Final Findings on California's Outages Highlight Need for Storage
- Jan 21, 2021 4:20 pm GMT
It’s finally time to stop all the speculation. After much anticipation, The California Independent System Operator (CAISO), California Public Utilities Commission (CPUC) and California Energy Commission (CEC) released their comprehensive root cause analysis last week of the underlying causes behind summer 2020’s rolling outages. The final findings are not all that surprising. Like the preliminary reports suggested, and many commentators already assumed, a nasty combination of a historic heatwave, resource planning issues, and some myopic market practices left the Golden State fighting for air.
This report will disappoint both the natural gas fanboys who’ve held up California’s woes as proof that renewables can’t work, and the quixotic renewable advocates who’ve claimed the blame lay solely with outdated regulation and demand response programs.
California was a clean energy trendsetter, becoming one of the first states to adopt a plan for going carbon neutral some time ago. As it stands now, the state has the stated goal of being carbon-free by 2045 and boasts 29.2 GW solar and nearly 6 GW of wind generation.
To put it simply, CAISO would not have failed the way they did had they had access to a more traditional energy portfolio. That being said, more intelligent planning targets would have probably mitigated most of the power outages we saw. The market had not scheduled enough demand and, making matters worse, day-ahead rules made it all but impossible to notice the mistake.
So, what has to change to make sure this doesn’t happen again? Rule changes, first of all, and they’re already underway. The CPUC has opened an emergency reliability rulemaking to ensure greater resource procurement before summer 2021. CAISO is also recommending that the commission raise resource adequacy targets for peak hours.
The grid itself will also need to look radically different if California hopes to meet clean energy goals without sinking to Venezuela-like reliability levels. Namely, the state needs to invest heavily in storage and make sure the projects get on line right away. The CPUC and CAISO have recognized this and have already taken steps in the right direction. In addition to acknowledging the need for more batteries, the agencies have promised to do everything in their power to see planned projects are completed on time.
However, the state will most likely need many more batteries than those that have been planned. The good news is batteries are going to be really cheap this decade. According to recent statements coming out of the Electric Power Research Institute, it’s possible that costs for battery packs will drop from about $120-200/kWh to $80kWh by 2030. That’s encouraging.
California’s grid is sure to look dramatically different by the end of this decade. And if it doesn’t, we can expect to see even greater emigration from the state. That being said, even if all the ideal storage goals aren’t met exactly on time, it’s possible the state won’t see another such heatwave for sometime. Fingers crossed.