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US utilities discuss issues from expected future demand for solar and the impact on grid

PG&E, SCE & SMUD talk about their solar expansion plans - According to GTM Research, Q2 2012 saw a record 466MW of utility scale solar installations in the US and a total volume of 742MW of solar installations.

 
PRLog - Nov. 19, 2012 - According to GTM Research, Q2 2012 saw a record 466MW of utility scale solar installations in the US and a total volume of 742MW of solar installations. This took the US to a total of 5.7GW of installed solar capacity. Buoyant growth is expected in the utility segment until the end of the year but are utilities nearing their RPS requirements? Will they continue to have an appetite for solar? What will this appetite look like?

On January 16th, top executives from the nation’s utilities will join an exclusive utility breakfast briefing at the 5th Annual Solar Power Generation USA congress in Newport Beach, California.

We caught up with 3 of the panellists at this breakfast briefing; Pacific Gas & Electric Senior Vice President of Energy Procurement, Fong Wan; Southern California Edison Senior Vice President of Power Supply, Stuart Hemphill; and SMUD General Manager & CEO, John Distasio.

First off, what installed solar capacity does the utility currently have and what is it comprised of?

PG&E
: PG&E currently has more than 700 MW of rooftop and other customer-sited systems online.  This represents more than 72,000 customers, or about 30% of the total rooftop solar systems in the United States.   We also have about 100 MW online through our large-scale Renewable Portfolio Standard (RPS) program.  This number will change significantly in the next few years, when more than 2,800 MW of third party, RPS-eligible solar projects that are under contract to PG&E are expected to come online.  

SCE: In the wholesale renewable space, SCE has 454 MW of on-line and active solar capacity made up of 354 MW of solar thermal, and 100 MW of solar PV.  These values do not include customer-owned rooftop solar.

SMUD: Solar PV represents an estimated 8% of our renewables. More than 3,500 systems are in SMUD  service territory representing more than 115 MWs. Most of these PV systems are small, residential,  and net-metered, and almost all are third-party-owned. SMUD owns 25 PV systems totalling about 25 MWs.

How do you envisage the utility’s demand for solar power evolving in coming years?

PGE
: We forecast that solar energy will generate about 13% of the total power we provide to customers in 2020 – and this percentage does not consider amounts that our customers will generate for themselves using rooftop and other distributed solar systems. On the RPS side, PG&E is well-positioned to meet its near-term RPS requirements.  However, we will continue to contract with RPS-eligible resources to help us meet and sustain our longer-term 33% RPS goal.  Solar projects will have a place in these contracting activities as long as they continue to be cost-effective, viable projects that can help us provide safe, reliable, and affordable electricity to our customers.

SCE: In 2012 and 2013, SCE plans to focus on small-scale renewable generation through its various small renewable procurement programs and solar is a strong competitor in these solicitations.  During this time, SCE expects it will execute several hundred megawatts of renewable capacity with projects that are 20 MW or less that are locally distributed in the California grid.

SMUD: We expect solar demand to grow and we’re leading research on integrating this variable generation resource into our small/medium-sized utility system.  Assessments of bulk and distributed storage options, improved solar forecasting tools, volt/var control experiments at substations and with advanced PV inverters, evaluation of demand response, and system planning and modelling comprise our preparatory research.

To what extent is the variability of solar power a concern to the utility?

PG&E:
Variability is a significant issue and one about which we have a lot to learn in the coming years.  We are particularly concerned about the impact that a large amount of solar will have as it comes online in the morning and goes offline in the evening, which creates the need for a significant amount of flexible resources that can quickly ramp down and up.  This issue is further complicated by the fact that PG&E’s peak demand occurs in the evening, after most solar power has stopped producing for the day.

SCE: With the level of intermittent resources SCE has added, and expects to add to its portfolio, variability in output is a concern.  The CAISO is developing ways to address variability and SCE supports and contributes to those efforts as needed.  In 2011, SCE's portfolio is made up of about 6% solar energy, and is expected to expand significantly over the coming years.  The intermittency of solar power will be a much larger challenge to the CAISO grid as it develops a larger presence.  Second-by-second, minute, hourly, daily, and monthly production can show significant variation.

SMUD: Variability is an important concern.  SMUD’s renewable energy supplies have grown from 6 percent in 2003 to an expected 29 percent (both RPS and Greenergy) in 2012. To maintain high reliability, we obtain more than 50 percent of our renewable supply from baseload renewables such as biomass and geothermal. Now, we are researching and developing tools to manage solar variability in the most cost-efficient way for our customers.

Beyond cost, what are the key criteria that you look at when contracting for solar projects?

PG&E:
considers many variables besides cost when we evaluate all RPS projects, including solar projects.  For example, we consider project location due to constraints on our ability to transmit electricity across certain areas – this helps us ensure a reliable electric system.  We also closely evaluate the project’s viability by considering, for example, developer experience and project permitting, financing, and interconnection status.  All of these considerations help ensure that projects provide good value to our customers.

SCE: SCE's goal is to procure renewable energy economically, while providing the most value to its customers.  As such, SCE evaluates both quantitative and qualitative aspects of each proposal to estimate its value to SCE's customers and its relative value in comparison to other proposals. An example of some of the criteria when considering solar projects include: capacity benefits, energy benefits, contract price, portfolio fit, project viability, and need.

SMUD: We value solar PV in our service territory because it provides capacity and load-serving capability to SMUD vs. PV installed in the CAISO system. We seek PV that maximizes production during summer afternoons, when the electricity is of highest  value to SMUD. We send appropriate price signals to independent power producers (IPPs) and customers – for example, our FIT rates are highest during summer afternoons. We look for solar that can be installed at low interconnection cost on our distribution system. We give maps to guide IPPs in siting their solar plants. Since solar requires a lot of land (about 6 acres/MW), we encourage solar on rooftops or on disturbed or low-value land, such as gravel and other mining lands.

Seats remain at the utility breakfast for both utility and solar representatives who wish to grill utility decision makers from across the US. Question executives in a relaxed environment on their preferred procurement models, upcoming RFPs and PPAs not expected to reach fruition, exploration into grid balancing systems and their answers to criticisms being thrown at the utility sector.

Joining the discussion will also be CPUC President Michael Peevy and CEC Chair, Robert Weisenmiller. For more information on the utility breakfast and Solar Power Generation USA congress visit www.solarpowergenerationusa.com

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