WORKWEEK

California hit a cool milestone at the end of April. It generated sufficient electricity from renewable power to meet 99.5%+ of statewide demand for a few hours. Similar milestones have been hit elsewhere before (Denmark, South Australia), but California’s is the largest system to do so. 

Of course, many, myself included, heralded this as an exciting vision of the future. Not only can it act as a call to action to other geographies to show them what’s possible. It also illuminates additional opportunities for impact. As this thread helpfully explores, renewable energy sources were curtailed in the same window when they powered the entirety of California’s grid: 

In the same hour last week that renewables hit 99.87% of demand, more than 2,900 megawatts of solar energy were “curtailed,” meaning that output was deliberately reduced in order to balance the grid. 

Said differently, provided with more energy storage capacity or other ways to valorize that extra electricity (e.g., co-located data centers, anyone?), California could have generated and made use of more than 100% of its electricity demand during those windows. Curtailment is worth focusing on because it also limits project developers’ willingness to bring more energy generation capacity online. If they aren’t getting paid for all the electricity they can produce, bringing new capacity online delivers diminishing returns. 

The above curtailment dynamics are some of the many challenges that complicate the lay of the land in California’s grid dynamics and energy mix. Is California a leader in decarbonization in many respects? Yes. More than half (~58%) of its electricity comes from low-carbon sources.

Source here

Does that mean the coming decades of decarbonizing will be easy? No. There’ll likely be as many fitful moments ahead as there will be moments to celebrate.

BACK TO THE BASELOAD

California has proven that renewables can provide 100% of electricity needed some of the time. Across the nation, people are weighing in on whether it’s realistic for this ever to be true all of the time. 

Even if it’s in super slow motion, attempts at decarbonization are happening. And they’re revealing gaps in electricity generation capacity. States from California to Texas are warning of rolling blackouts this summer, when demands on the grid will be highest. Hotter summers and the retirement of ‘reliable’ power plants, whether fossil fuel-fired or nuclear, drive these concerns.

As we discussed last week, California is actively planning on closing an absolute workhorse of a power plant, namely two twin nuclear reactors at Diablo Canyon. That 9% nuclear on the chart of California’s electricity generation mix we shared earlier? All Diablo. 

Even if / before Diablo Canyon shutters, California warns it will face significant electricity shortcomings. By 2025, when Diablo Canyon may close, these problems will persist or worsen absent robust renewable energy development.

In light of developments like these, more conversations are turning back to whether renewable power can do it all. And if not, what sources of electricity beyond natural gas can ensure there’s enough electricity, regardless of the time of day, weather conditions, or peak demand levels?

Hydropower doesn’t have the intermittency problems of solar and wind. Nor does nuclear, but it can be more expensive than renewables, which is to say nothing of the challenges and costs incurred with building new nuclear power plants. A candidate for governor, Michael Shellenberger is running his campaign in part on the back of a promise to bring more nuclear power to California. His campaign is not without traction, though he’s still a longshot. ‘Deep geothermal‘ could be an option, but there’s still a lot on that front to unlock technically.

Notably, a former head of the Rocky Mountain Institute recently recanted, calling for a renewed embrace of nuclear power. The Rocky Mountain Institute is a famous champion of the idea that solar, water, and wind (“SWW”) are viable, stand-alone future electricity sources, Here’s his revised prediction:

…I will make a prediction. Within 20 years… we will revert to the not impossible, but merely implausible Plan B, nuclear fission—unless nuclear fusion has proven commercially viable by then—and we may even find that it’s not so implausible after all. Unlike wind and solar, nuclear power can scale up without significantly diminishing returns to scale….

ZOOMING OUT

As we look to the future, it’s also worth noting that fully decarbonizing will require more electricity. Things like cars will need to run on ‘electricity’ miles instead of gasoline miles. Similar shifts will be necessary for a lot of industrial processes. In  Electrify: An Optimist’s Playbook for Our Clean Energy Future, Saul Griffiths estimates the U.S. will need to produce 3-4x more electricity to decarbonize fully.

As if expanding capacity isn’t enough of a challenge, developments on the federal policy front risk significantly stunting progress in renewable energy development. 

A U.S. Department of Commerce investigation into international suppliers of solar cells and other critical inputs in solar technologies has reportedly already caused widespread disruption, stalling more than 300+ solar projects in the intervening months.

Stellar reporting from Canary Media also traces a lot of the Biden Admin’s decision-making on these points back to a small Bay Area-based company, Auxin Solar, that originally petitioned for the investigations. There may be merit to their accusations that suppliers in China and other S. East Asian countries are dodging tariffs when importing their wares. Probably not sufficient cause to grind the entire solar industry in the U.S. to a halt, though.

If Biden is serious about transforming the U.S.’s electrical grid to 100% renewable power by 2035, then present circumstances require swift resolution. Ignoring the fact that relatively little has been achieved in terms of net new legislation or spending to supercharge renewable energy or climate tech federally, things are moving in the decidedly wrong direction right now. Fossil fuel plant closures are already delayed, given the slow-down in new solar development.

THE NET-NET

In a recent conversation with Levi Tillemann, formally of the World Economic Forum and the Obama administration, he described California’s role as “pulling the rest of the country, kicking and screaming towards electrification.” CA makes significant investments in electrification, whether in EVs, or, as evidenced by the recent successes, with developing renewable energy capacity over past decades.

None of which is to gloss over California’s challenges that we outlined above. But I wager California will offer many case studies on tackling these issues. It’ll probably be a ground zero for figuring out whether solar, hydro, and wind alone can provide enough consistent electricity when paired with energy storage systems or whether other resources will remain a requirement. 

What can’t continue to win in the long or medium-term is the 37% commanded by natural gas in California’s 2020 electricity generation. Nor can you have consumers flipping switches and not getting any power. In sum, threading that needle is the paramount challenge. 

Key areas of innovation to watch are:

• Energy storage: Beyond batteries, energy storage systems of differing scale and duration will help tackle the intermittency challenges of renewables and reduce curtailment.
• Buyers-of-last-resort: Renewable energy developers need plug-and-play ways to valorize their downtime to cut curtailment even more. Paying them for all the MWs they can produce will help them expand capacity more quickly.  
• Back-up low-carbon capacity: Whether it comes from as-of-yet unproven technologies, like nuclear fusion or deep geothermal, or ones like nuclear fission that have been around for 70+ years, back-up power sources will be necessary for a long time. Decisions need to be made with respect to these ‘training wheels’ for renewables, lest power outages become more frequent.