When Thomas Edison flipped the switch on his coal-fired central power station in Manhattan back in 1882, its function was simple: move power in one direction, from the generator to the consumer. There was little diversity in this system and no regard for source energy efficiency or environmental consequence, save that machines could run and the night was illuminated. Little changed over the following century.
Function, it can be said, is the combination of operation and intent. Beginning in 2002, the California Renewables Portfolio Standard (RPS) made a significant change in the function of energy production, transmission, distribution and consumption when it mandated that investor-owner utilities, electric service providers and community choice aggregators must increase procurement from eligible renewable energy resources to 33 percent of total procurement by 2020 and 50 percent by 2030.
Having to integrate renewables such as solar and wind, with their inherent variability, into a system that hasn’t changed much since the Edison days has become a crucible for load balancing innovation, distribution efficiency and market design. And the form that “ever follows” is already beginning to shape a future of expanded opportunity in the energy market as it drives diversification, flexibility, profits and lower consumer prices.
The California Independent Systems Operator (CAISO), a nonprofit benefit corporation, is charged with maintaining the constant and reliable flow of electricity in 80 percent of the state. Put another way, CAISO must continually balance the supply and demand of a product that is produced, delivered and consumed at the speed of light in the most populated and third largest state in the U.S. Reliability and prediction are crucial.
CAISO resource mix currently includes 22 percent renewables, out of which 72 percent is wind and solar (41.5 percent and 31.1 percent, respectively). CAISO spokesperson Steven Greenlee notes that these resources are not without their challenges.
“Managing congestion is an issue, as renewable resources are often located away from load centers and need transmission capacity to serve the local area. Another challenge is dealing with variability that renewables pose, especially wind," he said. “We have seen hundreds of megawatts of renewables output suddenly drop within 30 minutes when the wind stops blowing or clouds cover a solar field. This means we have to fill the gap with other resources that include natural gas. Even with these challenges, we are meeting goals and have interconnected over 16,000MW of renewables.”
In California, the utilities procure the energy, and so far they are on track to meet RPS standards. Collectively they served 22.7 percent of their 2013 retail electricity sales with renewable power. As power needs of communities grow more localized, distributed generation has given rise to microgrid architecture and a higher-performance, sustainable power system.
A microgrid – a local group of electricity generators and consumers – can operate with and also parallel the bulk grid, and has the capability to balance generation and demand within its boundaries. As utilities accept a new role as integrators and optimizers of these microgrids, they will likely form a greater dependence upon them to improve grid resiliency, avoid outages and establish a price-responsive grid that leverages services to the ratepayer’s advantage.
The mitigating steps CAISO must take to rebalance supply and demand include first going to the market and asking generators for bids to reduce their generation. If that doesn’t handle it, they then try to find other balancing areas to buy the energy. If these market steps do not cure the situation, they are forced to dispatch units to the minimum operating level or even to completely stop generating and disconnect from the grid – something CAISO wants to avoid.
Nonflexible resources create overgeneration conditions and potential for RPS curtailment. Reliability depends on having resources capable of following the net load curve.
CAISO is asking generators, load-serving entities, stakeholders and the energy agencies to help them solve this problem. Possible solutions include increasing storage and demand response, retrofitting existing power plants to be more flexible and deepening regional coordination.
In late 2014, neighboring Balancing Authorities (BAs) partnered with CAISO and PacifiCorp to launch a real-time energy imbalance market (EIM), the first of its kind in the West. Driven by the demand for greater sustainable energy resources and the need to facilitate their integration, this EIM leveraged CAISO’s proven state-of-the-art technology and market platform, and currently covers six western states including California, Oregon, Washington, Utah, Idaho and Wyoming.
CAISO VP of Technology Petar Ristanovic noted that “the innovation and ability to merge highly sophisticated systems is an amazing feat. I am very proud of what we have jointly accomplished in launching the EIM.”
According to an announcement from PacifiCorp, an Energy + Environment Economics study released by PacifiCorp-CAISO in March 2013 noted potential savings to consumers of EIM market participants of $21 million to $129 million per year with minimal annual costs. Using CAISO’s sophisticated system to automatically balance demand in the West every five minutes with the lowest-cost energy available, savings are expected to increase as other entities in the West join in. Utilities will be able to reduce their costly energy reserves as they can draw upon resources across the West, something not available without the EIM.
The engineering of our environmental impact through sustainable resources will continue to open doors on new opportunities, and technology will continue to optimize the balance between system reliability, renewables and reasonable costs. The form of our energy infrastructure is changing because we are redefining the function of energy use – where we draw it from and how it benefits us.
We’ve come a long way from Edison’s Pearl Street Station, and meeting the mandates for renewable generation by 2020 and 2030 is just the beginning.
