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Solar-fueled oversupplies drive record renewable energy waste in California

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Berkshire Hathaway Inc.'s 550-MW Topaz Solar Farm in San Luis Obispo, Calif., is one of the world's largest solar projects.
Source: First Solar Inc.

As California's renewable energy use climbs to new heights, the state's primary power grid is also setting records for wasted wind and solar generation. In the first five months of 2019, the California ISO off-loaded, or curtailed, roughly 37% more available renewable energy than in all of 2018, according to an S&P Global Market Intelligence analysis of grid operator data.

To balance supply and demand, the independent system operator eliminates excess wholesale wind and solar generation, especially in the middle of the day as low electricity consumption coincides with peaking solar production, mainly from photovoltaic, or PV, power plants. The curtailments happen primarily through bids from generators to reduce production. In extreme cases, the grid operator will intervene and order plant operators to cut back power. The oversupplies also trigger negative prices, when generators pay distributors to take their output.

The ISO curtailed 630,864 MWh of wind and solar generation in 2019 through May, according to grid operator data, compared with 287,057 MWh in the first five months of 2018 and 461,054 MWh in all of 2018. In May alone, 223,195 MWh of wind and solar energy went to waste, topping previous monthly records set in March and April.

"Sometimes curtailments get ahead of where the markets are," said Paul Denholm, principal energy analyst at the U.S. Department of Energy's National Renewable Energy Laboratory.

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Problem is outpacing solutions

Although curtailments accounted for only about 2.5% of total available renewable generation through May, California's lost wind and solar energy so far in 2019 is more than what many renewable power plants produce in an entire year. Exelon Corp.'s 241.5-MW Antelope Valley Solar Ranch One in Los Angeles County, for instance, netted 606,235 MWh of generation in 2018, according to S&P Global Market Intelligence data.

Curtailments are rising despite an expanding Western Energy Imbalance Market that enables CAISO to export some of its excess renewables, growing demand for battery storage arrays to save otherwise idled electrons for later use, and the state encouraging electric vehicle drivers to charge on clean, midday oversupplies.

The wind and solar reductions, however, have not stopped renewable resources from increasing their overall share of California's power mix.

Through May, utility-scale renewable generation on the CAISO grid, not including hydropower from large dams, totaled 24,154,510 MWh, up slightly from a year ago. After accounting for an estimated 34% of the state's retail electric sales in 2018, California's renewables already have surpassed the state's 33%-by-2020 goal and appear poised to hit the state's 60% target by 2030, if not before.

Renewable energy served a record 78% of demand on the ISO system at 12:40 p.m. on April 20, besting a previous high of 73.9% in May 2018, according to the grid operator. Several solar records have also fallen since March 2019, the latest of which occurred slightly before noon on June 1 as solar peaked at 11,363 MW.

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'Paradigm shift in thinking'

With California's curtailments clearly not going away, more regional collaboration, midday EV charging and accelerated energy storage installations can help, Denholm said, calling storage "the biggest hammer in the toolbox." In addition to those measures, "a paradigm shift in thinking of [renewable energy] as a dispatchable resource" is needed.

Like conventional generators, renewables can ramp up and down as part of normal grid operations. "We've been doing that for 100 years," Denholm said. But "throwing away free clean energy" should be avoided if at all possible.

David Olsen, chair of CAISO's governing board, agrees that a big rethink is required. But to make the state's renewables dispatchable, the California Public Utilities Commission must encourage "new kinds of [power purchase agreements] that allow clean resources to be compensated for providing all of the operational capabilities essential for operating the grid," including essential reliability services now provided primarily by natural gas and large hydro, Olsen said in an interview.

Current renewable energy contracts, in contrast, reflect a "simplistic approach that looks mainly at levelized cost of energy," Olsen added, which has led to solar PV's domination of California's renewables mix. "But this ignores the facts that it has little or no capacity value, that other expensive resources are needed to meet the steep ramps that PV imposes on the system at sundown, and that increasing amounts of it have to be curtailed," Olsen said. "Overreliance on PV doesn't make economic sense. And from a grid operational point of view, it's irresponsible."

Instead, California should invite contracts that reward a more diverse portfolio of renewable generation, plus energy storage, for "the full spectrum of power system capabilities," Olsen said. "If we paid clean resources to provide power services instead of just energy, we wouldn't have to curtail renewables as much, because we would use them not [only] to provide energy, but to supply the grid capabilities that gas now provides."