Following a June 4 workshop at the California Public Utilities Commission (CPUC), a former utility official with over 40 years of experience in energy policy confided his impressions of the workshop’s conclusions. For balance, GTM asked Mark Rothleder of the California Independent System Operator (ISO) Corporation, one of the workshop’s key presenters, for his perspective.
“The last big makeover we had in the West for electricity production was when the nuke building program got shut down in the 1970s,” the unnamed former utility official said. “Everybody turned to coal. From a grid perspective, that was a real challenge because these coal plants were out in the boonies [and] connected to the grid by long, skinny radials.”
It changed the grid, he said. “There were some mistakes made. There were blackouts [and] they had to do some fixes. They had to spend money to add reinforcement to the grid in certain places. They had to come up with new rules. Any time you dramatically change the resource base on the grid, you’re going to have to go through that exercise. You can plan for it and you can run models, but you’re going to get some surprises and you’re going to have to fix them. They did that in the '80s.”
Once again, he said, “people are going to have to change their minds about how they do things, [because] we’re very good at fixing the grid for these big old coal plants out on the end of the line and we’re not very good at dealing with wind and solar and variable resources that come on and go off with nature and as the sun rises and sets.”
“I am not familiar enough with the 1980 transition from nukes to coal,” Rothleder responded. “But I believe this is a more significant transition.” Nukes and coal, he said, “are similar base-loaded resources. The 33 percent transition is much different in that it is adding a significant amount of variable generation. Also, this transition is different in that we are also potentially retiring a significant amount of the existing once-through cooled resources.”
Perhaps the most important finding of the workshop, the unnamed official said, was that the changes will add up to the need for approximately 3,200 megawatts of “dispatchable, flexible generation [and] it needs to be on-line before we can retire these other things, by 2017. So we better get moving."
At the workshop, he said, the ISO presented “four separate scenarios for how you get to 33 percent” and they all showed, he contended, that generation capacity beyond the stipulated 3,200 megawatts will be unnecessary. Two further models, one which assumed 10 percent greater load growth by 2020 than is predicted by the California Energy Commission and one that assumed natural gas would replace renewables, suggested there could be the need for 1,200 additional megawatts.
The California grid can “handle the 33 percent,” the utility official explained, because “we weren’t stupid. We didn’t build all of one [type of] thing. A diverse portfolio,” he said, “is much better than all of one thing. And it is better than all gas.”
“But the point is, we’re not arguing about having to build a bunch of new stuff to integrate solar and wind,” he said. “We can do that and on a net-net basis, and retire at least 8,000 megawatts” of out-of-date gas generation capacity.
“The operational relevant scenario,” Rothleder responded, is “the high load scenario” in which “results indicate there is a strong potential need for residual capacity beyond the 3,200 megawatts of local resources.”
The “default assumption” about the 3,200 megawatts, the utility official said, “is that it is gas and it has to be flexible. It can’t be base-load gas. It has to be capable of starting up and shutting down on command. And it has to be in the right place.”
“There may be options for natural gas to consider,” Rothleder said.
“The bottom line is,” the utility official concluded, “there is no evidence that would support any net renewable resource integration cost.” The studies “don’t show the need for any new resources to balance the variable renewables” he said, adding, “net-net, there are significant system savings in both capital and operating costs to be subtracted from RPS costs.”
“I have not quantified the benefits and costs of renewables,” Rothleder responded.
People, the utility official explained, “have prejudices and biases against new things, and these guys especially. If you’re a transmission planner and there is a blackout on your watch, that is a career-defining moment. So you get really passionate about some of this stuff and you don’t like change.”
That the ISO called their results “counterintuitive,” the utility official said, is not surprising. “People postulate gloom and doom and then they run studies and the studies say ‘Relax, it’s OK.’ So they say, ‘The study must be wrong’ and get somebody to do another study.” But, he said, “they keep coming up with the fact that there are some lessons to be learned and stuff to do, but by and large, this is no big deal.”