Abstract
Author(s): Gerke, Brian; Gallo, Giulia; Smith, Sarah; Liu, Jingjing; Alstone, Peter; Raghavan, Shuba; Schwartz, Peter; Piette, Mary Ann; Yin, Rongxin; Stensson, Sofia | Abstract: In response to the imperative of the climate crisis, California is in the midst of deployment of low-carbon energy generation and electrified heating and transportation at a rapid pace. In 2018 the grid managed by the California Independent System Operator (CAISO) was already generating 26 percent of its power from non-hydro renewable sources, with an additional ten percent hydroelectric power; and with SB 100, California statute now sets a target of 100 percent carbon free electricity by 2045. Maintaining this fast pace of decarbonization requires action across multiple domains on the grid from generators to loads. This study describes new findings on the scale of the opportunity for enabling load shifting as a form of demand response (DR) in California, as part of this renewable energy transition. We use the shorthand term Shift to refer to this potential load-shifting DR resource. The operating principles for the electric power system mean that achieving California’s renewable energy goals requires careful planning to build and operate the system in a way that maintains reliability at low cost. The most fundamental of these principles is that generation and demand need to be balanced at all times. Historically this has meant building adequate flexible and dispatchable generators that can be operated to match inflexible and uncontrolled loads. Meeting large fractions of demand with variable renewable energy (VRE) generation introduces a new paradigm, exemplified by the “duck curve” in California. In the times of year it occurs, the duck curve illustrates the net electricity demand that must be met by non-VRE generation; it has sharp peaks in morning and evening (the “tail” and “head” of the duck, respectively) and steep transitions to a deep midday trough (the duck’s “belly”) resulting from solar generation. Balancing the duck curve is a key priority for integrating increasing levels of VRE on the California grid. Shift DR is one of several renewables integration planning approaches that can work together to balance a high-VRE system. Others include “overbuilding” renewable energy with the intent to curtail during times of surplus generation, building and operating transmission lines to integrate regional systems, and building and operating energy storage to match generation with loads. Based on the 2019-2020 Integrated Resource Planning (IRP) model for California1—which did not consider Shift among its resource options—the least-cost pathway for achieving California GHG goals includes all of these other approaches. The Reference System Portfolio that is used to inform utility planning includes development of energy storage that is operated to serve about 10 GWh of consumption on the average day in 2020, 70 GWh in 2030, and 400 GWh by 2045. There is also significant curtailment of VRE in this least-cost portfolio, with 4 GWh on the average day in 2020, rising to 15 GWh by 2030 and 100 GWh by 2045. Throughout this report we compare the Shift resource to curtailment and storage as benchmarks, providing context for the results we report related to the quantity, cost, and performance of Shift. The timing of evening peak and curtailment defines times when load shifting is most valuable and would likely be used. The quantity of curtailment and use of storage to balance the system represent how much Shift could be valuable at the upper bound if Shift is inexpensive. The cost of energy storage is also a useful benchmark for the cost of Shift because it is the most comparable “competing” technology option; we therefore use the cost of storage to set a reference price level below which Shift will be most broadly cost competitive.
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