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California ISO Chair Discusses Critical Paths to Decarbonizing Grid

By Media Office Staff

The 21st century power system holds significant promise for a cleaner California, and the electricity market and grid will need to be restructured to maximize its potential, according to a key official with the state’s grid operator.


Dave Olsen, chair of the California Independent System Operator (ISO) Board of Governors, discussed the strategies needed to transition the state from fossil fuels, in a Sept. 4 talk at the California Energy Commission. The California ISO manages the electrical grid for much of California and a small portion of Nevada.


“To meet California’s greenhouse gas (GHG) reduction goals, we are going to have to electrify just about everything,” he said. “Especially buildings and transportation.”


Buildings account for about 20 percent of the state’s emissions, and transportation accounts for about 41 percent.


“Both the structure of the grid and the wholesale market will have to evolve to accommodate all this electrification without relying on gas-fired generation as we do today,” he said.


Decarbonization means phasing out natural gas as a source for generating power. Reaching that goal will require a multipronged approach that begins with energy efficiency, Olsen said.


“Every sector of the economy is going to have to become much more efficient,” he said. “Per capita consumption of electricity will have to decline even as we electrify more. If we don’t become radically more energy efficient, it will be much more difficult and expensive to operate without fossil fuels.”


Clean resource diversity is a key component of decarbonizing the grid. Olsen emphasized the need for renewables and other clean resources to provide ancillary services and essential reliability services. Frequency response, reactive power and voltage support and reserves all will need to come increasingly from wind, solar, geothermal, hydropower, energy storage and demand response ahead of natural gas.


Next is managing demand while increasing amounts of renewable energy are coming online. So far, demand has been managed by forecasting energy needed to serve demand and available resources. Because of the intermittent nature of wind and solar, however, the focus will shift to forecasting wind and solar output, and dispatchable demand, Olsen said.


“We’re moving from a paradigm of forecasted demand and dispatchable supply, to an era of forecasted supply and dispatchable demand,” he said. “When the sun comes up, we have so much solar capacity that we can turn off all our fossil plants during the day. But when the sun goes down and people come home from work, we have a very steep ramp where we have to come up with a huge amount of power. As we decarbonize, we are going to have to meet that ramp up with clean resources.”


A western multi-state, fully coordinated electricity market will be an essential part of the solution for California to reach its clean energy goals, Olsen said.


With a regional grid, the ISO could use solar resources in the mornings from New Mexico or Arizona, which are an hour ahead, reducing the need to turn on as many gas-fired plants. In the afternoons, other states could take California solar power, and avoid turning on their plants for their afternoon ramps.


Still, Olsen sees gas-fired plants being around for at least the next 10 to 15 years even if the plants run very little or are mainly used as standby power to meet contingencies.


Which leads to his next point – maintaining the grid’s ability to deliver electricity without interruption.


“As a grid operator, reliability is the most important thing by far,” he said. “All of the progress that we are making to decarbonize would stop if there were to be a blackout.”


Olsen said studies show California can retire several thousand megawatts of existing gas generation with no impact on reliability. What’s important though, is the location of those retirements.


“We need a sustained orderly phase down of gas-fired generation,” he said. “Plants must be able to remain financially viable even as they run less and less. Otherwise, retirements could happen haphazardly, or some generators could abandon California altogether. We urgently need a plan to retire gas in the right areas so we send the right signals about how we are going to phase out its use. We don’t have that plan yet. “

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