The Case for California to Engage in Grid Markets Across the West (Greentech Media)

Published March 30, 2017

By Jeff St. John, Greentech Media

California could expand its grid markets to other states across the Western United States, and find a home for gigawatts’ worth of solar and wind power that might otherwise be lost to curtailment. But it’s a tough political, economic and environmental balance to merge its green power goals with the brown power coming from states like Wyoming and Utah.

Even so, a coalition of environmentalists, Silicon Valley investors and green power companies is demanding that the California legislature take up the cause this year. In a Tuesday press conference, the group pointed to the news of possible multi-gigawatt solar curtailments this spring — and the Drumpf administration’s attack on federal climate regulation — as a spur to action.

“We’re seeing what I call a flashing light warning, with these increased curtailments,” Ralph Cavanagh, co-director of energy policy for the Natural Resources Defense Council, said in a Tuesday press conference. State grid operator CAISO said last month that it could need to curtail up to 8 gigawatts at a time of unneeded solar power onto the transmission system this spring, driven by “duck curve” imbalances between high solar generation and low energy demand.

Creating a regional grid market structure could let those excess gigawatts serve the needs of utilities hundreds or thousands of miles away, and create more than $1 billion annually by 2030 in lower energy costs for California, he said — largely by finding an outlet for renewable energy that might otherwise be lost.

Tuesday’s press event marks the start of an advocacy effort to get California lawmakers to pass a law giving CAISO the authority to create an independent board, open to any Western utilities within the 38 separate “balancing authorities” west of the Rockies, Cavanagh said.

There’s certainly value to utilities in joining a regional grid that offers the opportunity to buy and sell energy based on day-ahead markets. At the same time, Cavanagh said, “It’s important to state that all Western states and California will retain their policy-making power. We’re not singling out anyone or excluding anyone. The more, the merrier.”


But NRDC’s Cavanagh argued Tuesday that the benefits of opening markets to cheap and plentiful renewable energy outweigh the potential for extending the life of coal power plants. It’s also an important way to help California achieve its renewable portfolio standard, which calls for 50 percent renewables by 2030, he said.

“We do have to have a broader market to expand here in California, and if we don’t have a broader market, it’s going to be very difficult to move it forward,” said Jan Smutny-Jones, CEO of the Independent Energy Producers Association, a trade association for power project developers representing about one-third of the state’s installed generation capacity.


Day-ahead markets offer a far simpler way to schedule and forecast energy supply and demand, opening the field to a far broader set of participants. That’s important to the companies represented by Tim McRae, vice president of energy at the Silicon Valley Leadership Group, a public policy trade association with a membership roster representing one of every three private-sector jobs in the high-tech hotbed. “An integrated Western grid allows California to reach a broader market” and will “allow our wind and solar plants to operate at full capacity,” he said.

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