How Does LADWP Plan to Reach 100 Percent Renewable Energy? with Arash Saidi, Manager of DER Development- [an Energy Central Power Perspectives™ Interview]
- Aug 26, 2021 1:57 am GMT
Los Angeles became the biggest city to commit to 100 percent renewable electricity in 2019. It is an aggressive plan, one that will require a considerable overhaul of the city's current power sources. The Los Angeles Department of Water and Power (LADWP) recently received an award from SEPA for demonstrating "industry leadership through unique innovation in an effort to significantly accelerate the transformation to a clean and modern energy system."
The public power company has already kickstarted many initiatives to achieve 100 percent renewable energy, as noted by Arash Saidi, Manager of Distributed Energy Resource Program development at LADWP. Below is an edited transcript of Energy Central's conversation with him.
LADWP wants 80% renewable energy and 97% carbon-free power by 2030. It also wants to become 100% carbon free by 2035. As of calendar year 2019, renewable energy constituted 34% of the overall mix and 51% of the total power generated at LADWP was free of carbon. At a broad level, can you outline the changes in your current energy system required to make this transition? What steps have you taken already to prepare yourself for the transition?
At a broad level, LADWP will need to accelerate to 80% renewable by 2030, accelerate the critical transmission projects, transform and decarbonize local generation, accelerate energy storage, deploying local solar, demand response, energy efficiency and EV chargers.
The L.A. City Council and the Board of Water and Power Commissioners has approved the Red Cloud Wind project located in New Mexico which will be the largest, highest capacity, and lowest cost wind farm in LADWP’s renewable energy portfolio. The project will boost LADWP’s renewable energy portfolio by six percent and provide 1,333,000 megawatt-hours of energy for LADWP customers each year, which will help save approximately 464,040 metric tons of carbon emissions annually.
LADWP also recently signed the Eland Solar + Storage Center to secure 400 MW of solar and 4-hour energy storage through a 25-year power purchase agreement. Once the project is complete, the project will provide 7% of LA’s annual electricity needs.
Additionally, the LA City Council approved a 300 MW expansion of the nation’s largest Feed-in Tariff program bringing the total program capacity to 450 MW. Los Angeles continues to lead the nation in local solar capacity for 6 of the past 7 years due in large part to our broad portfolio of local solar programs, including Feed-in Tariff, community solar programs, and utility-built solar projects. These are just a few of the examples of steps we have taken to ensure the 2030 goals and beyond are achieved.
Related to that question, do you think changes at the policy and regulatory level are required to reach this goal? If yes, what are they? Also, what changes might be required to the grid architecture to help achieve this goal?
Reaching 100% by 2035 will truly take a transformative investment in our power infrastructure. The LA100 study showed that under any pathway towards 100% carbon free, we will need to more that double the capacity of our existing system. We’ll need unprecedented buildout of transmission, distribution, solar, electric vehicles, and many other resources. One critical area will be ensuring transmission projects supporting this clean energy transformation are developed and built quickly, which may require policy or regulatory changes. We also think there is a significant opportunity for state and federal investments in long duration storage and green hydrogen technology, which we are optimistic will happen so we can see rapid technology development and cost declines.
An NREL 100 study for LADWP released earlier this year identified three possible futures - moderate energy efficiency, electrification, and demand flexibility, high energy efficiency, electrification, and demand flexibility, stress grid conditions - high electrification and low energy efficiency and demand flexibility - to achieve the goal of 100% renewable energy. Which one of these possible futures seems most feasible under the current circumstances and why?
The LA100 study looked at 9 different scenarios which include various load scenarios. Following the study, LADWP examined what the impacts to rates would be and found that rates would roughly track inflation if we see the successful growth in electric vehicles. Scenarios that include robust energy efficiency, building electrification and electric vehicle adoption will not only help ensure that this transformation is affordable, but will also include the successful decarbonization of the transportation sector.
Rotating blackouts have been a problem in California's grid in recent years. A root cause analysis of the issue conducted in January this year identified resource adequacy and planning deficits as major problems. Renewable energy has an intermittency problem while lithium battery storage (the most common and popular option) is not yet economical and cannot rapidly cycle up and down during emergencies. Do you think these factors might be possible hindrances in your plan to reach 100% renewable energy targets? If yes, what solutions are you evaluating?
LADWP is a vertically integrated municipal utility. We own or control our generation resources, transmission grid, and operate and maintain our distribution system. This structure has not only allowed the City of L.A. and LADWP to set and put into action the most ambitious decarbonization goals, but has also allowed LADWP to do it reliably. The LA100 study also showed that our grid can be decarbonized while we maintain our ability to provide power through major events such as wildfires and earthquakes. Reliability is central to our decarbonization efforts. If LADWP decarbonizes in a way that is affordable, reliable and equitable, we’ll have done it in a way that creates a model for other utilities.
LADWP's FiT program has, by and large, been a success. However, a 2019 study conducted at UCLA identified estimation and approval of project length and timeline as well as delays in interconnection time and costs as challenges in implementing the program. Recently, you expanded the existing FiT program by an additional 300 MW to 450 MW. Is the LADWP planning to make changes to internal processes to approve and expedite interconnection time with the current expansion?
LADWP’s FiT program is an example of one of several local solar programs that have helped ensure L.A. continues to lead in local solar. We strive to continually improve programs, and since the FiT program began in 2012 numerous improvements have been implemented which, in combination with other local solar programs including our community solar programs, has led to L.A. being recognized year after year for being the top city for solar in the United States. That continuous improvement will be critical as we continue to ramp up local resource development, including local solar.
Can you talk a little bit about how you intend to finance the transition? What, according to you, are the big-ticket items in making the transition and how do you intend to raise money to offset their costs?
The LA100 study showed that the transition to 100% will cost between $57B to $87B. That is in addition to the existing planned investments LADWP has. To fund this transformation in a way that is affordable, it is critical that we continue to lead in energy efficiency and electric vehicle adoption. As a leader in decarbonization plans, LADWP will also pursue external funding opportunities to help rapidly advance technologies such as long duration storage and green hydrogen. Additionally, in June LADWP’s Board approved the Equity Strategies effort, which will be a community-driven effort to enact strategies to ensure environmental justice and equity through this renewable transformation, and that effort will include an examination of rate design.
In my research, I came across several pieces that highlight the role of environmental justice in LADWP's renewable energy goals. Can you talk about how LADWP plans to accomplish its renewable energy goals while ensuring environmental justice to marginalized groups and communities of color.
LADWP has led with efforts that include our Equity Metrics Data Initiative along with a growing portfolio of customer facing programs that help customers save money and play a direct role in the renewable energy transformation. Those include multifamily energy efficiency programs and our community solar programs.
LADWP’s Equity Strategies effort, approved by LADWP’s Board in June, will build on that foundation and create a community-driven effort to identify strategies to ensure that this transformation is equitable. Similar to how the LA100 study was unprecedented in its technical achievement, the Equity Strategy effort will be unprecedented in how utilities engage communities and help ensure programs and policies are intentionally designed with environmental justice and equity as a central priority. LADWP aims to not only get to 100% carbon free, but do it in a way that is affordable, reliable and equitable. Achieving this will create a blue print that other utilities can model.
I'd also like to know more about the role of carbon offsets in LADWP's renewable energy goals. Accomplishing your goals requires RE tech that has not yet fully matured or reached the desired price point. Do you plan to use carbon offsets, if things go awry? Why/why not?
LADWP’s goal is to reach 100% carbon free by 2035. Following the LA100 study, LADWP is now embarking on selecting a specific pathway towards 2035 to meet the goal of a 100% carbon free portfolio. Carbon offsets are not expected to be part of that portfolio.
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