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Grid operator chief predicts California will have carbon-free grid

Q2: U.S. Solar and Wind Power by the Numbers

Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

Rate case activity slips, COVID-19 proceedings remain at the forefront in August


Grid operator chief predicts California will have carbon-free grid

Steve Berberich, chief executive of the California ISO, says the nation's largest state economy will completely decarbonize its power grid despite the recent failure of a legislative proposal that would have set a 100% zero-carbon target by 2045, along with accelerating the state's renewable portfolio standard to 60% by 2030.

He just is not sure relying solely on renewables eligible for meeting state mandates will do the trick.

"Largely, the policy discussion is around going to 100% renewables. I don't know if that is necessarily a completely carbon-free grid. In fact, I think we should be focused on the latter, using the former as a tool to get there," Berberich said Oct. 18 in an interview at the ISO's annual stakeholder symposium in Sacramento, Calif. "Our big challenge right now is the net peak, and that peak is after solar comes off the system and we have to rely on natural gas. So what we are going to do to manage that net peak? And what are we going to do overnight?"

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California ISO CEO Steve Berberich speaks Oct. 18 at the grid operator's annual symposium in Sacramento.

Source: Garrett Hering/S&P Global Market Intelligence

The solution, Berberich believes, is to "connect the dots" by tapping the collective power of in-state renewable energy, energy storage, energy efficiency, electric vehicles, demand response and price signals, and greater collaboration among grid operators across the West. That could include, for instance, importing Wyoming wind power and more Northwest hydroelectricity when supplies are scarce, and exporting California solar when it has too much to use itself. "You cannot do this reliably, cost-effectively and with effective greenhouse gas reduction unless you do this regionally," the CEO said. "We have to diversify our renewable portfolio both from a source and from a region ... I think California can actually be a major exporter of clean energy if it does this right."

Like the state's 100% zero-carbon energy bill, however, a measure that would have advanced the ISO's transformation into a regional grid operator for the western United States stumbled in the final week of legislature. Berberich is undaunted: "It's not a matter of 'if;' it's a matter of 'when,'" he predicted. Both bills could return in 2018, the second half of the California Legislature's two-year session.

Regional cooperation already is paying off through the ISO's real-time energy imbalance market, Berberich noted. The market — which includes Berkshire Hathaway Energy subsidiaries PacifiCorp and NV Energy Inc., Puget Sound Energy Inc., Portland General Electric Co. and Pinnacle West Capital Corp.'s Arizona Public Service Co. — has generated $255 million in benefits since launching in 2014, according to the ISO's latest market report. Energy transfers between the members have avoided the curtailment of 502,357 MWh of renewable energy, not including Portland General, which joined Oct. 1.

'Renewables dividend' vs. 'duck chart'

By fully integrating individual grids across the West into real-time and day-ahead wholesale markets, the ISO hopes to address the operational challenges associated with its growing oversupply of midday power, which has coincided with more frequent negative prices and curtailments of solar, followed by steep, three-hour daily ramps of gas-fired generation to meet peak demand. While the grid operator has depicted the challenges in its famous "duck chart," Berberich and other ISO officials say it is time to refocus on reaping the rewards of California's "renewables dividend" by maximizing the value of its in-state renewable energy resources, totaling roughly 27,500 MW.

"We talk a lot about the operational challenges, the oversupply, the steep ramp. Let's have a little different conversation," Berberich said. "Look, we are going to have a lot of extra supply at zero marginal cost, and zero carbon. Surely, that's a good thing."

At times the ISO has seen an oversupply of roughly 2,000 MW. "That's not a challenge, that's a dividend," added Mark Rothleder, the ISO's vice president of market quality and renewable energy integration, in a panel discussion. As utilities advance toward their current state requirement of 50% renewable energy by 2030, "we're gonna see that number increase ... Now the question is: Can we leverage it and harness it for good? Can we share it with our neighbors?"

A "second dividend," Rothleder said, is making the most of California's distributed energy resources. "We need to find ways of leveraging the capability and the services out of these new resources if we're gonna be successful in this transformation. And I think we are starting to see the glimpse of that."

While such resources "are actually bidding in and providing downward flexibility," the ISO is looking for additional services, such as maintaining grid reliability, frequency response and voltage control, he said. "If we are successful in using these new resources in new ways, it will further the effort to decarbonize the grid and ultimately to leverage this new energy for other sectors."