California Shows Natural Gas is Foundational for Responsible Clean Energy Transition
Posted September 30, 2020
The wild thing about the electricity grid is that you can see when the laws of man succumb to the laws of physics.
California provided a case study in late August. The state’s first rolling blackouts in nearly two decades spotlighted its mandates for how much electricity certain technologies can provide. There was lots of blame to go around and, while there is no single culprit behind the blackouts, what happened showed just how vital natural gas generation is to maintain a fully functioning grid, because of its reliability and unique operating characteristics.
California’s blackouts revealed that power generation mandates do not overrule the complex engineering needs of a robust, reliable, and affordable power system. If these needs are not met, the power grid can quickly deteriorate – even in the world’s fifth-largest economy.
In the aftermath, many pundits have tried to cast all the blame on renewables, or on natural gas, or on certain state agencies and political figures. This is neither appropriate nor helpful in illuminating the very complex balancing act of transitioning to a lower carbon future while still keeping the lights on.
While California has rightly been recognized as a leader in renewable energy deployment, the state still relies heavily on natural gas generation both in and out of state. As of 2018, natural gas made up almost 50% of in-state generation with about 20% coming from wind and solar.
Natural gas generation provides California with dispatchable, affordable and flexible power to help maintain electric reliability and accommodate the growth in renewable energy resources. As California has a 60% renewable energy standard by 2030, the state will need to update its approach to reliability to responsibly integrate intermittent energy resources. Natural gas generation is today, and will continue to be, the foundation of the responsible and reliable integration of renewable energy to keep the power on.
As API has said in various venues, electricity reliability is not synonymous with one fuel source or technology type, as some have tried to argue. Reliability is, on the other hand, a set of attributes that are necessary to keeping the power moving. The grid’s needs – these “attributes” – are evolving as systems integrate more intermittent renewable energy resources.
For example, if a certain region needs more generators that can more quickly change their output to maintain reliability as wind or solar resources drop off, then it can create opportunities for power plant developers to compete to provide these services.
The same goes for more environmentally friendly or reliable energy. A 2017 study by The Brattle Group lists various reliability attributes that are needed for more renewable energy integration and evaluated different technology types based on their contributions:
Instead of promoting one type of energy resource or technology at the expense of others in the name of reliability, regulators ought to define exactly what they need in their system to keep supplying power and then allow all technologies to compete to provide services. This can include cleaner power as well. This fuel and technology blind approach is critical in ensuring a safe and reliable clean energy transition.
Unfortunately for Californians, this type of proactive planning didn’t quite take center stage. Warnings of potential inadequacy or reliability concerns were made last year as California faced an impending gap in available electric generating capacity. When solutions were offered, natural gas generation was partially excluded from providing needed electricity.
In 2019, the operator of most of California’s power grid, CAISO, released a report saying that California could face serious reliability issues in the coming years—warning that by 2022 California would need about 4700 MW of new capacity commitments—a number reflecting the growth of renewable energy requirements in the state.
After CAISO’s warning, it was up to the California Public Utilities Commission (CPUC) to approve capacity procurements to meet the projected shortfall. As CPUC sought public input on procurement, many stakeholders either said the problem did not pose reliability challenges, or even if it did, the CPUC should prohibit natural gas generation from participating. Eventually, the CPUC did move forward in addressing part of reliability gap projected by CAISO by setting up procurement of resources, but it explicitly prohibited any new natural gas plants from participating in fulfilling this need. New natural gas generation could have been especially helpful in providing backup power when the state faced unexpected drop offs in existing natural gas generation availability, renewable output and import potential.
One year later, as California scrambled to fill reliability gaps in August, the state had to extend the life of older natural gas plants slated to retire in compliance with another new environmental regulation. While a necessary move, this was not proactive planning. Dismayed by the handling of reliability during the state’s energy transition, Gov. Gavin Newsom publicly declared that that the state cannot sacrifice reliability while leading an energy transition.
A responsible energy transition puts natural gas generation at the foundation. In addition to its generating attributes, natural gas generation also provides California with reliable and cleaner energy in a cost-effective and less land-intensive manner.
According to a recent White Paper by Wartislla, meeting California’s ambitious clean energy goals without fossil thermal plants would require more than double the capacity buildout and cost about three times as much. This is backed up by a CPUC study on the land strains of replacing 1 MW of firm capacity (the certainty of power when needed)—the modelling found that replacing 1 MW of natural gas capacity would take about 2 MW of solar (measured only during the daytime in the peak summer hours) and 8 MW of wind. The CPUC has also raised concerns that a lack of flexible capacity, as is provided by natural gas generation, could lead to curtailment of available renewable energy generation.
Looking ahead, the future of California’s energy transition, like those in other corners of the world, will rely on continued innovation in natural gas generation to even further reduce or eliminate plant emissions and to make them even more responsive to renewable energy output. This can reduce renewable energy curtailment, promote more renewable energy integration, and serve as necessary capacity to maintain reliability.
California can lead the way in advancements in critical natural gas generation resources to improve a plant’s flexibility and efficiency while lowering emissions. Natural gas power plants paired with battery storage systems can increase the flexibility of a power plant economically and without significant additional land use impacts.
The state has been the home to some of the country’s first natural gas battery hybrid power plants, which includes on-site batteries to make the power plants even more quick to respond to changing needs of the grid.
In Long Beach, AES replaced aging gas peakers with a system of combined-cycle natural gas and battery storage that will provide more than 400 Mwh of local energy during peak hours. SoCal Edison also recently added a battery system to a gas peaker to further improve response times to varying grid needs amid high renewable penetration.
California also has broken barriers in advancing carbon capture storage (CCS) on natural gas power plants. This year, the Oil and Gas Climate Initiative (OGCI) partnered with the California Resources Commission to provide technical assistance and funding to retrofit the Elk Hills Power Plant with CCS technology. Last fall, the Los Angeles Department of Water and Power (LADWP) committed to moving away from sourcing power from a Utah coal plant by converting the facility to natural gas using innovative technology that will be hydrogen ready by 2045.
These advancements are nothing new. In 2010, a Calpine project in Northern California was the first power plant to receive a permit with federal limits on greenhouse gas emissions—earning praise from the Natural Resources Defense Council.
A cleaner, more flexible and more responsive fleet of natural gas generation is critical in allowing California and other states to reliably meet ambitious energy goals. There have been some unfortunate instances when natural gas was explicitly prohibited from helping California reach its clean energy and clean air goals.
The recent blackouts should be a clear call that electric reliability becomes even more complicated in times of major energy transition, and that reliability planning should be fuel and technology blind. California’s energy future can be bright, and natural gas is there to back it up.
About The Author
Jeff Stein is a Policy Advisor in the American Petroleum Institute’s Market Development group where he covers API’s work on natural gas and electricity markets. Prior to API he held a number of roles in energy consulting, policy, and foreign affairs. He has a BA from the University of Wisconsin and an MA from the Johns Hopkins University School of Advanced International Studies.