A new report by the National Renewable Energy Laboratory (NREL) prepared for the California Independent System Operator (CAISO) highlights the enormous benefits awaiting Californians through expanded Western regional clean energy cooperation, from lower energy costs and reduced emissions to increased transparency, enhanced energy reliability and accelerated progress toward the state’s 100% clean energy goals.
This concept is backed by a coalition of advocates called “Lights On California,” which includes SEIA, the Environmental Defense Fund and others.
“The studies reviewed, while varying in focus, are consistent and demonstrate that California’s goals for renewable energy and greenhouse gas reduction can be achieved more quickly and with less cost to Californians through expanded regional cooperation,” the NREL report concludes.
The final report, “The Impacts on California of Expanded Regional Cooperation to Operate the Western Grid,” was requested by the California State Legislature last year with the unanimous passage of ACR 188. The resolution specified the report summarize the latest research on the impacts of expanded regional cooperation on California — and how an RTO in particular could help the state advance its energy and environmental goals. RTOs are independent membership-based, non-profit organizations that operate multi-state electricity grids, oversee regional wholesale electricity markets and provide reliability planning for their region. Seven RTOs in other parts of the country cover about half of U.S. states and meet two-thirds of national energy demand. The West is one of the only regions without one.
NREL’s report highlights a “consistent narrative” in existing research on the benefits of regional energy cooperation:
The measurable benefits of regional cooperation include production cost savings, resource capacity savings, and emission reductions.
Qualitative benefits include greater transparency, increased stakeholder participation, and more efficient use of the transmission system.
Regional cooperation can enhance reliability, especially under stressful conditions that impact the availability of some generation and transmission assets.
A geographically larger operational footprint tends to yield greater resource and load diversity.
An RTO, because it is a more comprehensive structure for cooperation that optimizes a wider array of grid functions, tends to yield greater cost savings and grid flexibility than more limited forms of cooperation.
Larger and more comprehensive structures also expand the types of issues that need to be addressed, such as governance and principles for allocating the cost of new transmission.
More limited forms of cooperation also yield benefits such as cost savings, even though the benefits might not be as large as they would be with more comprehensive frameworks for cooperation.
“In order to fully decarbonize California’s grid, the state will need a lot more clean energy than we have today,” said Michael Colvin, director of the California Energy Program at Environmental Defense Fund. “This report clearly shows a western regional market can help keep the grid affordable, reduce emissions, ensure reliability and prevent blackouts.”
NREL concludes that an RTO would help the state achieve these goals by bringing down the cost of both clean energy production and transmission. The NREL report cites one recent study that found an RTO of 11 western states would save Californians up to $563 million in annual energy bill savings, create 138,700 new high-paying jobs (averaging $91,000 in annual compensation), produce $21.7 billion in economic growth and accelerate 470 MW of new clean energy construction (enough to power nearly 90,000 homes).
The report also concludes expanded regional energy cooperation is vital to maintaining the reliability of California’s energy system, with benefits including:
Less curtailment of solar and wind resources due to congested transmission paths
The ability to move excess wind and solar power elsewhere in the region when local production is high and demand is low
More operational flexibility to manage the variation in solar and wind output
Better grid resilience (the ability to mitigate or recover from extreme weather events and other major outages).
“California needs a lot more renewable energy than we have today, and we must find a way to deliver it to every community at a lower cost,” said Jan Smutny-Jones, executive director of the Independent Energy Producers Association, “This report shows California’s leaders must think beyond our borders. States across the West share California’s clean energy goals, and it makes sense to work with our neighbors to achieve them. Going alone is a much harder and more expensive path. The time has clearly come for regional clean energy solutions.”
Read the full National Renewable Energy Laboratory report here.
News item from Lights On California