Solar in California

Pushing Boundaries and Testing Limits


April 10, 2017 | Michael Goff

Solar power in California continues to grow. But as California becomes one of the first regions in the world to get over 10% of its annual electricity from solar, it will also be the first to hit major obstacles to continued growth of solar generation. Utility-level solar, mostly photovoltaic and also some concentrating solar, constituted nearly 10% of raw electricity generation in California in 2016. When distributed solar is taken into account, this figure rises to 13%. This is an impressive achievement for the growing industry, and well above the national average of about 1% solar on the grid.

With the rapid growth of the solar industry comes the challenge of ensuring that this power can be economically used. At all times, the supply and demand for electricity on the grid must be almost exactly equal; otherwise, the grid will fail. However, the output from solar panels and wind farms is highly dependent on the weather and can be unpredictable, and these plants might not be most productive at the times when power is most needed.

As Jesse Jenkins and Alex Trembath observed in 2015, the costs of integrating variable renewables and managing their short-term fluctuations are real but manageable. The biggest challenge is economic. Solar panels are typically most productive at midday, when the sun is the highest in the sky, while demand is highest in the evening. A grid with a large fraction of solar energy should therefore see prices depressed at midday, which cuts into the profitability of solar. Jenkins and Trembath suggest as a rule of thumb as solar penetration approaches its nominal capacity factor--the ratio between average electricity production and peak production--it will become increasing difficult to deploy more capacity. Solar has a capacity factor of 10-20%, meaning that California may be approaching this "capacity factor threshold."

The California Independent System Operator, or CAISO, has several tools to keep the grid balanced, and in particular to ensure that solar plays well with the system as a whole. One tool is curtailment: excess solar power can simply be cut off. This spring, with the growth of solar and more hydroelectric power than usual, Jeff St. John at Greentech Media reports that CAISO may need to curtail 6-8 gigawatts of power. This is about a quarter of solar capacity. With the price of solar panels falling and expected to continue falling, solar can still be profitable with some curtailment, but additional solutions are needed if solar continues to grow.

Curtailment is a blunt tool. St. John points out additional solutions that CAISO is developing to handle the solar load. Solar farms with advanced inverter controls can give the farms the short-term flexibility needed to replicate the frequency response function performed by natural gas peaker plants. CAISO is expanding time-of-use pricing, which would raise or lower electricity prices to consumers depending on market conditions. This allows customers with flexible needs to shift their consumption to match generation. California is also able to export excess power to neighboring states and import power during times of shortfall. The first ultra-high-voltage direct-current transmission line in the United States is scheduled to begin construction later in 2017, and this technology could eventually facilitate the development of a continent-wide “supergrid” that would calm the variability of solar by spreading it over a much larger range.

With all these tools, however, it is unlikely that solar power could economically power a majority of an electric grid without low-cost energy storage on a large scale. The National Renewable Energy Laboratory recently modeled the storage requirements for California to get 50% of its power from solar and 71% from all renewables. In the optimistic scenario, 19 GW of storage capacity is needed. Under this scenario, solar PV has a levelized cost of 3 cents per kilowatt-hour and therefore is economical with a significant amount of curtailment, and the grid is much more flexible than today’s with new demand shifting capability, 25% electric vehicle penetration with mostly flexible charging schedules, and greatly expanded electricity export capacity. Under less optimistic assumptions, the storage capacity needed might be 35 GW. In 2020, California is expected to have 4.4 GW of storage capacity, of which over two-thirds will be pumped hydro.

Most of the new energy storage in California will be in the form of batteries. Only 200 MW of battery capacity was available in the United States in 2016. California’s ambitious plan calls for 1.8 GW of new capacity, mostly from lithium-ion batteries, by 2021, but even these plans must be greatly scaled up to meet the challenge of a half-solar grid. As Will Boisvert demonstrated in 2015, such growth in grid-level batteries will not be economically feasible unless the technology comes down in cost dramatically.

The growth of solar is surely one of the great success stories in the energy industry in recent years. Continued growth of the industry, however, poses an additional set of technical and logistical challenges. Jesse Jenkins and Sam Thernstrom recently reiterated an important lesson about deep decarbonization, which they write “may require a significantly different mix of resources than more modest goals; long-term planning is important to avoid lock-in of suboptimal resources.” Especially as low-carbon energy sources like solar approach capacity factor thresholds, or other obstacles, grid planners need to think systematically. Not doing so might result in deploying renewable energy at much lower levels than deep decarbonization would require, all the while making it impossible to keep existing nuclear plants online and, ultimately, locking in a great deal of coal and natural gas for the foreseeable future.

With over half of the state’s power generated by natural gas, the impending closure of the Diablo Canyon nuclear plant, a half-baked storage requirement, and growing curtailment of growing solar and wind resources, that is exactly the path California finds itself on. Something’s gotta give.