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Getting It Right – Pitfalls and Promise of the Energy Transition

Transitioning to a cleaner energy future is a goal embraced by the Paris Climate Accords, the new Biden Administration, the European Union, and, at last count, some 100 countries that have either already pledged to get to net-zero emissions by 2050, or are currently working on policies to reach that target. Imperative though it is, under the best of circumstances that clean-energy shift will be extremely challenging. But it is particularly fraught to be making the switch from dispatchable nuclear and fossil fuel plants to a cocktail of still-evolving intermittent renewable resources during this time of climate change-induced weather uncertainty. We are already experiencing the downside risks of this process – most dramatically in blackouts and power disruptions around the globe. The lessons emerging about how to model for weather extremes and manage this transition with adequate, reliable energy backup are critically important and should be on everyone’s radar.

Just last week a Bloomberg headline blared starkly “The Day Europe’s Power Grid Came Close to a Massive Blackout”. It outlined an event earlier in January that nearly caused massive blackouts across the European power grid stretching from Lisbon to Istanbul. That incident forced a temporary splitting of the grid into two because of the threatened inability to maintain frequency between the northwest and southwest regions. The reason for that frequency instability was traced to biting cold that caused power demand to surge across western Europe on January 8, and ultimately linked to problems with a transformer in Croatia. While the problem was contained, it nonetheless resulted in “the equivalent of 200,000 households losing power across Europe” and power supply cuts to industrial sites in Italy and France.

Although this event was not directly tied to a surge in renewable power, the incident highlights grid stability challenges as Europe moves from large baseload coal, gas and nuclear stations to thousands of intermittent solar and wind units. “Large amounts of intermittent electricity create huge swings in supply which the grid has to be able to cope with”, the Bloomberg report observed. The issue isn’t confined to Europe. Australia has also had challenges in its transition to a cleaner power grid as well. Wind power was blamed for a blackout in 2016 that cut supply to 850,000 homes”, and that country has since been aggressively pursuing additional energy storage and megabattery options. “The problem isn’t posed by growing green electricity directly but by shrinking conventional capacity…the upshot is a gap in secure power generation and grid balancing that must be fixed” according to the chief energy modeler for the Institute of Energy Economics at Cologne University.

That’s what happened last summer when power outages rolled through California during the state’s record-breaking heatwave, leaving the world’s 5th largest economy unable to keep the lights on for millions of customers. That stunning and high-profile failure threatened outages to as many as 10-million California customers, with the worst outcomes avoided over the course of four days by triggering demand reduction mechanisms and asking for voluntary curtailments in energy usage both by industrial and residential customers.

The California blackouts were triggered by unanticipated weather extremes and a litany of planning miscalculations, technical failures and commercial problems. These are detailed in a just released “root cause analysis”. In essence, the unexpected high temperatures over multiple days last August meant energy demand skyrocketed and stayed high into the evening hours, with little overnight cooling. This was region-wide and affected both California and neighboring states. High temperatures drove up power demand and worsened the power supply challenge in the “net peak” evening period when both utility solar and behind-the-meter solar production declined but demand for air conditioning and other energy load remained high, and that remaining load returned to the grid. Other problems included the region-wide nature of the heatwave that left the state unable to wheel-in power from neighboring supply sources, and shortages of baseload hydro power and wind generation due to drought conditions and other climate impacts. For solar generation, high clouds caused by a storm covering large parts of California and smoke from active fires during the period reduced large-scale grid-connected solar and behind-the-meter solar generation on some days, leading to increased variability. There was also a shortages of natural gas-fired power due to the “de-rating” of the power plants at such high temperatures, at least one plant outage, and the recent retirement of some 5-gigawatts of dispatchable generation since 2018, while only adding about 2,200 megawatts of “non-intermittent” generation since then. Finally, there were failures of planning, demand modeling and day-ahead energy scheduling and convergence bidding.

California’s energy planners say that their efforts are now focused on preparation for the coming summer and preventing a replay of last summer’s blackouts. They stress that while they are making efforts to bring additional capacity online – both for energy production and storage -- there will continue to be vulnerabilities as the system transitions through additional retirements of natural gas plants by 2023 and the Diablo Canyon nuclear facility by 2025. To that end, the Public Utilities Commission issued a proposal directing the state’s investor-owned utilities to contract for additional capacity -- including from existing natural gas power plants – that can serve peak and net peak loads this summer. That has already generated pushback from renewables and environmental advocated concerned that contracting for additional gas capacity will threaten the state’s clean energy goals. Gas industry groups have responded that “a reliable grid is critical to ensure continued public support for clean energy goals” and “further blackouts could affect popular support for both renewables as well as California's zero-carbon ambitions”.

It is hard to overstate the importance of these lessons coming from Europe, California, Australia and elsewhere. Climate instability and extremes are changing energy demand profiles at the same time that our ambitious plans to decarbonize power supplies have led to the retirement of dispatchable, baseload fossil power – replaced by increased levels of intermittent renewable power sources. All of that is fine and no one is suggesting that the transition to cleaner energy sources should not push forward. But what is clear is that it is a very complex transition. And harder than we thought. The key is doing it in a way that provides adequate backup power and considers all the variables that can and are going wrong, especially in this new world of weather extremes, natural disasters and unprecedented change.

This is brave new territory and lots of issues are converging. Just last month, on January 15, a headline blared: ‘Thousands of SCE customers at risk of power shutoff as Santa Ana winds, hot weather prompt warning of ‘high fire danger’. The article cited temperatures that reached a high of 94 degrees in the L.A. basin and, in combination with high winds, spawned isolated fire incidents and the unprecedented move for that time of year of utilities cutting power to residents to prevent wildfires. And while there are certainly differences between the causes of the blackouts in August and this January situation, the stark reality of this extreme temperature in January is a vivid reminder of the new environmental excesses we face.

This might be all the more reason to redouble our efforts at decarbonization, but it also highlights the challenges and the need to get the transition right – to pay attention to lessons learned and watch all these changes carefully. These include increasing the acquisition of battery and other storage, increasing diverse supply-side generation capacity, revising and updating reserve planning to take into account not just “gross peak” but “net peak” demand (after solar resources are lost in the evening), investigating new rules for how market planning and bidding mechanisms are implemented, changing our thinking about weather extremes and modeling, and evaluating new approaches to using demand-response (load reduction) tools. This is new territory in a far less predictable world than the one we’ve known previously. There are lots of converging issues, lots of lessons to be learned, and the need to stay on top of those changes. This is not going to be simple.

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