Ed Smelloff – Clean Power Campaign
Assembly Hearing – 8-25-2022
https://www.assembly.ca.gov/media/assembly-utilities-energy-committee-20220826/video
At minute: 01:53:01;23
Re: SB 846
Diablo Canyon powerplant: extension of operations
leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202120220SB846
Ed Smelloff (00:03):
Good morning, Chairman Garcia and members of the committee. Thank you for the opportunity to address you this morning. I’m Ed Smelloff. I’m representing the Clean Power Campaign, which is a coalition of environmental organizations and clean energy technology providers. So I want to make three points today. The first is related to reliability. The second, greenhouse gas emission reductions. And the third are some short-term suggestions on what can be done to improve reliability and reduce greenhouse gas reductions.
I completely agree with what Dr. Quirk said earlier this morning, we are seeing more severe, more frequent impacts of climate change. That is patently obvious. No one can deny that. However, I do want to make a point that if you look over the past 15 years at peak demand in California, it’s actually decreased. The peak demand for the Kaiser system occurred in 2006, it’s gone down by 12 and a half percent for the peak in 2021.
And it has not exceeded that yet in 2022. And I think we know the reason why that happened. It’s the extraordinary policies of California to invest in energy efficiency, load management, and behind the meter solar generation and battery generation. We’ve been able to manage the load in cooperation with the citizens of this state so that we haven’t increased demand on the peak, actually has a name it’s called the Rosenfeld Effect named after Art Rosenfeld, the illustrious scientist and former commissioner at the California Energy Commission has been promoted.
Karen Douglas has been a major champion of this and is deserves a lot of credit for putting this in place over the last decade and a half. It’s bipartisan. It’s been supported by Republican administrations and Democratic administrations. Governor Schwarzenegger had a key role in this when he initiated the California Solar Initiative. And so we know we have the tools to manage peak load it’s in our DNA.
We need to double down on this and I’ll have a few suggestions at the end of my presentation. Secondly, I completely agree that electric system reliability is a public good. It is a shared responsibility of all load serving entities across the state. Now, the framework for reliability in California is called Resource Adequacy, and it’s a delegated framework to specific load serving entities.
They are responsible for maintaining sufficient capacity to meet the loads within their jurisdictions. So for instance, where I live up in Trinidad, California, it’s the Redwood Coast Energy Authority where I used to work in San Francisco. It’s San Francisco Clean Energy, where I worked for developing solar power plants in Richmond. It was Marin Clean Energy. Each of these many entities, and there’s about 40 have the responsibility for Resource Adequacy. It all has to add up so that we have an adequate amount of excess reserves to keep the lights on in almost all occasions.
Now, reliability is a trade off against affordability. You just can’t have an infinite amount of resources and assure that the lights will never go off. We typically have developed a standard, and Karen Douglas mentioned this it’s called loss of load expectation. And the standard is once in 10 years, and that’s pretty much across the United States. So there’s a little bit of misinformation here that standard is no longer appropriate.
And perhaps we should revisit. Maybe it should be one in 20 years, but the kind of ad hoc approach that the administration is used in showing you that we’re at greater risk, really doesn’t undergo the kind of rigor that a probabilistic analysis done by the Public Utilities Commission would do. So, yes, it is important to understand what are the inputs and assumptions that go into these kinds of studies and they are changing because of climate change.
We are seeing more intense heat waves. We are seeing the impact of reliability on thermal power plants because of the lack of water for cooling them. So this does have an impact we can put together all of the assumptions that go into that, but the argument that we are in a severe reliability crisis, I don’t think really bear scrutiny. Last year, the Public Utilities Commission adopted the midterm reliability order.
And they ordered that the state, all of the load serving entities in proportion that their responsibilities procure 11.5 gigawatts of net qualifying capacity. And that is enough to more than replace the ones through cooling plants, the thermal plants on the South Coast, as well as Diablo Canyon. And in fact, the Public Utilities Commission said, “We’re going to move what’s called the Planning Reserve Margin,” which is the excess capacity that you need to have to assure reliability from 15% to 20.7%.
So they recognize that we are seeing more uncertainty in weather and other issues. So we need to have a higher reliability standard. So it is appropriate that we procure this 11.5 gigawatts of new resources to keep the lights on. And it will do that. It’s actually meeting a higher standard, but I do want to mention, and I think there’s something that the administration did get right in their presentation is that, if we retire Diablo Canyon at this time, we will see an increase in greenhouse gas emissions over a certain period of time after that.
In order to prevent that from happening, the 11.5 gigawatts is not going to be sufficient. We have to order additional. We have to have a procurement order to get additional clean energy resources in place, including clean firm energy, geothermal energy, which is, as we think about this, we do need clean firm energy, but a 40-year-old power plant has a lot of potential problems.
And a lot of unknown unknowns there. When we’re building a new set of geothermal power plants and other clean firm energy, this is going to be the future. It’s going to be what we can rely on for the next 20, 30 years in place, but in order to do that, and this is a really significant point I want to make. And it’s where we’ve dropped the ball in California.
We need to build new transmission so that we can bring that power from the North Coast, from the offshore resources off Humboldt County, from Imperial County, from the desert in Riverside, in San Bernardino counties into the load centers. It’s going to require a significant amount of investment in new transmission. We need to get started now.
I am concerned that this focus on the Abo Canyon and its extension is crowding out the necessary policy decisions that we need to make, to assure that long term, we’re going to be reducing greenhouse gases. And we can do this with union labor building these transmission lines and new projects. I will and my friend just wanted to address some directly on that.
So I wanted to the assembly has put together a package. I don’t know all of the details in your package for addressing climate issues, but I’ve read the bullet points. And I think there’s some very important initiatives that you’ve put together. And the reason I say this is because I do want to mention one thing, and it is an important point. There is going to be a shift in cost from the Northern California load-serving entities to the Southern California load-serving entities.
Rates are going to go up for residents of Southern California and San Diego. They may go down a little bit because of the way that this agreement has been structured, but it is not, there are going to be differentiated impacts. It’s not going to do anything specifically to address the equity issues in California, the climate equity issues. And regardless of what happens on Diablo, I think this needs to be a priority that needs to be done immediately as we’re addressing the reliability.
And I think there’s some very attractive features of what you’ve put together in the assembly plan. And I’ll just support, the one is an equitable community-based solar and storage. Solar and storage can be built very quickly. I’ve done that when I worked for SunPower Corporation, we can get these projects built, particularly the ones on the local grid on the distribution system. We can get them built in less than a year.
This is going to be a new strong resource. I do want to correct one minor mistake that Ms. Douglas made earlier on the Inflation Reduction Act. Now, provides a production tax incentive and investment tax incentive for standalone storage. So we can add storage to existing solar projects. They can be charged both by the solar project and by the grid, and capture the federal tax benefits.
So we’ve really incentivized the storage being built across the state. Obviously, investors throughout the world are seeing what happened with the Inflation Reduction Act. And there’s a lot of money pouring into technologies to be able to address climate change. But let me get back to the equity issues. So you have this community-based solar and storage, $240 million. You have what I think-
Speaker 1 (10:44):
Sure.
Ed Smelloff (10:45):
… also there’s a proposal to have grants for an Equitable Building Decarbonization program that would install efficient appliances, lighting, insulation, and other infrastructure directed to low income customers in California. These are things that need to be funded, which I think, you could make a strong case that these are better uses of the $1.4 billion than a five-year extension of Diablo Canyon.
And there is a need to put this money to benefit the people who have not benefited as much from the Rosenfeld Effect. We need to make sure that this is equitable, that there’s opportunity for low income families to have solar in their communities, on their households to invest in the energy efficiency and load management technologies that are available. So I think there is a better way, and I really thank you for the opportunity to address the committee today. And I would welcome any questions later.
Thank you. And I know that our colleagues here on the [inaudible 00:11:55] are eager to ask questions and we will get there very shortly. Mark Toney is a next presenter.
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Q&A
At minute: 02:41:24;06
Ed Smeloff (00:00):
The CAISO reports that between November of 2020 and April of 2022, which is the period of the pandemic, a total of 2,360 megawatts of new grid-connected storage projects have been added and are operational on the grid. So we now have a total as of August 1st of 3,344 megawatts of storage available. In the interconnection queue, there’s an order of magnitude greater than that, particularly in the most recent interconnection so there is no shortage of opportunities to get there. All of the load-serving entities are currently they’ve put out to bid procurements, competitive solicitations, many are in active negotiations.
What is not really transparent at this time, and I’m hoping that the administration has that, is the milestones on each of the many projects, because a lot of this decision hinges on whether or not by the summer of 2025, the 11.5 gigawatts, perhaps is a little less than that because it may take longer for the geothermal and long duration storage can come online and be available when Diablo is not available in 2025.
Well, [inaudible 00:01:21] you bringing that up because Mr. Singh brought it up also this issue around interconnection. My understanding is there’s 40,000 to 60,000 megawatts waiting this second to be interconnected. What’s stopping that [inaudible 00:01:35]?
So not all of it will be connected. That is vastly in… So what’s stopping that is the studies that need to be done on deliverability network upgrades. So when you apply for an interconnection, the CAISO and the participating transmission owner does detailed studies, power flow studies on the impacts of that. That’s taken longer than should be. It could be corrected by simply more staffing.:
Then there is a need, in some cases, to actually do upgrades to the transmission system, perhaps reconductoring maybe an additional transformer. Different pieces of equipment need to be installed. That’s where we’re seeing delays in the process that aren’t sufficient to get these resources, so real-
Mr. Tang (02:22):
So I guess what do we need to do to speed that up? Because obviously that, to me, seems like low-hanging fruit where we could just be… I mean…
Ed Smeloff (02:29):
Well, I think one thing would be to, and so this is sort of the intangible about this decision is there’s so much of energy in the C-suite of an organization and what are they going to focus on doing and where are they going to get the additional staffing? So it really is in PG&E’s executive’s Southern California Edison, San Diego Gas and Electric, and the CAISO to really staff up adequately and to go through this process.
There’s also, this is sort of a little bit of a different issue, we kind of double permitting on upgrades to transmission, once at the CAISO, where they make a determination of need through their transmission planning process and a second time at the California PUC through its CPCN process, its certificate of need and convenience. So we need to streamline that. I think we need to find that these projects are needed only once and then move them through the permitting process more quickly.
Mr. Tang (03:33):
I think Mr. Stern wanted to answer that question, too.
Mr. Stern (03:36):
Well, thank you. Thank you, Mr. Tang.
Mr. Stern (03:39):
So I just wanted to add, I think Mr. Smeloff actually identified some of the problems, but I want to make it clear this is our work. We’re as frustrated as anybody about the lack of this pace in which interconnection is made.
Mr. Stern (03:54):
At the same time, I think the real problem is the way we see it and what I mean we, I mean porphyry 5NQ is that we’ve already missed the boat. There isn’t a way to accelerate this in a meaningful way to build these projects. Because once the decision is made to either build new transmission resources or reconductor expand capacity on existing, it’s still years away and then you do run into materials and equipment. Because that’s also part of the opportunity here is to implement the new technology that’s coming online so that when we do increase capacity and when we do make these decisions, we can expand the transmission system to accept much, much more renewables and clean energy in the future.
Mr. Tang (04:46):
Thanks. I wanted to ask Mr. Smeloff and then go back to administration with the same question.
Mr. Tang (04:51):
With the charts the administration, I think, provided, you’re looking at five to six days or seven days in September that are going to be major issues. Is this really a base load issue? Or this is just a peak, a peak load issue, meaning obviously if it’s a base load issue, that’s why you would need something like a Diablo. But if it’s a peak load issue, could we use something that’s more flexible that you can ramp up, ramp down for those particular days?
Ed Smeloff (05:24):
Well, reliability is always a peak issue and it has some varying components to it, both capacity and energy for charging the batteries. This will be more of an issue in the future.
But typically we are most concerned about the months of August and September and we’re concerned about the hours now as the sun is setting that we have sufficient capacity, particularly storage capacity that can ramp fast, that can modulate very quickly to address the needs because we have to balance the system second by second. Nuclear plant doesn’t do that. Other resources do and batteries do that very, very well because they can quickly adjust to what the load requirements are.
Mr. Tang (06:10):
Thank you. I don’t know if the administration wanted to-
Speaker 4 (06:16):
[inaudible 00:06:16] thing, sorry-
Mr. Tang (06:16):
Please.
Speaker 4 (06:16):
Because the hybrid format [inaudible 00:06:17] awkward if I could just add in on the interconnection question that you asked previously.
Speaker 4 (06:22):
I think Ed actually touched on some specifics that are causing delays, but I will say from the generator side of things, we have been experiencing persistent interconnection delays from transmission operators and not having the transparency as to why and when things are going to come online.
Speaker 4 (06:39):
One good advancement that occurred amongst the agencies and with the task force that the governor’s office mentioned today and with the leadership of people like CPUC president Reynolds is, frankly, a measure-and-manage approach of tell us what’s going on with every interconnection, tell us where you’re at consistently. That is a step in the right direction. That hadn’t been happening kind of self-regulatory, shall I say, by the transmission operators before, but things are not quite transparent as to why the delays are happening. We get COVID and supply chain hand waving, but that’s obviously not enough.
Speaker 4 (07:13):
What this does it holds back solar storage resources that could provide essential reliability functions. It holds back gigawatts scale-wise of those resources that could be online today or tomorrow that are just way behind because of that interconnection problem. So I do really want to spotlight that issue and it cannot be an issue of it’s the way it is. It’s tough to solve. That’s not sufficient and we’re squandering resources and procurements that are in place that can come online and provide the ROA we all need.
Mr. Tang (07:49):
Now…