Michael Picker has spent part of his 11 months as president of the California Public Utilities Commission managing the aftermath of the alleged misdeeds of his predecessor. But as he oversees some of the biggest changes to California energy policy in over a decade, he’s also spent a good deal of time explaining his vision for greening the state with distributed energy, along with the distributed decision-making to make it work for the grid.
Since he was appointed in December, Picker has been stressing certain key policy philosophies for how the CPUC can help the state reach its carbon reduction and green energy goals. These include a preference for market-based solutions over technology mandates, a heavy emphasis on electric vehicles as part of the mix, and an enthusiasm for technologies that can manage lots and lots of distributed energy resources (DERs) in concert with the grid as a whole.
In a series of talks this month, Picker declined to discuss details of big proceedings under review, such as the CPUC’s net-metering reform, which has pitted the solar industry against the state’s big three investor-owned utilities. But he did sketch out a plan for managing the inevitable growth of intermittent renewable energy, whether from millions of rooftops or ever-cheaper utility-scale solar and wind projects.
These are now an economic choice, rather than a mandate-forced choice, for California’s utilities, he noted during a talk last week at a Silicon Valley Leadership Group-hosted event in Santa Clara. Most have already signed contracts to get them to their 33-percent-by-2020 renewable portfolio standard (RPS) goals, he said, and it’s entirely reasonable for them to meet the state’s newly enacted 50-percent-by-2030 goals.
But California doesn’t need a whole lot of new renewable power in the next five years -- or much power of any kind -- to meet its fundamental energy needs, he said. The California Energy Commission projects flat energy demand for the state through 2022, except for specific load-constrained areas, he said.
What the grid does need, he said, is responsive generation and demand -- resources that can act quickly and in tandem to manage the state’s intermittent renewable energy mix. It also needs reliable solutions to deal with an excess of solar and wind power when the grid doesn’t need it, which is starting to cause unprecedented bellies and steeply rising ramps in system-wide demand, as illustrated in the “duck curve” projections from state grid operator CAISO.
“There aren’t a lot of prevalent, cost-effective technologies that can go from zero to 90 in 10 minutes,” he said. Today, gas-fired turbines, akin to jet engines in their flexibility, can ramp up in about 2 minutes, and are the preferred choice for managing these short-turnaround grid needs. In May, Picker approved a new gas-fired power plant for SDG&E, angering advocates of a plan to bring solar PV, energy storage, demand response and other distributed resources on-line by the end of the decade to cover the utility’s capacity needs.
But demand-side resources -- homes and businesses that can reduce their electricity consumption quickly enough to meet the system’s stringent response times -- could fill the need as well, if they can be proven effective, he said. So could energy storage, or electric vehicles that can respond to grid commands. In that sense, the fundamental problem the CPUC is looking at “isn’t about distributed generation; it’s about distributed decision-making.”
Picker returned to this point during a Tuesday talk at the More Than Smart conference in San Francisco. “It makes sense, since we’re an infrastructure agency, not a technology agency, to ask what...we need to do to build the underlying infrastructure that will support this.”
The CPUC is working toward this goal on many different tracks, but two lead the pack, he said. The first is its distribution resources plan (DRP) proceeding, which requires utilities to consider distributed energy resources as coequal with traditional investments into the distribution grid. That’s led to some groundbreaking new data-sharing from Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric on the condition of their distribution circuits, and how much distributed energy they can handle -- though many third-party DER providers want more data.
The second is called integration of distributed energy resources (IDER), though it’s gone through several acronym permutations (IDSM, IDSR) over its existence. This proceeding dovetails with the DRPs by setting up a framework for how to transform their grid-edge values into policies for utilities to source them, which could lead to procurement mechanisms, new tariffs and other ways to bring money to the table.
As for how to value flexible, grid-supporting distributed energy, Picker said his goal is to “refocus away from technology as inputs, and toward greenhouse gases and outputs, and how all these technologies together provide the cleanest, more reliable and most effective grid.”
California’s electricity sector only accounts for about 20 percent of the state’s greenhouse gas emissions, which means that hitting RPS targets will have only a limited impact on its reduction goals, he said. The built environment provides about 30 percent, and transportation is responsible for 40 percent, which makes it the biggest target. “To hit our greenhouse gas goals, we have to use clean electricity to steal market share for the transportation sector” from fossil fuels, which means a massive increase in electric vehicles.
Picker’s emphasis on carbon prompted the panel moderator, GTM Research head Shayle Kann, to ask if greenhouse gas reduction was now the CPUC’s driving purpose. “No. The underlying purpose is to provide reliable electric service,” Picker replied. “But we’ve increasingly started to pay attention to the role of greenhouse gases in the electric system, both as a source and as a solution.”