Solar power is popular nowadays as a “renewable,” non-polluting energy source. It helps California comply with AB32, the Global Warming Solutions Act of 2006, which mandates a 25 percent reduction in greenhouse gases in the state by 2020.

“Even on short winter days, California is breaking solar energy records,” declared environmental writer Chris Clarke on the website of KCET, America’s largest independent public TV station, which broadcasts across Southern California.

Clarke was jubilant that solar power had generated more than 2,800 megawatts of electricity just before noon on that day. There also was 1,898 megawatts of rooftop solar power generated on Dec. 4, but that was for the entire 24-hour day.  

Archived data for Dec. 4 is not available from the California Independent System Operator’s (ISO) website. So I double-checked the amount of solar power flowing into the state energy grid for Thursday, Dec. 11.  The numbers tell a different story.

Having served on the California Energy Crisis Task Force in 2001 for the Metropolitan Water District of Southern California (to which I currently have no affiliation of any kind), I believe I can competently double-check the claims about a major breakthrough for solar energy in California.  To understand the numbers that follow, it should be understood that a megawatt is enough electricity to power about 1,000 homes for one hour during non-peak load hours and a kilowatt is enough for one home for one hour.

Solar power marginally helpful during mid-day

During the midday hours from 2:30 to 5:30 p.m., it was true that solar power was producing from 6.77 to 8.15 percent of demand, as shown below:

Solar Contribution to CA Power Grid for Dec. 11 Mid Day Hours

Solar power not helpful during late hour peak load in winter 

The problem is that, in California, the peak demand for electricity comes late in the day, from 6 p.m. to 9 p.m., especially on cold winter nights such as Dec. 11.  During those hours, solar energy only contributed 5.07 percent at 6:30 pm, 1.48 percent at 7:30 pm, and zero percent from 8:30 pm onward, as shown below.

Solar Contribution to CA Power Grid for Dec. 11 Late Peak Hours

On December 11, there were two peaks in energy demand: one at 6:30 p.m. at 31,500 megawatts and another at 9 p.m., also at 31,500 megawatts.  The demand for electrical power at 7:30 p.m. was the same as for noon: 27,000 megawatts.    

During the entire 24-hour day of Dec. 11, solar energy contributed only 1.6 percent to the state power grid.

No demonstrable smog reduction

Moreover, there was no demonstrable decrease in air pollution on Dec. 11 that could be attributed to solar power’s output.  Unlike conventional power plants, solar power uses no fuel and thus does not emit air pollution.

But the mild 68 degree temperature in Los Angeles on Dec. 11 was not enough to produce an Inversion Layer effect, where warmer air at high elevations traps relatively cooler air below, creating a smog trap.  The South Coast Air Quality Management District reported air quality as “Good” for Dec. 11.  Remote centralized solar power plants may be reducing carbon dioxide emissions, but not within the crucial urban smog traps.

Conclusions

Here are the conclusions I was able to draw from comparing one winter day’s output of electricity from centralized solar power plants in California and imported solar power from surrounding states:

1. Thus far, centralized solar power is only marginally helpful in managing peak power loads during the mid-afternoon.
2. Centralized solar power is not helpful in managing sunset and late-hour peak power loads during the winter.
3. Centralized solar power does not demonstrably reduce air pollution on mild temperature winter days due to the modest Inversion Layer effect in California on colder days.
4. Solar power generation may have set a state record for megawatts generated on Dec. 4.  But, according to the U.S. Energy Information Administration, electricity generated from solar photovoltaic and solar thermal power plants are the two highest-priced sources of power by a wide margin. Centralized solar power runs from 15.9 cents to 25.1 cents per kilowatt-hour on average.  This is compared to 6.65 cents per kilowatt-hour from an efficient natural gas power plant that reduces air pollution by two-thirds over a coal-power plant.  And electricity from a non-polluting hydropower plant only costs 8.89 cents per kilowatt-hour on average. 

The media reports of record-setting solar power output are misguiding. Centralized solar power is an expensive option that doesn’t help meet late hour peak energy demands from 6:30 p.m. to 9 p.m. in California, particularly during cold winter nights.

California has 10 existing large centralized solar power plants with a capacity of 713 megawatts and 14 pending solar power plants capable of producing 5,742 megawatts of power in the planning pipeline.

California can look forward to more hot solar power capacity, which won’t help in meeting late hour demands on cold winter nights, unless very expensive battery storage systems costing $250 to $4,500 per kilowatt hour are installed along electric transmission power line routes. A typical home in a mild climate uses 5,000 to 30,000 kilowatt hours of electricity per year to run its natural gas heater in their home.

California has a lot of new centralized solar power coming online and battery storage systems that are being built on environmentalist faith, not proven technology. Better keep a warm sweater for cold winter nights in California unless you want to a huge winter electric power bill.

In Part 1 of this series, I reported on how California is launching a regional “energy imbalancing market” to reduce the spike in the price of electricity each day during sunset hours under the state’s new green-energy power grid. This is called the “duck chart problem” in California, as the time profile of energy use looks like a duck when solar power fades out at sunset each day and conventional energy has to ramp up to supply the grid before wind power ramps up. (See chart at right. Click to enlarge.)

Argonne National Laboratories points out several major problems this regional electricity rebalancing market.

First, it is a speculative assumption that all generating sources in the Western U.S. would commit 100 percent of their hydropower and other clean power sources to participation in California’s imbalance market.  One of the major reasons cited by Argonne is the “market price risk” of reserving power for a time window of 4:30 to 6:30 pm each day that runs the risk of having to bid at prices that are under the cost to produce the power.

Moreover, only about 10 percent of the blocks of electricity offered for market bids by the Southwest Power Administration end up as power actually dispatched.  Grid congestion during sunset hours is another problem not addressed in California’s regional balancing market.

Limitations on use of federal hydropower due to environmental lawsuits to protect fish also limit the capability to respond to rebalancing market bids.

So it’s no wonder the official government studies of imbalancing markets are “benefit-only” studies, not cost-benefit studies (see here, here, and here). In other words, the government isn’t sure what the ultimate costs will be, something that any normal private business would do as a matter of course.

According to a report prepared for the American Public Power Association and the National Rural Electric Cooperative Association, cost  savings from the imbalancing markets are estimated to be from $146 million to $294 million per year.  However, this only reflects 0.72 percent to 1.36 percent of total regional electric production costs. Worse, if both the Western Area Power Administration and the Bonneville Power Administration, which run federal hydroelectric power plants, do not join California’s imbalance market, the cost savings would be even punier.

That’s why U.S. Department of Energy Secretary Steven Chu urged only one-sided benefit-only studies of imbalancing markets be conducted, instead of balanced cost-benefit studies (see here, here, and here). (Chu since has left office.)

Costs, Redundancies and Cost Shifting

The American Public Power Association says the costs of an imbalancing market could run $1.25 billion, or $3.50 per megawatt hour, over the first 10 years of operation.  More worrisome for the APPA is that an imbalancing market would morph into a redundant grid-regulating bureaucracy called a Regional Transmission Organization.

Because an imbalancing market would operate regionally over the entire Western U.S., there would be what is called cost shifting.  This is where electric generation paid for by customers in one region (likely Utah, Arizona, Oregon, Wyoming, or Idaho) would be dispatched to benefit other customers  (in San Francisco or Los Angeles).  California would duck its energy price-spike during sunset hours of each day by an indirect subsidy of cheaper, imported hydropower portrayed as a rebalancing market.

As Kenneth Rose stated in his Critique of the National Renewable Energy Laboratory Analysis of the Proposed Energy Imbalance Market in the Western Interconnection:

“The three large California investor-owned utilities (Pacific Gas & Electric, Southern California Edison, San Diego Gas & Electric, all non-participants in the rebalancing market) account for 24.5 percent of the total estimated benefit.”

If It Walks and Quacks Like a Duck, It’s a Federal Subsidy

California’s “energy imbalancing market” is a plan mainly to use cheap federal hydropower from the Bonneville and Western power administrations — and Warren Buffet’s Pacificorp’s portfolio of dams, power plants, and wind farms — to bail out California’s green-power grid from a design defect in its green-power plan.  Ironically, green power would make California more dependent on imported power at critical peak ramping times.

California’s green-power mandate already needs a partial bailout of cheap federal hydropower during the critical sunset hours of each day. Probably most troublesome of all is that there is no apparent contingency plan if California’s plan doesn’t turn out all “ducky.”

California is trying to create what officially is called an “energy imbalance market” to cut off an emerging daily two-hour energy-pricing crisis. The crisis isn’t so much a technical problem of how to ramp up the grid fast enough, as how to cut down a sudden increase in electricity prices during the sunset hours of each day.

An energy imbalance is the difference between live demand and prearranged, scheduled resources.  To deal with that, the grid operator schedules power deliveries across regional balancing authorities to rebalance the system. California is part of the Western Interconnection Coordinating Council, which includes 33 control areas shown in the graph nearby.

In response, California’s electric grid operator, the California Independent System Operator, is negotiating with the Warren Buffett-owned PacifiCorp electric power company to provide cheap hydropower to rescue California’s attempt to shift to 51 percent green power by 2020 or sooner. 

On p. 10, the ISO’s 2014-2016 Strategic Plan reads:

“Two years ago, the ISO identified the need for more regulated collaboration as a key strategy to help manage resources and our infrastructure effectively and cost-effectively. We are now offering to provide our existing real-time energy imbalance market, which has been in effect since 2009, as a service to other balancing authorities. The ISO is currently working with stakeholders to develop policies that will provide this service to PacifiCorp, with the potential to expand the operation to other utilities. The energy imbalance market automates optimal generation dispatch, on a five-minute basis. When the system goes into operation in 2014, the ISO and PacifiCorp are confident of being able to demonstrate that the energy imbalance market reduces costs and emissions” (boldface added).

However, an “energy imbalance market” was never envisioned in the ISO’s Five Year Strategic Plan 2009-2013.

And the California Energy Commission addressed an energy imbalance market in its Integrated Energy Policy Report of 2012, but not in its 2010 report. California’s energy imbalance market is a hastily improvised plan to cut off an emerging crisis.The Federal Energy Regulatory Commission has approved California’s implementation of an energy Imbalance market by October 2014.

In today’s California energy market, the grid operator already runs an intra-state rebalancing market to balance loads and resources within its borders.

CA ‘duck chart’ problem can’t be ducked

An emerging problem with California’s new green power grid is how to ramp up enough conventional power each day between two events: 1) when solar power is sunsetting (going dark); and 2) when the mostly nighttime wind power isn’t spinning enough yet to take over.

In California, this ramping problem is called the “duck chart” problem,” seen in the nearby chart, (click to enlarge) where the lines like a duck with a tail, protruding belly and beak. The “neck” area is sunset every day when conventional energy “ramps up” to replace solar power. As shown on the chart, this ramping problem becomes more pronounced from about 4:15 pm to 6:15 pm each day (between 16:15 and 18:15 pm on military time or 24 hour calculated day).

The “duck chart” shows there is a demand in California to ramp up 13,500 megawatts of conventional power in a narrow two-hour window of time at sunset each day to replace solar power going offline.That would be enough power for about 6,750,000 homes per hour.

Warren Buffet to the Rescue

An imbalancing market would be a real time backup energy market that could dispatch power within five minutes’ notice.  But the primary purpose of a regional balancing market would not be to assure the delivery of ramp-up power, but rather to balance out the high prices that would result during the peak sunset hours of the day. Even green power advocates admit there is plenty of backup power available to be imported from other states. Each electric utility also has “demand management” plans in place to shift power usage to non-sunset hours to duck the “duck chart” problem.

An energy imbalance market would mainly have to rely on cheap hydropower in the Western United States to offset high green power prices and high “peaker” power prices during the sunset hours of the day. 

Ironically, California refused to classify hydropower as “renewable energy” under the AB 32, the California Global Warming Solutions Act because it didn’t want such cheaper, clean power to drive green energy out of its protected position in the market.Now, cheap hydropower, much of it provided by Warren Buffett’s PacifiCorp, will have to come to the rescue of the green power grid.

Wholesale electricity market prices spiked about 70 percent over last year.  So reports the Independent System Operator that manages California’s electric transmission and distribution line grids.  The reasons given by the ISO are:

• Natural gas prices rose about 50 percent over the unusually low gas prices of 2012.
• Most of the remainder of the increase in electricity market prices was attributed by the ISO to the implementation of the state’s greenhouse gas cap-and-trade program.
• A decline of about 25 percent in hydroelectric generation also modestly increased electricity prices.

Some experts believe that 2012’s low natural gas prices were due to the increase in supply created from hydraulic fracturing or “fracking.”  But others believe the reason that natural gas prices have risen so high in 2013 is the Obama administration’s mandate to shut down coal-fired power plants and shift to natural-gas-fueled power plants. The electricity price discount from fracking is being wiped out by the shift from coal power to natural-gas-fired power plants.

Cap and trade accounts for nearly all of the other half of the increase in natural gas prices in the second quarter of 2013.

Cap and trade is a policy whereby excess polluters have to pay the California Air Resources Board to buy permits to pollute over a certain emissions cap.  The ISO reports that forward purchases in the wholesale electricity market in the second quarter of 2013 were about $6 per megawatt hour higher due to the implementation of the program.  That reflects about 15 percent of the wholesale price of electricity. The ISO report states the higher natural gas price is “highly consistent with the additional emissions costs for gas units typically setting prices in the ISO market.”

Imported power increasing

Another consequence of the heightened demand for natural gas reported by the ISO is that imports of electricity have not decreased due to the cap-and-trade program.

The ISO report states that both “cleared imports and import bid quantities increased in the first half of 2013 compared to the first half of 2012 by 7 and 13 percent, respectively.”  So California’s plan to wean itself from dependence on imported power is backfiring as a result of cap and trade.

California imports about 25 percent of its electricity from out of state. But these imports are responsible for roughly half of the greenhouse gas emissions from power providers.  CARB suspended its “anti-shuffling” rule in 2012 that required importers to send only low emission power into the state.

Cap and trade wiping out gains from green power

Of possibly greater concern to environmentalists is that the combined effects of mothballing coal power plants outside of California and California’s cap-and-trade program reportedly ate up a $5 per megawatt price decrease from wind and solar power during peak hours during early 2013.

This is because the number of peak hours in the first quarter of 2013 was only 30 to 40 hours due to mild temperatures.  Peak hours are considered from noon to 6 p.m.  High-priced green power can only compete against peak hour prices.  Green power was only competitive for about 1.85 percent of the total hours in the first quarter of 2013.

Back to 2001 in Southern California

Transmission congestion has also raised its ugly head again in Southern California.  Californians learned about grid congestion after the infamous California Electricity Crisis of 2000-01.  Congestion is being mostly experienced in the Southern California Edison service area due to the retirement of the San Onofre Nuclear Generating Station.

The ISO reports congestion is increasing electricity prices in the Edison and San Diego Gas and Electric service territories. Conversely, the ISO reports that this often decreases prices in Northern California in the Pacific Gas and Electric service area.  No explanation was offered in the ISO report for this phenomenon.

Cost of cleaner skies: 70 percent higher electric bill?

The increase in wholesale power prices may not be easily noticeable in electricity bills yet.  An increase of $6 per megawatt hour in the wholesale market is the equivalent to 6 cents per kilowatt-hour at the retail level.  The average price for electricity in California is about 15.2 cents per kilowatt-hour.  Consumers would eventually feel the increase in both higher electricity and natural gas prices.

The average customer, not knowing where the price hike is coming from, may be likely to blame greedy oil and gas companies.  But Californians have been persuaded that they want clean air. The price for that is just starting to show up in customer’s electricity and gas bills.

By Joseph Perkins

George Santayana famously warned, “Those who cannot remember the past are condemned to repeat it.”

So it is that, only a decade after the Great California Energy Crisis, during which wholesale electricity prices ran up 800 percent in an eight-month span, state energy officials once again find themselves complaining of market manipulation by an electricity provider.

In 2000, the scapegoat was Houston-based Enron, which was alleged to have created an artificial shortage in electricity, enabling energy traders to fetch premium prices from defenseless California.

A dozen years later, Houston-based JP Morgan Ventures Energy Corp. a subsidiary of banking giant JP Morgan chase, stands accused of gaming California’s $8 billion a year energy market, raking in $73 million more than it should have for the electrons it shipped to the Golden State during the first half of 2011.

Well, there’s hardly any dispute that now-defunct Enron had its way with California. And it very well may be that JP Morgan Ventures Energy took advantage of the nation’s biggest electricity consuming state.

But California is no blameless victim. That’s because it remains as dependent on electricity generated out of state as it was in 2000. And it remains subject to the tender mercies of energy companies, like JP Morgan, that couldn’t care less how much California businesses and residences pay for electricity.

It’s very much like the relationship the United States has with OPEC. Since this nation depends so much on foreign oil to meet its domestic needs, we can only bitch and moan when the sheiks hold back the supply of crude to artificially inflate prices.

Indeed, were this country producing a sufficient supply of oil to satisfy domestic demand,  motorists in California and the rest of the country wouldn’t seen a 17-cent run up in pump prices during the past month.

By the same coin, the California Independent System Operator, the nonprofit corporation that oversees the state’s electrical grid, wouldn’t be chasing JP Morgan for $73 million in refunds if the state produced enough electricity to supply all of its needs.

And it’s not that California lacks the natural resources to do so. It just doesn’t want to.

That’s because our one-party state government has surrendered energy policy to hard core environmental interests, which believe that consumption of fossil fuels is on moral par with, say, clubbing baby seals.

That’s why no coal-powered electric plant has been built in California in more than two decades; why coal generates 45 percent of electricity nationwide, but only 1 percent in California.

That’s why enviros are trying to permanently shut down the state’s two nuclear power plants, though they supply 15 percent of the state’s electricity, more than generated by solar, wind and geothermal combined.

It is because California considers fossil fuels such an anathema, because it will not allow another megawatt of electricity to be produced in this state from coal, nuclear fuel or natural gas, that California imports more electricity than any other state.

And as long as California continues to rely on imported electricity, rather than electrons generated in state, it will remain susceptible to out-of-state energy providers, like JP Morgan Ventures Energy, which will continue to figure out clever new ways to game the Golden State’s energy market.

That will continue to make California consumers pay a premium for the state’s misguided energy policy.