Navigant Research Blog

How High Can We Go with Renewable Goals?

Peter Asmus — October 19, 2015

California Governor Jerry Brown signed legislation recently that (once again) ups the state’s commitment to renewable energy. This is the third such increase in the state’s Renewable Portfolio Standard (RPS), boosting overall reliance upon renewables such as solar and wind to 50% by 2030.

While other states such as Hawaii and Vermont have approved even higher mandates (100% by 2045 and 75% by 2032, respectively), the sheer size of the California marketand its historical role as a trendsetteris significant.

While these noble goals may raise questions among those worried about aggressive programs to combat global climate change or about impacts on the economy (in terms of higher cost electricity and loss of jobs among traditional resources such as coal), there is really a larger issue. Where will these renewables be located on the grid?

Big goals like these tend to lend themselves to large-scale renewable projects such as wind farms. In the case of California, ambitious goals on renewable procurements have prompted the California Independent System Operator (CAISO) to expand its footprint both north and east, arguing that better coordination among so-called balancing authorities is the best way to increase renewables without requiring expensive fill-in-the-gap resources, such as gas-fired peaking plants. PacifiCorp is among the most noteworthy participants in this expansion of energy imbalance markets.

Into the Wind

This bigger-is-better frame of mind is based on sound thinking on past experience, which verifies that the larger the control area, the less of an issue variability in wind imposes on grid reliability. This makes inherent sense; if the wind suddenly dies down, chances are it is picking up in another location, especially if the balancing authority can mix and match resources over a wide swath of terrain. This is why old-school thinking that dates back to when I first started writing about wind power argued that wind could only supply up to 10% of our power.

Of course, countries such as Denmark have blown these kind of assumptions out of the water (literally). The country currently derives roughly 30% of its total electricity from wind, most now coming from wind turbines placed offshore. At times this year, Denmark produced the equivalent of 140% of its own electricity demand from wind power. Interestingly enough, Denmark has set a goal of 100% renewable energy not only for electricity by 2050, but also for heating and transportation!

Yet, for me, the more interesting trend is not large-scale commitments to wind, but the evolving innovation at the distribution retail-level with, onsite solar PV being increasingly linked to batteries. Let’s call this a bottoms-approach to high renewables reliance (and resilience).

The Frequency and voltage issues are major concerns in Hawaiiwhere the balancing authority is relatively small and isolatedbecome magnified in a microgrid. Distributed energy resources (DER) are on the rise. Solar PV is expected to emerge as the lowest cost resource of all over time. It is not unreasonable to foresee a time when nearly every residence and/or commercial complex will have a default option of onsite solar PV.

These two trends—larger wholesale renewable balancing markets and smaller distributed DER networks such as microgrids—are fueling passionate debates about the best path forward to addressing climate change through increases in renewable energy generation.

We have to harness both simultaneously in order to meet these renewable aggressive goals. Nothing ever goes as planned in this world, especially when it comes to energy (oil pricing being a great example), so we need to hedge our bets.

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