On January 11, 2015, a rather unremarkable Sunday earlier this month, the California Independent System Operator’s daily duck curve was approximately 1,500 megawatts below where it is projected to be in 2020.
That’s the midday statistic. Overnight, the daily duck curve was about 3,000 megawatts below the 2020 forecast.
That means that CAISO is operating the grid, this month, at net load (that is the system demand less solar and wind generation) more than five years ahead of forecast.
California needs more energy storage to match the duck curve
Experiencing this net load years ahead of the CAISO’s forecast has not placed the California grid in crisis. The state's grid has sufficient flexibility today to accommodate the rapid rise of solar power, which is the primary driver of change in CAISO grid operations.
However, with the January 2015 milestone landing well beyond the 2020 forecast, the utilities and CPUC should accelerate procurement of energy storage to match the accelerating duck curve.
California has repeatedly demonstrated that early procurement of modest quantities of emerging technologies drives scale, bankability, and ultimately cost-effective, high-volume quantities of new technologies and resources. With the energy storage procurement cycle in progress, let’s open the long-duration energy storage market in 2015.
Long-duration energy storage offers both the benefits of grid flexibility, similar to flexible gas plants, and the reuse of zero-marginal-cost midday solar during the evening energy ramp. Long-duration energy storage’s unique functionality uncaps the limits to growth of solar in California -- and beyond.
Less than a week before the January 11 daily-duck-curve milestone, Governor Jerry Brown used his 2015 inauguration speech to call for a 50 percent renewable energy future in California. Beyond air quality and climate-change mitigation benefits, California’s abundant renewable energy resources provide energy with zero marginal cost and zero fuel price volatility to our citizens, limiting rate shocks into the future.
California’s energy agencies are already collaborating to accelerate penetration of energy storage. Several promising long-duration energy storage technologies are now in early commercial operation, home-grown in California with support from the California Energy Commission and the U.S. Department of Energy. The CPUC can pull out the playbook that bestowed California with an abundance of solar energy and use it again with energy storage.
Waiting to see which technologies become bankable in 2018 for 2020 delivery is unwise and unnecessary. The 2020 duck curve is here now. As we did with RPS contracts, which gave rise to the global, utility-scale solar boom over the last seven years, we need to use the current CPUC-sponsored energy storage procurement process to bring bankable, long-duration energy storage technologies to market so that they can deliver at scale in 2018 -- not sometime in the next decade.
Scale drives cost reduction for storage
We are already witnessing the impact of manufacturing scale on cost for lithium-ion batteries being bid into the electricity market. A variety of emerging long-duration energy storage technologies will also experience the rapid cost reduction that inevitably follows commercial scale.
Pay attention to what happened with solar -- many of those folks are now working in energy storage. In both my consulting practice and in my pro-bono work with CalCharge, I have had the opportunity to see inside the proto-factories of a range of emerging long-duration energy storage technologies, all of which have demonstrated major engineering progress. What they need next is a commercial contract of modest scale to prove bankability.
What is the opportunity in 2015 to build the market for energy storage in line with the accelerating duck curve? Utility contracts from the current round of energy storage procurement can provide the market pull for long-duration energy storage technology. The first contracts do not have to be 100 megawatts x 12-hour scale, but rather 1 megawatt to 10 megawatts in scale with durations to match the midday "duck belly."
That’s a low-risk proposition, as electric customers don’t pay for what’s not delivered. The recent SCE Local Capacity Requirement procurement aptly demonstrates that the utilities are open to new ways to procure flexible resources. With the energy storage procurement cycle in progress, let’s open the long-duration energy storage market in 2015.
Was the January 2015 data an anomaly? No.
CAISO uses a March 31 forecast date to illustrate the daily forecasted maximum ramp requirements on its system from 2014 through 2020. As solar energy production drops off, CAISO forecasts a 14,000-megawatt resource ramp in 2020 on that date. The four- to seven-hour ramp period during the afternoon and evening is well within the scale of long-duration energy storage.
In 2014, on March 30, a Sunday with strong wind production, the actual net load was two years ahead of forecast, hitting the 2016 CAISO forecasted mid-afternoon nadir. Before all of last year’s incremental solar was up and operating, the CAISO hit 2,000 megawatts below forecast net load midday, and 3,000 megawatts below forecast net load overnight.
The consequence was approximately an 8,000-megawatt ramp over a six-hour period during the late afternoon and evening. In about two months, CAISO will provide us with visibility about how far ahead of forecast we are at the end of March 2015.
In neither January 2015 nor March 2014 did the lower-than-forecast net load stress the engineering limits of the system. However, CAISO did experience multiple days with negative real-time energy pricing during 2014, demonstrating the limitations to system economics given today’s substantial supply of inflexible generation participating in the energy market.
Since Christmas week 2013, the system operator has been helpfully posting actual net load. You can find the daily duck as the last chart here, updated every ten minutes.
2015: The year for energy storage procurement in CAISO
CAISO is performing the role for which it was created: it is providing both real-time data and forecasts for how supply and demand will match in its territory. Thank you to the folks who have provided the daily duck for the benefit of the market and regulators.
Now what do we do with the CAISO’s good work?
2015 is the year to open the market for long-duration energy storage. To avoid the perverse outcome of curtailment of zero-marginal-cost, greenhouse-gas-free renewable resources, we need to absorb gigawatt-hours' worth of midday solar energy for re-use later in the day or the week. California is uniquely qualified to deliver on the governor’s 50 percent renewable goal: we have the abundant solar and wind resources, the innovative companies, and the open energy storage procurement proceeding that can, at a modest scale, kick-start the long-duration energy storage market.
My request to the utilities: scour the bidder landscape, pick a variety of technologies, teach the companies the ins and outs of your contracting processes, and write some contracts. My request to the CPUC: encourage the utilities to do exactly that -- take risks, on a portfolio basis, at reasonable volumes, this year.
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Julie Blunden is a veteran of transforming energy markets in California and around the world. She is the founder of Julie Blunden Consulting through which she has performed work for both solar and energy storage businesses. She is also the chair of CalCEF Catalyst, the governing board for CalCharge. The views expressed in this article are her own.