Solar Energy in the Central Valley and the Chicken and Egg Challenge

Carl Zichella’s Blog

Solar Energy in the Central Valley and the Chicken and Egg Challenge

Posted August 27, 2012

Over the past several years thousands of megawatts of renewable energy projects have been approved for construction on both public and private lands in California.  The main development areas have been the Mojave Desert and Carrizo Plain areas of the state.  But another region of California with great potential – the San Joaquin Valley – is still largely undeveloped, awaiting a commitment from state planners and regulators to prioritize the building of the transmission line needed to make development in this area feasible.  The first San Joaquin Valley area project, known as the Westlands Competitive Renewable Energy Zone (CREZ), has huge potential to contribute clean energy to meet California’s carbon reduction goals but it has encountered regulatory roadblocks. 

NRDC has consistently encouraged California regulators, utilities and investors to consider the benefits of solar development on impaired farmlands in the Westlands CREZ. This is a promising area for developers and renewable energy development because there are thousands of acres of contaminated farmland facing retirement from irrigated agriculture  with few environmental conflicts, and floundering local economies that could benefit from the much needed jobs some of these projects would bring to the area.  And every utility in the state could purchase power from this region, as could public and private utilities elsewhere in the West. In addition to the above benefits, the solar resource in this area — while not quite as good as the high desert — is excellent for photovoltaic solar power projects.  The transmission needed to unlock the area’s potential also helps remove obstacles to fully utilizing the PG&E-owned Helms pumped storage facility for both regulation and load following grid services, something that is crucially important for California’s renewable integration challenge.

Simply put, Helms can store wind energy from the Tehachapi area and use it to fill in behind the interruptions in solar generation created by passing clouds. If that is not enough, still another advantage is that generation in the San Joaquin Valley provides needed geographic diversity to the state’s renewable portfolio assuring that renewable power will be working somewhere in the state even if the wind quiets or the sun is obscured in another. Finally, transmission up the Valley would ease regional congestion and bolster connections between southern and northern California, providing substantial system reliability benefits and regional energy export opportunities.

So what’s the hold-up?

Transmission for renewable energy in California is caught up in a regulatory limbo, in which processing scores of applications for connection to the grid – not all of them viable – have tied transmission planning in knots. When California built transmission to serve specific energy generation zones like Tehachapi or Imperial County, it proved that rational transmission planning can be achieved. But the focus on the interconnection application queue and the process the California Public Utilities Commission (CPUC) uses to identify commercially viable projects meriting transmission planning has so far disqualified this promising part of the state from renewable energy development.

For a project to be viable in CPUC’s eyes, it must fulfill several criteria, foremost among them being holding a contract to deliver power to a state utility, called a “power purchase agreement” or PPA. A portfolio of such projects is presented by the CPUC to the California Independent System Operator (CAISO) which it then uses to draft statewide transmission plans. If your projects are not in the portfolio, they are not planned for, or the transmission needed is considered a low priority.

As a result: no transmission, no PPA.  No PPA, no CPUC portfolio.  No CPUC portfolio, no CAISO transmission.  This is known as the chicken and egg problem. But there are some promising signs indicating that this problem may be moving toward a solution.

Westlands CREZ Forecast Improving

Back in May, NRDC collaborated with the Center for Energy Efficiency and Renewable Technologies (CEERT) to comment to the CAISO transmission plan that generation estimates for the Westlands CREZ were far too low and that system benefits needed to be considered, not just a slavish unraveling of the congested interconnection queue. In response to our comments the CPUC and California Energy Commission (CEC) updated predictions of generation potential for the Westlands CREZ, expanding the Central Valley’s generation portfolio forwarded to CAISO for planning. Originally set at only 70 MW, the generation forecast increased to a significantly healthier 1500 MW (in three of four scenarios; in one which assumes a future with a very high penetration of distributed generation, the scenario was raised to just 990 MW). By comparison, the Westlands CREZ has a build-out estimated at around 3000 MW, enough energy to power around 2.25 million homes.  So while these changes are a welcome improvement, the new portfolio still substantially underestimates the area’s potential. CAISO will use these revised figures to conduct a Central California Study which aims to – among other objectives – assess opportunities to integrate more renewables into Central California’s transmission system.

The Central California Study results and their subsequent use to guide transmission planning away from the interconnection queue limbo could at long last open the way for transmission upgrades needed to unlock one of the most promising solar energy zones in the nation. Stay tuned.

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