On 14 days during March, Arizona utilities got a gift from California: free solar power.
Well, actually better than free. California produced so much solar power on those days that it paid Arizona to take excess electricity its residents weren’t using to avoid overloading its own power lines.
It happened on eight days in January and nine in February as well. All told, those transactions helped save Arizona electricity customers millions of dollars this year, though grid operators declined to say exactly how much. And California also has paid other states to take power.
The number of days that California dumped its unused solar electricity would have been even higher if the state hadn’t ordered some solar plants to reduce production — even as natural gas power plants, which contribute to greenhouse gas emissions, continued generating electricity.
Solar and wind power production was curtailed a relatively small amount — about 3% in the first quarter of 2017 — but that''s more than double the same period last year. And the surge in solar power could push the number even higher in the future.
Why doesn’t California, a champion of renewable energy, use all the solar power it can generate?
The answer, in part, is that the state has achieved dramatic success in increasing renewable energy production in recent years. But it also reflects sharp conflicts among major energy players in the state over the best way to weave these new electricity sources into a system still dominated by fossil-fuel-generated power.
No single entity is in charge of energy policy in California. This has led to a two-track approach that has created an ever-increasing glut of power and is proving costly for electricity users. Rates have risen faster here than in the rest of the U.S., and Californians now pay about 50% more than the national average.
Perhaps the most glaring example: The California Legislature has mandated that one-half of the state’s electricity come from renewable sources by 2030; today it’s about one-fourth. That goal once was considered wildly optimistic. But solar panels have become much more efficient and less expensive. So solar power is now often the same price or cheaper than most other types of electricity, and production has soared so much that the target now looks laughably easy to achieve.
At the same time, however, state regulators — who act independently of the Legislature — until recently have continued to greenlight utility company proposals to build more natural gas power plants.
These conflicting energy agendas have frustrated state Senate Leader Kevin de Leon (D-Los Angeles), who opposes more fossil fuel plants. He has introduced legislation that would require the state to meet its goal of 50% of its electricity from renewable sources five years earlier, by 2025. Even more ambitiously, he recently proposed legislation to require 100% of the state’s power to come from renewable energy sources by 2045.
“I want to make sure we don’t have two different pathways,” de Leon said. Expanding clean energy production and also building natural gas plants, he added, is “a bad investment.”
Environmental groups are even more critical. They contend that building more fossil fuel plants at the same time that solar production is being curtailed shows that utilities — with the support of regulators — are putting higher profits ahead of reducing greenhouse gas emissions.
“California and others have just been getting it wrong,” said Leia Guccione, an expert in renewable energy at the Rocky Mountain Institute in Colorado, a clean power advocate. “The way [utilities] earn revenue is building stuff. When they see a need, they are perversely [incentivized] to come up with a solution like a gas plant.”
Regulators and utility officials dispute this view. They assert that the transition from fossil fuel power to renewable energy is complicated and that overlap is unavoidable.
They note that electricity demand fluctuates — it is higher in summer in California, because of air conditioning, and lower in the winter — so some production capacity inevitably will be underused in the winter. Moreover, the solar power supply fluctuates as well. It peaks at midday, when the sunlight is strongest. Even then it isn’t totally reliable.
Because no one can be sure when clouds might block sunshine during the day, fossil fuel electricity is needed to fill the gaps. Utility officials note that solar production is often cut back first because starting and stopping natural gas plants is costlier and more difficult than shutting down solar panels.
Eventually, unnecessary redundancy of electricity from renewables and fossil fuel will disappear, regulators, utilities and operators of the electric grid say.
“The gas-fired generation overall will show decline,” said Neil Millar, executive director of infrastructure at CAISO, the California Independent System Operator, which runs the electric grid and shares responsibility for preventing blackouts and brownouts. “Right now, as the new generation is coming online and the older generation hasn’t left yet, there is a bit of overlap.”
Utility critics acknowledge these complexities. But they counter that utilities and regulators have been slow to grasp how rapidly technology is transforming the business. A building slowdown is long overdue, they argue.
Despite a growing glut of power, however, authorities only recently agreed to put on hold proposals for some of the new natural gas power plants that utilities want to build to reconsider whether they are needed.
A key question in the debate is when California will be able to rely on renewable power for most or all of its needs and safely phase out fossil fuel plants, which regulators are studying.
The answer depends in large part on how fast battery storage improves, so it is cheaper and can store power closer to customers for use when the sun isn’t shining. Solar proponents say the technology is advancing rapidly, making reliance on renewables possible far sooner than previously predicted, perhaps two decades or even less from now — which means little need for new power plants with a life span of 30 to 40 years.
Calibrating this correctly is crucial to controlling electricity costs.
“It’s not the renewables that’s the problem. It’s the state’s renewable policy that’s the problem,” said Gary Ackerman, president of the Western Power Trading Forum, an association of independent power producers. “We’re curtailing renewable energy in the summertime months. In the spring, we have to give people money to take it off our hands.”
Not long ago, solar was barely a rounding error for California’s energy producers.
In 2010, power plants in the state generated just over 15% of their electricity production from renewable sources. But that was mostly wind and geothermal power, with only a scant 0.5% from solar. Now that overall amount has grown to 27%, with solar power accounting for 10%, or most of the increase. The solar figure doesn’t include the hundreds of thousands of rooftop solar systems that produce an additional 4 percentage points, a share that is ever growing.
Behind the rapid expansion of solar power: its plummeting price, which makes it highly competitive with other electricity sources. In part that stems from subsidies, but much of the decline comes from the sharp drop in the cost of making solar panels and their increased efficiency in converting sunlight into electricity.
The average cost of solar power for residential, commercial and utility-scale projects declined 73% between 2010 and 2016. Solar electricity now costs 5 to 6 cents per kilowatt-hour — the amount needed to light a 100-watt bulb for 10 hours — to produce, or about the same as electricity produced by a natural gas plant and half the cost of a nuclear facility, according to the U.S. Energy Information Administration.
Fly over the Carrizo Plain in California’s Central Valley near San Luis Obispo and you’ll see that what was once barren land is now a sprawling solar farm, with panels covering more than seven square miles — one of the world’s largest clean-energy projects. When the sun shines over the Topaz Solar Farm, the shimmering panels produce enough electricity to power all of the residential homes in a city the size of Long Beach, population 475,000.
Other large-scale solar operations blanket swaths of the Mojave Desert, which has increasingly become a sun-soaking energy hub. The Beacon solar project covers nearly two square miles and the Ivanpah plant covers about five and a half square miles.
The state’s three big shareholder-owned utilities now count themselves among the biggest solar power producers. Southern California Edison produces or buys more than 7% of its electricity from solar generators, Pacific Gas & Electric 13% and San Diego Gas & Electric 22%.
Similarly, fly over any sizable city and you’ll see warehouses, businesses and parking lots with rooftop solar installations, and many homes as well.
With a glut of solar power at times, CAISO has two main options to avoid a system overload: order some solar and wind farms to temporarily halt operations or divert the excess power to other states.
That’s because too much electricity can overload the transmission system and result in power outages, just as too little can. Complicating matters is that even when CAISO requires large-scale solar plants to shut off panels, it can’t control solar rooftop installations that are churning out electricity.
In 2015, solar and wind production were curtailed about 15% of the time on average during a 24-hour period. That rose to 21% in 2016 and 31% in the first few months of this year. The surge in solar production accounts for most of this, though heavy rainfall has increased hydroelectric power production in the state this year, adding to the surplus of renewables.
Even when solar production is curtailed, the state can produce more than it uses, because it is difficult to calibrate supply and demand precisely. As more homeowners install rooftop solar, for example, their panels can send more electricity to the grid than anticipated on some days, while the state’s overall power usage might fall below what was expected.
This means that CAISO increasingly has excess solar and wind power it can send to Arizona, Nevada and other states.
When those states need more electricity than they are producing, they pay California for the power. But California has excess power on a growing number of days when neighboring states don’t need it, so California has to pay them to take it. CAISO calls that “negative pricing.”
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