Published on December 30th, 2016 | by Susan Kraemer0
New Arizona Policy Would Mandate Solar After Dark
December 30th, 2016 by Susan Kraemer
A way to incentivize the use of clean energy like solar after dark — instead of gas peakers — to cover peak loads has been proposed in a white paper commissioned by Arizona’s Residential Utility Consumer Office, through a revision of state Renewable Energy Standards (RES).
Huber told Utility Dive this week that his proposed Clean Peak Standard (CPS) should push developers to cover the need for generation at specific — peak — times.
“It adds more renewables, but it adds renewables when the system most needs capacity so it uses renewables to deal with system cost drivers and saves ratepayers money when electricity prices are highest.”
Under a Clean Peak Standard, during an identified peak demand period, a solar contract would have to deliver a percentage of its generation between certain — peak — hours.
A 25% CPS for example would mean that 25% of MWh generated during the identified peak demand period would have to be from “qualifying clean peak resources.” Currently, coal or gas peaker plants provide that peak generation.
So How Would Solar After Dark Work?
While so-called “spilled solar” at midday is already a concern, there are slim pickings so far in covering the evening peak with solar generation: battery storage or thermal solar.
The only solar projects capable of dispatching solar on demand at any time day or night, due to their thermal solar energy storage in the US are Crescent Dunes in Nevada and Solana in Arizona.
Crescent Dunes via Wikimedia
It is in Arizona, where the largest US dispatchable solar after dark project is sited, that this proposal is being considered. Solana is a thermal solar plant with the most energy storage in the US after pumped hydro — 1,680 MWh daily.
Arizona, along with Nevada, has been at the forefront of the battles over net-metering between utilities and rooftop solar, that hinges on too much solar by day, increasing the duck curve after dark.
Just this week the Arizona Corporation Commission (ACC) approved a drastic drop in net metering rates to shadow average utility-scale solar rates. Since utility-scale solar wholesale prices are much lower than rooftop prices, due to efficiencies of scale, that is a huge blow to rooftop in the state.
The decision “balances the economic benefits of grid-scale solar — which provides clean power to all of our customers at far less cost — with the desire of some customers to install solar on their rooftops,” said Arizona Public Service (APS) in a written statement.
Peak Loads are After Dark Now
Arizona is far from the only state trying to work out an arrangement that is fair to both utilities and those who invest in their own rooftop solar. According to the North Carolina Clean Energy Technology Center, in just the last few months, 22 states have considered or enacted changes to net metering policies, as solar covers more daytime demand.
Like California, Arizona’s peak hours have now moved into the evening, according to Brad Albert of APS.
I spoke with Albert, who negotiated the contract for Solana to supply after dark and before sunrise peaks, using thermal solar storage, three years ago, when the 280 MW Solana solar project came online. Even back then, APS peak hours were rapidly changing with more solar coming online on his customers’ rooftops.
Even three years ago, he was identifying two new peaks for Arizona, due to the increase in solar generation. There is not just the evening peak, but also a morning peak as well, before sunrise, especially on winter mornings when people get up in the dark.
Valuing Solar for Peak Loads
The CPS represents an acknowledgement of the importance of clean energy to supply peak generation. The CPS could be adopted by the other 29 states that have RES mandates requiring that state utilities procure an increasing percent of renewable energy.
These states account for more than half of US electricity used. The mandate would be technology-neutral; it would be up to developers could determine the best way for them to offer utilities a way to meet the CPS, according to Huber. “This is about evolving technology solutions through technology-agnostic price signals,” he said.
A CPS might even be a way to revalue the neglected base load renewables; geothermal, and “don’t-get-no-respect” Roger Dangerfield of renewables; landfill gas. Both provide steady base load generation, and back in the day when base load was what the grid was all about, landfill gas and geothermal looked most likely to represent the future of clean energy.
But as wind and solar burst on the scene, making a much more variable generation pattern, base load is less crucial when so many demand periods are more than filled by solar and wind.
Image Credit Cal-ISO
Covering the Duck Curve — For Less
The CPS would reduce the use of coal or natural gas peaker plants as the first line of defense for the duck curve as so much solar bursts on the scene. Jason Burwen, policy and advocacy director at the Energy Storage Association told Utility Dive that the CPS could save money:
“We know that peaking capacity resources are generally the most expensive. RUCO’s proposal could thus send a clear signal of value for storage not just to enable delivery of clean energy at times of greatest need, but also to simultaneously avoid other investments in peaking capacity.”
The idea is applicable not just to Arizona, but it could circumvent the no-win battles between the solar industry and utilities, based on the ever-increasing amount of solar generated simultaneously.
The CPS does a lot to ensure a market develops for the various storage technologies that can control and direct solar to become dispatchable during peak periods, like grid scale batteries or thermal solar (otherwise known as CSP, or Concentrated Solar Power).
Forestalling the Inevitable: Curtailed Solar
This refocus will help reduce curtailment. Increasingly, according to Andrew Bell, environmental attorney with Marten Law, utility-scale solar farms are going to be asked to shut down during overproduction periods when too much solar is generated simultaneously.
Though solar developers are paid a small portion of normal generation earnings when they are forced to shut down, doing so cuts into the profitability of every solar project.
Already there has been movement in this direction. PG&E for example now pays a much lower rate for midday generation, due to the surfeit of solar on the grid at midday.
The new policy solves issues both for the solar company and the utility. It is not sustainable to be curtailed. Storing some generation for later would be incentivized, making a more sustainable future by staving off the eventual decline in value of solar generation.
Finally, Utilities Would Value Dispatchable solar
Currently, utilities are incentivized to procure the cheapest solar. But a CPS would also offer utilities a better way to value dispatchable solar that can generate solar power after the sun goes down.
A thermal solar project like Crescent Dunes in Nevada can generate solar at any time of day or night, from stored solar energy in tanks of molten salts.
This Clean Solar Peak policy valuing stored clean energy is one foreseen by Nancy LaPlaca, who was Policy Advisor to former Commissioner Paul Newman at the ACC when it approved the solar storage contract between APS and Solana in 2013.
“We are underestimating the value of storage, as well as grid security,” she said to me at the time. “If the grid goes down in Phoenix on a very hot day, we will see the value of local storage that doesn’t depend on a long transmission line.”
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