Former Gov. Jerry Brown signed Senate Bill 100 into law Sept. 10, 2018. The ambitious bill commits the state to 100% carbon free electrical energy by 2045. There are key milestones along the way: 50% renewables by 2026 and 60% renewables by 2030.
California has been ramping up its renewable portfolio standard since it was established in 2002 with the goal of 20% renewable energy by 2017. Four years later, the target was adjusted to 20% by 2010 and, in 2008, the governor moved the target to 33% by 2020. In 2015, the legislature passed SB 350, setting a new target of 50% by 2030. These incremental changes have made California a world leader in renewable portfolio standard targets.
SB 100, while ambitious, is just another reset, based on the state’s progress to date. California already sources about a third of its power from renewables. This progress has been based largely on the steady evolution and downward cost of solar and wind power generation. However, a lot of planning is needed to optimize the use of these variable and unpredictable sources of generation – when the wind doesn’t blow and the sun doesn’t shine. The California Independent System Operator, the folks responsible for your lights going on whenever you flick the switch, must balance supply and demand constantly, while keeping an eye on the future. Too much demand, or you and many others flicking that switch, faced with too little supply at nighttime, with no sun and little wind, and people get unhappy very quickly. Too much supply, the electrical grid is stressed and power generation must be curtailed, both of which pose unique challenges for the CAISO and additional costs for ratepayers.
Wind and solar generation are intermittent and unpredictable, so developers tend to overbuild to meet demand. This method often results in over-generation, which impacts other operators and can destabilize the electricity grid. It often means curtailment; although curtailment currently represents a small amount of California generation, the CAISO curtailed about 460,000 megawatt hours in 2017. Worse, the Los Angeles Times reported that in 2017, the CAISO paid Arizona $25 per megawatt hour to take excess California electricity.
The near-term solution is natural gas-fueled peaking plants, which can be mobilized quickly to fill demand during peak periods. However, gas peakers produce greenhouse gas emissions and will have to be used less as the state approaches the 60% renewable target that is only 11 years away and not at all at the 100% target. The bottom line is we can’t meet the SB 100 targets with more wind turbines and solar panels alone.
The solution, of course, is to store power for when the state needs it. Battery storage technology has evolved dramatically in recent decades, but there are still environmental and performance issues that must be considered and the sheer physical footprint of the storage California needs today and going forward is daunting.
Enter an older, tried and true “natural battery,” the pumped hydro storage. This storage method is a proven long-term, large-scale technology employed worldwide for a century to load-balance electricity systems. More than 95% of global electricity storage is this type, which “stores” energy in water, pumped from a lower elevation reservoir to a higher elevation. Operators use low-cost surplus off-peak electric power to run the pumps and release the stored water through turbines downhill to capture gravitation energy when consumer demand for electricity is high. These plants reproduce 80-90% of the low-cost electricity used for pumping, making them net energy users. However, they make money by selling the power generated when high demand raises prices, while ensuring that renewable energy can be consumed on cloudy, windless days and at night.
California needs large-scale storage to support the energy transition projected in SB 100 by balancing supply and demand, helping the CAISO maintain grid stability, avoiding imbalances in voltage and frequency on the system, using existing transmission lines more efficiently and “shifting” renewable power from time of generation to time of most power need. Pumped storage operations have documented performance and cost structures and are cost effective for large-scale, long-duration storage compared to batteries. CAISO’s Bulk Energy Storage Case Study found that a project of LEAPS’ size at 500 megawatts would provide ratepayers with savings of about $50 million per year from improved efficiencies. The need for these efficiencies will rise as California prepares for the targets laid out in SB 100.
Pumped hydro storage currently represents a small portion of U.S. electricity infrastructure due to diverse options available to date and high initial capital investment plus the need for the right geographical conditions. However, the phasing out of nuclear by 2024 and the retirement of aging natural gas fired generation, combined with the ramping up of variable renewable generation, means the time for large-scale pumped hydro storage has come.