United States California comprehensive transition experience in renewable energy

Polaris solar PV net news: Gold Coast, located 300 kilometres northwest of Los Angeles, California at the Diablo Canyon nuclear power plant is the only nuclear power plant in California, is also the largest single power plant, provides California 8.6% of electricity. But in June this year, the State’s largest power company Pacific gas and electric (Pacific Gasand Electric Company,PG&E) announced that the plant would shut down in 2025.

Past, the closure of a large power plant is usually associated with the construction of a new power plant. But as technology advances, and changes in the economic situation, as well as the State of California requirements for renewable energy, the situation has changed. By improving energy efficiency and developing renewable energy to replace large, centralized conventional power plants is a booming trend, close the Diablo Canyon nuclear power plant was a microcosm of this trend. In California and elsewhere, demand side/distributed energy resources is rapidly becoming an important part of power system planning, and creating exciting new business opportunities.

Establish a low-carbon energy system

More than 10 years ago, the United States power companies around renewable energy and user-side resources that were skeptical, and some even adopting a hostile attitude. Now they are gradually recognizing that wind and solar power, energy efficiency, demand response, solar and energy storage cell value. PG&E TonyEarly, Chief Executive, predicted: “centralized power plants of California electricity rate will continue to drop. “It is true that distributed generation facilities already occupy an important position in the power system in California, and similar cases will occur in other parts of the world.

Case in California shows a transition from the old energy system for cleaner, more cost-effective path to the new energy system. In California, in order to speed up the transition, regulators issued a strong policy in transition from electric power companies, regulators and competitive market in close cooperation with the power companies, new technologies and new business models to market. And it is in the process of reform in China, and similar changes in the. The shift to cleaner distributed generation will have a huge impact on climate, and which opportunities are even greater.

Rocky Mountain Institute (Rocky Mountain Institute,RMI) found that the opportunity first of all from the economic benefits in the future. A long time, when meeting new demand for electricity, energy efficiency is the overriding consideration in getting price advantage. In terms of peak demand for electricity, and demand response as an alternative to building centralized power generation resources, strong and also have a similar advantage. Cost of wind power and solar power technology continues rapidly declining only by conventional methods the new power plant gas power (because the United States gas-rich, inexpensive) cost can be compared with them. In addition, the power company began to find storage batteries can provide real value for the grid. Although the technology of energy storage batteries are still expensive, but costs are rapidly declining.

These resources (energy efficiency, demand response, energy storage, renewable energy) is not a new discovery, but power companies have just started using them. Many resources, especially energy efficiency and economic advantage, has not been widely used. Therefore, the California policy makers to set clear direction to promote the State’s low-carbon development. There are two options: first, the mandatory measures to improve energy efficiency and renewable energy purchases, second, integrated resource planning process.

With mandatory measures to develop new sources of energy

California requires power companies in achieving 50% electricity come from renewable sources by 2030, and will improve energy efficiency by 1 time. While enforcement measures are effective, but policymakers must support mechanisms to assist power companies to accomplish these goals. For example, requiring power companies to improve energy efficiency could affect its revenue (generally, power companies are selling more and more profitable). This causes the power company may only complete the mandatory energy efficiency standards, and does not help the user to minimize energy consumption. But in California, regulators and company sales revenue decoupling, power companies are no longer worried about improving energy efficiency would reduce revenue. Regulators established a fair rate of return for power companies, the power companies obtain such income does not depend on the amount of electricity sales. A similar pilot project in Shenzhen, China, and is expected to be opened in the country.

To further strengthen incentives, California by industry-specific mandatory measures in support of the overall energy efficiency targets. All new appliances sold in the State of California has implemented strict energy efficiency standards and stricter than national standards for building energy efficiency standard, manufacturer and apply the new standards to the building industry. After applying the new standards, with the improvement of electrical appliances and energy-efficient construction price, buyers can quickly recover the cost (generally 3 years). They already have economic benefits, missing only is the catalyst that can drive the market forward, and California played the role of wise policy.

Similarly, China is also improving energy efficiency standards for buildings and appliances. This will bring enormous business opportunities, new, more efficient products to enter the market, challenging the traditional industry leader (as the LED lighting market in the world). In addition, green building has proven attractive to tenants, prices can be higher.

Integrated resource planning

On strengthening incentive and compulsory mechanism, California, using an integrated resource plan (Integrated Resource Planning,IRP) process, helping power companies to improve energy efficiency and develop renewable energy. Integrated resource planning, the power companies to study the future power needs of users, that determines which new resources are used to meet these needs. Power companies must prove that they have assessed all options (including energy efficiency, renewable energy and demand response), and chose the least costly resources. Investment wisdom of this process to ensure that the power companies, while ensuring that the user electricity prices remain low.

Integrated resource planning focus on long-term development. In California, this process helps to the year 2025 PG&E the company shutting down Diablo Canyon nuclear power plant decision.

Integrated resource planning PG&E show, due to energy efficiency improvements and a rooftop solar development, user demand will not grow further, so power companies do not need to add more capacity. In addition, California’s renewable energy mandatory requirements do not include nuclear power, this means that the Diablo Canyon nuclear power plant did not help the company complete the mandatory requirements in the State. PG&E integrated resource planning, proven energy efficiency, renewable energy, demand response and comprehensive utilization of energy storage technology to meet user demand for electricity, and continued to run the Diablo Canyon nuclear power plant compared to this method of comprehensive utilization of more economic benefits. It has enabled PG&E to the Diablo Canyon nuclear power plant decommissioning trust installed capacity 2.24 million-kilowatt.

Integrated resource planning PG&E specific measures are as follows:

First of all, in front of the Diablo Canyon nuclear power plant shut down, the single-minded focus on the advantages of the development of energy efficiency technologies;

Next, at the Diablo Canyon nuclear power plant closures, will develop resources net zero greenhouse gas emissions (the most likely scenario is the comprehensive development of energy efficiency, demand response and renewable energy);

Finally, the state mandated and voluntary targets to assess company performance, determine necessary in order to attain the ultimate goal of the procurement. In addition, if you need any other resource integration of the investment net zero greenhouse gas emissions (such as energy), these resources should be purchasing.

At this stage, type help PG&E to adjust the company’s development path. Another nuclear facility in California San Onofre nuclear power plant in 2013 with repair and maintenance costs of security risks on shut down, the practicability of the method has been demonstrated. When the San Onofre is closed, the power company found 1.4 million-1.8 million-kilowatt generation resources to replace the closed capacity. Power company does not require the developer to submit a development plan for a particular project (such as solar power or wind power project), but in the specific capacity has not been determined, and use the quote request (RFOs) mode, allowing all forms of technology (energy storage, energy efficiency, demand response, biomass, and so on) to compete, meet the needs of power companies.

In order to ensure the quote request process conforms to standards emission requirements, total installed capacity of electric power company policy required, 150,000-kilowatt of electricity must come from the “priority resources”, that is, distributed resource net-zero emissions. Add “priority resources” requirement to help Southern California Edison Company (invented the model of electric power company) improve their productivity. It also ensures the proprietary quote request opportunities for emerging technologies, enable power companies to adopt these new methods to meet the needs of users.

Ensuring economic

Quote requests to many new technology companies to enter the market, fill the gaps left off San Onofre. Most noteworthy is that as a Nest (manufacturing of programmable thermostats), Stem (operation battery for energy storage systems) and Opower (exploitation efficiency of user engagement platform) company has completed many similar projects across the country. Compared with the construction of new power generation projects, these companies will be able to lower costs and faster application because they are modular, more likely to be incorporated into the grid have been built. The new company (all established within the last 9 years) now has a very strong competitive edge, Opower valuation of $ 550 million, Stem received $ 27 million in a second round of financing investments, and the Nest is acquired by technology giant Google for $ 3.2 billion.

Similarly, China is also planning its centralized, structured similar to the power sector restructuring. Beijing recently announced that it would stop approving new coal-fired power plants, a move that sent a clear signal to the outside world: the network planning process with the national low-carbon development and peak matches the target is critical. It takes time to full implementation of the integrated resource planning in China, and Chinese leaders also worry about low-carbon transformation possibly affect our economic development.

This worry, quote request method is a very effective way, it is able to reduce the cost of technology to stimulate innovation in the private sector. Quote request or to promote new business development, to help them enter the competitive power market. These companies to quickly grow their businesses, create new jobs for the State, and local levels of GDP. In California, a clean technology revolution has brought huge economic benefits. In 2014, California has attracted half of the world’s clean technology venture investment (US $ 5.7 billion). It actively promotes the United States development of the most advanced energy industries, and provides 430,000 jobs continued to increase.

Of course, this case is not just about economic growth, along with the Diablo Canyon nuclear power plant shut down, many people will lose their jobs. In order to solve this problem, the PG&E planned for Diablo Canyon nuclear power plant employees to provide retraining and re-employment services, and for the implementation of compensation mechanisms make up for the lost revenue.

Although the details and not directly related to the technical feasibility of providing electricity, but are essential to any well-planned transition process. In the development of any new resources, whether it’s large nuclear or hydropower facilities, or client application or solar panels for energy efficiency, support local leaders is critical, may make any transition becomes more smooth. (Cyril Yee for the Rocky Mountain Institute Director, Daniel Wetzel as the senior consultant)

Original title: California comprehensive transition experience in renewable energy

Posted in Solar Charger.