E360 Fall 2019: Discussions about California's Energy Future
Each quarter, Stanford Energy Club (SEC) hosts E360—its popular panel discussion series featuring experts from industry, academia, and government—to discuss society’s most pressing energy issues. The highly anticipated E360 for autumn 2019 was hosted on November 12th and featured the topic: “California’s Energy Transition: Energy Policy's Role in Achieving 100% Decarbonization.” To discuss this matter, SEC invited experts EJ Baik, Aimee Bailey, and Ted Ko to feature as panelists and Stephen Comello to feature as moderator.
At the heart of this quarter’s panel is state law SB-100, signed into law by California Governor Jerry Brown on September 10th, 2018. The law commits California, the 5th largest economy in the world, to rely 100% on zero-carbon electricity by the year 2045. In addition to the 2045 goal, the law also sets new targets for the Renewable Portfolio Standards (RPS) for the years 2026 and 2030. According to the law, California will rely on 50% renewable energy by 2026 and rely on 60% renewable energy by 2030. SB-100 serves as a follow-up to Brown’s executive order in 2015 to reduce carbon emissions by 40 percent in 2030. SB-100 is nothing short of groundbreaking in terms of sustainable energy policy, and as a result is seen as incredibly ambitious by most and unrealistic by some. The panelists primarily discussed the challenges California is facing while trying to meet this goal, potential solutions to these challenges, and the current outlook on whether this goal is achievable or merely wishful thinking.
Each E360 expert brought their own unique background and experiences to contribute to the discussion. EJ Baik is a PhD candidate in the Energy Resources Engineering Department at Stanford, and her current work focuses on decarbonizing large scale energy systems, specifically modeling California's grid system and exploring the effect of SB-100 on California’s grid. Aimee Bailey is the Director of Decarbonization and Grid Innovation at Silicon Valley Clean Energy (SVCE), a California Community Choice Aggregator (CCA). Her current work centers around identifying and managing technical, economic, and regulatory barriers and opportunities to achieve deep decarbonization. Ted Ko is the Director of Policy for Stem, Inc. where he leads major regulatory and legislative initiatives to fully value the many services energy storage can provide and reduce barriers to efficient deployment. Moderator Stephen Comello is the director of Energy Business Innovations at the Stanford Graduate School of Business and a fellow at the Steyer-Taylor Center for Energy Policy and Finance. Stephen’s research focuses broadly on energy technology economics, policy, and innovation, through which he investigates innovation and competitiveness of low-carbon energy solutions in both developed and emerging economies.
The first topic of discussion was California’s pathway to increasing decarbonization of the grid, primarily how to reach the 2030 60% renewable target, and the associated challenges (in 2018, 34% of California’s energy was from renewables). Comello suggested that the challenges towards meeting this goal are relatively low and asked for the panelists’ response. Baik agreed with Comello, referencing her modelling of California’s energy grid. Baik is optimistic that the additional solar energy storage resources required to meet the 2030 RPS targets are on pace with the historic levels of resource build up, making the targets feasible. However, Ko and Bailey had some disagreements with Baik, stating that implementing these resources in real-life is much more daunting than it may seem. Bailey described the difficulties a CCA encounters when negotiating contracts for renewable energy systems, explaining that the negotiating stage takes many months or even years and the deal could fall-through at any time. “We do see the pathways for reaching these targets, but there‘s a lot of uncertainty when you’re on the ground negotiating these contracts,” states Bailey. Even after the contracts are negotiated, Bailey explained that it can still take multiple years to permit, build, and interconnect the project. Additionally, issues can still arise post-contract negotiation that result in project delay or cancellation, such as dependency on approval for transmission system upgrades. Ko concurred with Bailey, stating that it’s not the technical barriers captured by the academic modeling that will be the issue, but rather the procurement, contract negotiation, and regulatory barriers.
Comello then asked the panelists to comment on the challenge of achieving post-2030 decarbonization beyond 60%, namely complete grid decarbonization by 2045. The panelists all agreed that meeting the goal of 100% decarbonization presents a much greater challenge than the 2030 RSP targets. Ko provided background on the role storage plays and explained that increasing the dependency on renewables causes large issues with timing, as solar energy supply peaks at a different time than energy demand (a phenomenon commonly referred to as the duck curve). This requires “firm” energy resources such as natural gas to balance the grid. Ko explained that this is the reason storage is so important—in order to take full advantage of our renewable resources, especially solar, we must be able to store the energy so it can be used at the appropriate time to meet demand. Baik furthered this discussion by stating that although it is theoretically feasible to supply 100% of California’s energy using just solar energy and storage, it is challenging and expensive. Using just solar and storage will require capacity to be massively overbuilt in order to provide reliable energy when solar is least available (e.g., the cloudy, winter months). Baik proposed that the most practical method to reach the 2045 goals is to combine solar with more dispatchable energy sources that are carbon-neutral such as geothermal and natural gas with carbon capture and storage. Baik states “These dispatchable resources have a high capacity factor and will really play a huge role in bringing down the cost of decarbonization.” In response, Bailey stated that although solar plus storage will play a major role in meeting the targets of SB-100, SVEC also investigates alternative low-carbon sources in order to best match their load while minimizing environmental impact.
Finally, one of the most timely topics of the discussion was an audience question on the impact of climate risks, specifically wildfires, on the state’s energy resource planning. Ko responded that these extreme wildfires are causing the state to move away from long distance transmission lines since these lines must be shut down during high-risk fire conditions. However, this presents a direct conflict with the renewable energy targets as these transmission lines are used to transport solar energy across the state. Bailey agreed with Ko, stating that the fires hinder progress towards carbon-free energy targets. She explains that it becomes increasingly difficult to convince members of local governments to move away from natural gas and towards all electric new-construction when transmission lines are frequently being shut down. Bailey added that it is becoming increasingly clear that CCAs like SVEC will have to transition from mitigation strategies to adaptation strategies in order to deal with the frequency of these fires. Bailey said “There’s still a lot we need to figure out very soon due to the short-term impacts being felt. We need to find solutions that can be implemented to help everyone, including the most vulnerable members of our community.”
The insight provided by these expert panelists on California’s energy future was truly fascinating for audience members, and SEC cannot thank them enough for sharing their time and knowledge with the group. In total, over 80 students attended this quarter’s E360 panel, marking another successful night of learning, discussion, and collaboration brought to you by the SEC Events Team!
Photo credit: Dennis Schroeder (https://commons.wikimedia.org/wiki/File:Solar_panels_in_the_desert.jpg)