CEC Chair Weisenmiller on the Transformation of California’s Clean Energy Market

Issue: 
Robert Weisenmiller

Pacific Gas & Electric’s recently announcement it would shut down the Diablo Canyon nuclear plant highlighted California’s rapidly shifting approach to the electric power grid. To California Energy Commission Chair Robert Weisenmiller, the decision was significant, but was just one of a multitude of tidal forces moving California towards a diverse, dynamic, and resilient renewable energy portfolio. In an exclusive interview with VX News, Weisenmiller explains the growth and importance of the regional Energy Imbalance Market, as well as the Energy Commission’s efforts to invest research dollars to advance community-scale microgrids and renewables.

VX News: Pacific Gas & Electric recently announced it would shut down Diablo Canyon when licenses for its two reactors expire in 2024-25, and that it would replace the power with low-cost, zero-carbon energy sources. One negotiator said, “The age of renewables has arrived.” What is the significance of that decision?

Robert Weisenmiller: PG&E’s announcement is significant on  many grounds. One is the scope of the agreeing parties. Given the variety of stakeholders we have in California, it’s refreshing to see all those perspectives come together in agreement on a complicated issue.

This agreement shows that the utilities are joining us in thinking how to enable greater use of renewables within the grid. We have to start thinking in terms of a 21st Century electricity grid—not a 20th Century grid. Having said that, one of the things that I think made the agreement possible was that today, wind and solar are really best buys. In Mexico’s recent renewable solicitation, the median price was around $40.50 per megawatt hour (MWh). Dubai just had a photovoltaic solicitation where the winner was $29 per MWh for a 800 megawatt (MW) project. Of course, Dubai and Mexico are pretty sunny. But nonetheless, those numbers are a real game-changer. Reductions in the costs of PV solar, wind, energy storage, and LEDs are also opening up new opportunities. All of this paved the way for the Diablo Canyon settlement.

VX News: The Energy Commission has focused much attention on energy storage. What progress has been made, and how do advancements in storage practically relate to the improving the stability of the grid.

Robert Weisenmiller: Storage is one of the holy grails for the power system.  With electricity, everything is very fast. You can balance loads and resources. Not having storage really affects how we size the grid, among other things. We’ve already had some degree of success with energy storage. For almost a century, we’ve already had some degree of storage built into our hydro systems. The real interest now is in battery or flywheel technology. Under the American Recovery and Reinvestment Act program, the Energy Commission put up matched funds to bring storage projects to California. We got about a dozen—primarily research projects to figure out what it would take for flow batteries or flywheels to become viable projects here. It will be exciting when we move from scientific experiments to fieldwork, and start to scale up over time. Recently, former CPUC President Susan Kennedy’s new Advanced Microgrid Solutions endeavor reached an agreement to bring comprehensive energy solutions to the California State University campuses through storage and microgrids. 

This is proving that we are breaking out of our silos. Oftentimes we tend to think in silos: this is solar’s box, this is storage, and this is distributed generation. Susan and her team is combining all these technologies into one solution—doing demand response with storage batteries backing it up, and putting energy efficiency behind the meter as well. It’s really exciting to see that sort of systematic approach, and the transition from research to practical application.

VX News: VerdeXchange has hosted for the last three years VX panels on the promise of Western States Energy Imbalance Market (EIM) initiatives. What benefits/ progress, if any, have been achieved? 

Robert Weisenmiller: The Energy Imbalance Market (EIM) is starting to take root and transform the energy market. It started out with PacifiCorp in the first year of the rollout. That found real benefits, both in terms of dollars and greenhouse gas savings. At the same time, frankly, there were transmission limitations—there were issues. Overall it was a good start, but there were kinks to be worked out on the software side. Now, at this stage, the energy imbalance market is really sweeping the West. PacifiCorp approached to join the California Independent System Operator and is helping to evolve EIM into a regional force. 

The difference between EIM and PacifiCorp joining in the ISO is like EIM on steroids. One of the secrets to maximize the integration of renewables is to get the shorter and shorter dispatch period, so fifteen minutes or five minutes instead of an hour. You can’t really afford to wait for wind production or solar production very well for an hour, and even for fifteen minutes or five minutes, it’s going to be a lot closer, but you might have an imbalance. You might produce more or less than you thought you were going to. The ISO has had periods of time, in an hour, where wind production goes up by 1,000 megawatts, or solar goes up and down by more than that if you have monsoonal cloud patterns. 

The Energy Imbalance Market helps you deal with those short-term variations, especially as you have more renewables on the grid. What can happen is that people can basically rely upon swapping renewables back and forth. If you think about the arc of the sun, California’s solar power is mostly north-south. If we had east-west solar, we would have it for a longer period of time. Similarly, if you think about our wind production, again, most of it is through our costal passages, so it’s pretty similar in terms of its production. But if you connect into Wyoming or other locations, you’ve got more reliable wind capacity. So, there are a lot of opportunities.

At this stage, I’ve had a couple of workshops where we’ve looked at the issue of governance, and so I’ve had long workshops in Sacramento for people to raise their concerns on governance. The California Independent System Operator has a proposal out now. I had one workshop in Sacramento and one in Denver again for people to start discussing.  Last fall, Nevada Energy joined. Given their great solar potential and locations, that addition substantially cranked up the savings in terms of both dollars and greenhouse gas emissions. Seattle City Light, Idaho, and the LADWP have announced they’re joining. 

This fall, we’re looking forward to Portland and APUS joining. Every day, we see the EIM’s momentum pick up. It’s becoming a true success. In May, the California ISO indicated that the benefits for the first three months of 2016 were $18.9 million with the Nevada addition, and the total benefit so far is $64.6 million. As we get more and more participants throughout the West, these benefit numbers will snowball.

The benefits are projected to be pretty impressive, over $1 billion in 10 years. That’s a huge initiative, along with all the rest of implementing SB 350 and AB 802. EIM is one of the really good opportunities for the state.

VX News: Turning now to Aliso Canyon what’s the Energy Commission’s take on the role of natural gas and need for storage facilities in California’s energy portfolio?

Robert Weisenmiller: The answer, in part, is that gas storage is going to help drive a change in the gas system. The Aliso storage field was designed in the 1970s to make sure residential and small commercial customers had reliable gas supplies for space and water heating no matter how cold it got. In fact, it was designed to hold enough gas to meet the needs of a one-in-35-year cold month. The thinking behind this is that fundamentally, we never want to have to curtail gas service.

If you curtail power service, you can just reset it and it’ll come back on. But to turn the gas back on, you have to go out and relight every individual pilot light in every house on every block of LA. We don’t even want to think about getting into that situation, and the storage system was designed to help us avoid it. But it was also designed in an era when power plants did not rely on gas; they burned oil. Today, more than 40 years later, they burn gas. As a result, Aliso Canyon is now critical, not only in the winter for residential use, but also in the summer to deal with the hourly variation in power plant loads. When we studied Aliso Canyon after the leak, we found that it is used every single month of the year.

When the problems at Aliso first came up, the Brown administration decided we needed to create a comprehensive plan that would emphasize safety and reliability. Our action plan’s top priority is energy efficiency, as well as more coordination. That being said, I am impressed at the level of coordination among Cal ISO, LADWP, and SoCalGas. They’ve developed very strong working relationships to maximize our ability to move power into the Los Angeles basin and stabilize the system.  We made it through that test. But the National Weather Forecasting Service expects a very hot summer in our part of the country, and it’s going to take a lot more coordination to get through it. We issued a flex alert June 19 to cover the basics: turning off the light, turning off the thermostat, not using heavy appliances, etc. We’re planning to issue more between now and the winter; at that point, we’ll switch from saving power to saving gas.

VX News: The Energy Commission’s Research and Development Division has been taking active steps to fund efforts to install community-scale renewables and microgrid infrastructure that utilize storage, including a number of projects involving the military. Share what the Research Division has studied, and what local jurisdictions may achieve in the next few years by installing  advanced energy systems.

Robert Weisenmiller: The Energy Commission has great partnerships on microgrids, especially with California universities and the Navy, that are helping us convert science experiments to real-world, operating projects. If you’ve got a complicated energy system, particularly one with a very high reliability need—like a campus or a military base—and you’ve got a combination of energy sources you want to knit it together, then you need a microgrid to essentially create a mini-utility.

At this stage, as Assistant Secretary of the Navy Dennis McGinn and I like to joke, if you asked six engineers what a microgrid was, you’d probably get 12 definitions. But you need to standardize to drive the cost down. 

The CEC is working on a Microgrid Roadmap to help with that standardization. We worked a lot with UC San Diego on developing their microgrid, as well as UCLA, in Humboldt County, and the Santa Rita Jail in Alameda County.  Now, we have the Advanced Energy Communities, which is funding a number of projects throughout the state and helping them address the permitting and planning aspects of microgrids.  Many of the awards that went to these advanced energy communities are located in disadvantaged communities, and we’ve been working to reach out to disadvantaged communities. Last year we adopted a diversity policy, and are actively trying to make sure that all of our citizens can participate in the programs in some fashion. 

VX News: Lastly, following the Paris Climate Accord, the US Secretary of Energy chose California to host the Clean Energy Ministerial. Address the significance of hosting that event in California, and the success of subnational efforts in North America that build upon what the CEC has spearheaded.

Robert Weisenmiller: Last year, I represented the governor at the 2015 Clean Energy Ministerial in Mexico. It was an exciting opportunity to work with 40-50 other energy ministers on hammering out a few concrete initiatives. Coming out of that experience, we in the Brown administration spoke to the Secretary of Energy to suggest California as the host for the next event. In particular, in the Bay Area, we could showcase at an international level the innovative energy technologies coming out of our university system, Silicon Valley, and out of California’s broader cleantech ecosystem. We also realized that a lot of the actors would be the subnationals—mayors, governors, and regional leaders—so we set up the Subnational Clean Energy Ministerial or Sub-CEM. The two events had some degrees of overlap, but at the end we would all get back together later and talk about our respective conclusions.  Everyone came out of the event inspired to take the next steps toward a clean energy world.

More than 250 regional leaders participated in the activities, and we picked up additional signatories from India and Kenya to the Under 2 MOU, which has the goals of limiting warming to below 2 degrees Celsius and limiting greenhouse gas emissions to 2 tons per capita, or 80-95 percent below 1990 level by 2050. The Under 2 MOU now includes over 135 jurisdictions that comprise 783 million people and $21 trillion in GDP.  

 

“If you asked six engineers what a microgrid was, you’d probably get 12 definitions. But you need to standardize to drive the cost down. The Energy Commission is working on a Microgrid Roadmap to help with that standardization.” -Robert Weisenmiller, CA Energy Commission Chair

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