to Publicis, one of the world's premier marketing and media companies. I've also had my share of challenges along the way--my firsthand experience of a failed IPO registration for Novo and the collapse of a well-funded dot-com called WineShopper.com have helped to season me as an entrepreneur and a leader. Functionally, the bulk of my experience is in marketing, business development, and sales with a good dose of general management and finance gleaned from my startup adventures. During that time I've had the opportunity to work with clients like Toyota Motor Sales USA, GlaxoWellcome, MCI, Apple Computer, Hewlett-Packard, Nikon Precision, IKEA International, HGTV (Scripps) and NBC Digital Publishing. My background has been particuarly useful to me in the emerging clean energy industry where many of the business challenges are centered around market entry and initial sales traction. As an entrepreneur, I am passionate about startups and passionate about clean technology, but I have zero patience for dreamy ideas or unfocused execution. I'm a regular speaker at energy industry events and I'm now sharing more of my thinking via my weblog Clean Energy Future. I'm a graduate of UC Berkeley, a published author, private pilot and proud father of twin boys.

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