Recurrent Energy CEO Arno Harris is thinking about getting the U.S. to 70 percent renewables by 2050. He believes getting there would mean establishing a new 51 percent renewables target in California and an expanding energy imbalance market across Western states.
“Cost is no longer a primary objection to renewables,” Harris told GTM in a sideline conversation at Senate Majority Leader Harry Reid’s (D-NV) National Clean Energy Summit. "The limitation now is the design of the grid and its capability to accommodate renewable generation.”
Recurrent Energy claims a 2-gigawatt solar project development pipeline in North America and Europe, with over 700 megawatts under contract.
The grid must be flexible in ramping to manage shifts of variable resources like solar and wind, Harris said, and it must have adequate demand response capability to allow system operators to control load as readily as they have in the past controlled generation. “If you do it right, the modeling suggests you can get to 70 percent or 80 percent renewables,” he said.
But creating a flexible grid can be a complicated problem and could take years to sort out.
“California has seen sudden changes over a ten-minute period as large as 800 megawatts or 1,200 megawatts,” Khaled Abdul-Rahman, the state system operator’s Director of Power System Technology Development, recently told GTM.
Because climate change makes getting to more renewables urgent, Harris disagrees with those who want to strengthen the grid and make it more flexible before expanding the Renewables Portfolio Standard.
California Independent System Operator CEO Stephen Berberich has acknowledged that Governor Brown’s 33 percent renewables by 2020 target was intended as a floor, not a ceiling.
“California needs to set a requirement for 51 percent renewables and move forward at a steady pace,” Harris said. “Berberich has said the ISO’s role is to figure out how to get there.”
There is another aspect of urgency, Harris said. “We are running out of RPS. The rate of procurement is slowing down. We are at risk, if we don’t move soon, of renewables development in California grinding to a halt.”
Harris noted that Berberich has been a strong advocate for the energy imbalance market (EIM) being developed between the ISO and PacificCorp. That EIM will create a voluntary but interconnecting marketplace covering California, much of the Pacific Northwest and part of the West.
California’s ISO operates the only advanced energy market in the Western Interconnect. Like much of the Northeast, Midwest and Canada, the ISO’s real-time, IT-optimized market automatically balances electricity deviations every five minutes by choosing the lowest-cost resources available.
The 39-plus other electricity delivery systems in the West, including PacifiCorp, manage deviations with manual dispatches and a system of reserves.
Collaborating with adjacent balancing areas to give the ISO access to less costly out-of-state renewables is one of his top five priorities, Berberich told GTM recently. And access to unused out-of-state conventional generation could help balance California’s variable renewables. Both options, he said, “could provide value to the ratepayer.”
“People may not get why a solar developer would care about EIMs,” Harris said. “An EIM is one of the important axes of flexibility. A more wide-reaching grid allows operators to draw on resources from different territories and move electricity fluidly from one to another. That opens markets to variable resources.”
Of the nation’s three interconnections, Harris said, the Western grid is the most fragmented. “The result is we don’t dispatch resources very efficiently. It’s done on a local basis.” A system in a small balancing area, he explained, is limited to its own resources while cleaner, less costly generation may be available nearby.
“That is a challenge for renewables and fundamentally not in the interest of ratepayers,” Harris said. “One analysis found that more efficient dispatch across the West would save $1.3 billion per year.”
With the recent purchase of NV Energy by the Warren Buffett-owned MidAmerican Energy, PacifiCorp’s parent, Harris said, there has been a lot of speculation that Nevada will join the California-PacifiCorp EIM, making those grids more flexible and efficient.
System operators tend to want to keep things the way they have been, Harris said. There has to be a compelling reason to change. “Once that market is going and the participants are benefiting from shared resources, PUCs and ratepayers in other regions are going to want to be part of it.”