Low-Carbon Grid

CEERT’s Low-Carbon Grid Program promotes the integration of large amounts of renewable energy on the grid by tracking and intervening in crucial proceedings at the California Independent System Operator (CAISO) and other agencies. We also seek to foster joint operating agreements between the CAISO and the state’s municipal and investor-owned utilities, and promote coordination and consolidation of the Balancing Areas in our state and region as a low-cost means of integrating renewable power. The issues are often highly technical, but have enormous impact on the price of renewable energy projects and their access to the transmission and distribution system.

Recent Developments:

Western Grid Expansion and Modernization

Discussions have continued on integrating the California Independent System Operator (CAISO) and PacifiCorp transmission systems to form a Regional System Operator (RSO).  The passage of Senator De León’s Senate Bill (SB) 350 directed the CAISO to carry out various studies and develop a governance proposal for a Western RSO.  For such regional integration to occur, the legislature must pass a bill repealing the state’s right to appoint the CAISO’s Board of Governors.

CEERT has participated in a wide variety of meetings and discussions with agencies, stakeholders, and legislative staff.  The studies and governance proposal have been generally perceived as positive and productive, but many parties have been hesitant due to the speed with which developments have unfolded.  While there was potential for a push in August to pass legislation changing the CAISO’s governance, CEERT has worked with others to ensure a thoughtful process that maintains momentum and does not jeopardize the expansion to an RSO.  To this end, the Governor has announced that work on regional grid integration will continue through the fall, with legislation introduced in January.

The SB 350 studies, conducted by the Brattle Group with several other reputable consulting firms, analyzed integration’s potential impacts, costs and benefits to California ratepayers, effects on greenhouse gas (GHG) emissions, economic impacts, and effects on disadvantaged communities.  Preliminary results were presented at a workshop May 24 and 25.  Results showed significant benefits to California rate-payers, decreases in GHG emissions, increased jobs, and increased reliability for the 2030 (essentially) WECC-wide case.  The 2020 PacifiCorp-CAISO-only case showed a small increase in economic benefits and a slight increase in GHG emissions, the significance of which has been debated.

CEERT, Union of Concerned Scientists (UCS), and Environmental Defense Fund (EDF) submitted comments asking for a 2030 PacifiCorp-CAISO case, further analysis on the increase in coal dispatch, and sensitivities around the hurdle rate assumptions.

On June 9 the CAISO released the first draft of a Governance Proposal, after which the California Energy Commission (CEC) held workshops on June 16 (in Sacramento) and June 20 (in Denver).  Highlights of the draft Proposal included GHG tracking, a transitional committee, a transitional board, and a states’ committee with weighted voting and primary authority over resource adequacy and transmission access charges.  Following comments, the CAISO released a revised Governance Proposal on July 15 that included the elimination of GHG tracking (as it is not strictly “governance”), a shortening of the transitional period, elimination of a transitional board, and details on the composition of the transitional committee.

On July 28, the CEC hosted a Joint Agency Workshop with the California Public Utilities Commission (CPUC) and California Air Resources Board (CARB) on the regionalization of the CAISO.  The CAISO and its consultants presented the results of the SB 350 studies and the revised Governance Proposal.  Overall, there seemed to be consensus that the studies were valid, with several stakeholders delivering outspoken comments about regionalization generally and about the rush to complete the studies.

Although stakeholders generally found revisions to the governance proposal to be positive, many parties expressed discomfort at the removal of GHG tracking and the number of issues left to the transitional committee, including the form of the new stakeholder process.  CEERT, EDF, and UCS filed comments on the importance of a GHG tracking system as well as the need to ensure a meaningful stakeholders’ voice at the RSO.

CEERT has continued to take part in meetings that Sue Kateley of the Assembly Utilities and Commerce Committee has convened with key stakeholders, agencies, staff of the Senate and Assembly leadership, and the Governor’s office to discuss key issues and potential resolutions, identify gaps in knowledge and understanding, narrow differences, and pinpoint potential areas of agreement and compromise.  CEERT Executive Director V. John White and Director of Grid Policy Liz Anthony have actively participated.

CEERT has been working with a group of renewable industry representatives, NGO leaders, and key funders on a campaign called “Fix the Grid” that is carrying out analysis, education, outreach, coordination, and political strategy with advocates, allies, and key stakeholders.  An independent steering committee led by Roby Roberts is providing governance.  The project’s managing director, Don Furman, has extensive Western transmission grid experience and expertise.

The goal of the project is to ensure that Western grid expansion and modernization puts in place the key elements needed to enable California and the West to achieve our 2030 and 2050 GHG reduction targets. Fix the Grid has been engaging with key media and stakeholders throughout the West as a balanced voice on grid expansion.  The project is expected to run through 2017, working to ensure that a robust and productive process continues this fall to bring about consensus on the grid of the future.

Grid Modernization

CEERT has continued our work to modernize the grid, leveraging the analysis of the Low Carbon Grid Study (LCGS) and its subsequent follow-on projects.

While CEERT itself was not party to the negotiations or the settlement agreement PG&E announced in withdrawing its application for a renewed license to operate the Diablo Canyon nuclear plant, Friends of the Earth (FOE) asked our Executive Director V. John White to consult on the technical feasibility and economics of replacing Diablo’s output with renewable energy.  With technical consultant Jim Caldwell and energy economics consultant Bill Marcus of JBS Energy, V. John White Associates provided expertise to FOE on zero-carbon replacement portfolios for Diablo, using the LCGS as a basis in comparing those scenarios with the plant’s expected operating costs. That work can now be found on the LCGS website, and contributed a high level of confidence to the environmental parties’ stance in the negotiations.

The National Renewable Energy Laboratory LCGS team was asked to present results of the LCGS Phase II study at the CPUC’s June 14 Integrated Resource Planning workshop.  Unfortunately, the team was unable to attend that day due to scheduling conflicts.

On June 19, we briefed the CAISO Board of Governors on the results of LCGS follow-on reports about regional wind and geothermal in order to illustrate the benefits of a diverse portfolio.  The presentation was well received, although much of the conversation diverted to implications for CAISO regionalization.

Low-Carbon Grid Study (LCGS)

Phase II of the Low Carbon Grid Study has been completed, all results have been posted on the website, and the books have been closed to any new expenses to be covered by the project Steering Committee.

We have conducted a series of briefings on the LCGS results to various advocate groups and state agencies. Meetings in early May include a second briefing for the CPUC Energy Division and a briefing for the Public Utilities Commission of Nevada. We have not officially filed results or summaries in any California regulatory proceeding; however, as a result of the briefings to date and traffic on the website, the study itself has been specifically mentioned for incorporation in Track II of the upcoming CPUC integrated Resource Planning (IRP) proceeding and the RETI 2.0 planning process that the Natural Resources Agency is conducting.

Since the closeout of Phase II, we have conducted additional sensitivity modeling and written reports on three additional topics related to the Phase II results. These three reports use the LCGS Phase II data bases as a starting point, but have been sponsored by separate interest groups without using any incremental Steering Committee money or participation.

The first of these reports, “The Value of Salton Sea Geothermal Development in California’s Carbon Constrained Future,” was sponsored by the Walton Family Foundation and used to demonstrate the cost-effectiveness of a diverse portfolio including baseload geothermal to comply with a 50% RPS requirement. This report has been posted on the LCGS website.

The second report, “SWIP North Economic Benefits,” was sponsored by Great Basin Transmission, LLC (LS Power), which is the developer of the Southwest Intertie Project North transmission line connecting Idaho and Nevada that was used in Phase II of the LCGS to provide a new link to deliver Wyoming wind energy to California. The report isolates the benefits of this transmission line in a future WECC scenario with significant renewable resource development. This report has also been posted on the LCGS website.

The third report, “The Value of Regional Wind Energy in California’s Carbon Constrained Future,” was sponsored by the American Wind Energy Association and several of its member companies to isolate and quantify the benefits of Wyoming and New Mexico wind in a 50% California RPS. This report is in final draft and will be posted on the LCGS website soon.

Discussions with the Governor’s Office

V. John White met with senior Governor’s Office staff to discuss implementation of SB 350 at the CPUC and CARB, integrated resource planning, a balanced renewable portfolio, large-scale storage, the zero-GHG replacement strategy for Diablo Canyon, and the need for transparent real-time GHG accounting to accompany regional grid expansion as essential elements in any strategy to achieve 2030 climate targets.