Inside Clean Energy: What’s a Virtual Power Plant? Bay Area Consumers Will Soon Find Out.

A new project would create a collective power system that could improve grid reliability and reduce dependence on big utilities.

Aug 6, 2020
Volunteers for the nonprofit Grid Alternatives install solar panels on a house in Farmersville, California. Credit: Grid Alternatives

Volunteers for the nonprofit Grid Alternatives install solar panels on a house in Farmersville, California. Credit: Grid Alternatives

Inside Clean Energy

Remember Megazord, the giant robot hero from children's television whose body was made up of a bunch of smaller robots joining together?

Think of a new project by three Bay Area electricity providers as Megazord for the grid.

East Bay Community Energy, Peninsula Clean Energy and Silicon Valley Clean Energy have announced that they are working with the solar company Sunrun on a program that will give discounted solar panels and battery storage systems to up to 6,000 households and businesses.

The systems will have two purposes: Providing renewable backup power to those customers, and also enabling them to band together when needed to send electricity out to the grid, with up to 20 megawatts of battery capacity.

Another term for this kind of system is a "virtual power plant," and anyone who's been reading me for a while knows that I geek out at the potential of virtual power plants to make the electricity system cleaner and more reliable.

Sunrun, based in San Francisco, is the country's largest installer of home solar and batteries. This would be the largest virtual power plant that Sunrun has ever created and one of the largest by any provider in the country.

"What I think is really cool is that a single system, a rooftop residential solar-plus-storage system, will get installed in a day or two and then we'll immediately be providing direct benefits to the household where we installed it," said Nicholas Smallwood, Sunrun's vice president of business development.

"As we install more and more and more to the larger area, we can link them together and provide benefits to the larger area without having to wait for a single large asset to be built like you do with utility scale," he said.

This latter benefit is one of the big selling points for the Bay Area electricity providers. They plan to use the combined capacity of the batteries in their planning to maintain the grid's reliability. This means there would be less of a need to rely on natural gas plants and other resources.

"This is the way that utilities and specifically electric service utilities should be engaging in the push for mitigating climate change," said J.P. Ross, senior director of local development for East Bay Community Energy.

Access to backup power is a big deal because of wildfire risk. Pacific Gas & Electric last year started conducting massive planned blackouts to reduce the risk of sparks from electricity equipment, leaving many East Bay Community Energy customers in the dark.

The project would roll out between now and 2022. The main benefit of the program for customers, most of whom lease their solar panels and battery system, is that Sunrun plans to give participants an upfront payment of $1,000 for joining.

The payment would cover the equivalent of several months of lease payments, a significant incentive. A common solar-plus-storage lease package costs about $150 per month, the company said. This figure does not take into account utility-bill savings, which vary a lot depending on the customer, but usually are enough to cover most of the cost of the lease.

Virtual power plants are still in the very early stages. The National Renewable Energy Laboratory issued a report two years ago about 23 demonstration projects across the country going back to 2009.

Until this Bay Area project, Sunrun's largest virtual power plants were in Hawaii, Southern California and Upstate New York, with 1,000 customers in Hawaii and 300 each in the other two.

Smallwood said the biggest obstacle he faces in promoting the systems is that the idea of a virtual power plant is a new one that takes time to understand. But as more electricity providers create programs like the one in the Bay Area, the word will spread.

"We're at the beginning," he said.

I'm thinking about what this idea may look like in the near future, with hundreds of thousands or even millions of batteries. I don't think it's an overstatement to say that virtual power plants could fundamentally change the way the power system works, with a grid that is cleaner and less centralized. And that's exciting.

A Carbon Capture Success Story Goes Kaput

For as long as I've covered energy, I have heard about how carbon-capture technology was close to the kind of breakthrough that would make it affordable enough to be used on a large scale.

Yet nearly all the carbon-capture projects in this country were canceled before they were completed because of concerns about costs and whether the systems would actually work.

Petra Nova's operations have been suspended because it was no longer cost-effective to run. Credit: NRG Energy

Petra Nova's operations have been suspended because it was no longer cost-effective to run. Credit: NRG Energy

Still, there was one so-called success story: the Petra Nova plant in Texas, which went online in 2016 and was praised at the time by the fossil fuel industry and the Trump administration.

Last week, Petra Nova's owners said they have suspended operations at the plant because it was no longer cost-effective to run.

It's a big deal for the narrative about carbon capture. But I don't think it changes the underlying reality, which is that this is a vital technology for dealing with climate change, but not ready to compete on the market yet.

Petra Nova Carbon Capture Project Shuttered

Fossil fuel industries have been some of the leading promoters of carbon capture because of the possibility that the technology would help to prolong the lives of power plants.

"Being able to capture the CO2 from exhaust is a really important tool in the toolkit for being able to address climate change, but using it as an excuse to keep around some of the dirtiest coal plants in the country doesn't make a lot of sense," said Daniel Cohan, an environmental engineering professor at Rice University who has written about Petra Nova and carbon capture.

Most of the carbon capture projects designed for power plants used a system to remove carbon from the plants' exhaust and then pump it underground for long-term storage. The Petra Nova project was different in that it wasn't storing carbon but selling it for use in nearby oil wells to help force additional oil from the ground. The project also burned natural gas to power the carbon capture process—another detail that made it difficult to call this a clean energy initiative.

Petra Nova's carbon capture equipment is attached to the coal-fired W.A. Parish power plant, but last year it only captured a small share of the plant's emissions. Even with the use of the equipment, W.A. Parish was one of the country's Top 10 emitters of carbon dioxide, according to the U.S. EPA.

This pollution record is one of the reasons that Cohan and others have called for the plant to be closed, and said that the carbon capture project was helping to promote the image of the plant as clean while doing little to actually make it clean. Cohan was a co-author of a 2019 paper that touched on many of these points.

Petra Nova is owned by NRG Energy and JX Nippon Oil and Gas Exploration. NRG told me this week that the plant is in "a reserve shutdown status," which means it's offline for now but could be reactivated if market conditions improve. The plant ceased to be financially viable because of low oil prices, which made it unprofitable for oil producers to buy carbon to force out additional oil.

"We are proud of the work we have done to demonstrate that carbon capture could be installed on an existing coal-fired generating station and operated as designed," said Chris Rimel, NRG's generation communications manager, in a statement.

This is definitely not the end for carbon capture technology. The federal government has programs to finance research and demonstration projects.

Such work is essential to prepare for a time in which we want to get carbon emissions to zero, but also still need factories and industrial processes that emit some carbon.

Owners of fossil fuel power plants may see carbon capture as a potential lifeline, but they may be in for a wait that is longer than those plants can survive in the market competing against cleaner and less expensive options.

SoCalGas Goes to Court as Natural Gas Industry Nears 'Moment of Reckoning'

One of the country's largest gas utilities is ratcheting up its fight against the growing movement to phase out natural gas in California.

Southern California Gas Co. on Friday sued the California Energy Commission, saying the office is violating state law with conduct that is encouraging reductions in use of natural gas.

This is an escalation of an already tense relationship as the company can see that state policy has gone, in less than a decade, from supporting natural gas to taking steps that will reduce use of the fuel.

SoCalGas is taking this aggressive approach as the commission is working on a proposed update to the state's building code that may include limits or even a ban on gas hookups in new construction. The proposal will likely be made public in a few months, and then voted on by the commission next year.

Bruce Nilles of the think tank Energy Innovation told me that the lawsuit shows SoCalGas is alarmed by what it sees happening in state policy and has decided to dig in for a fight rather than take a more conciliatory approach.

"Like the coal industry 10 years ago, they thought they were immortal and now they realize their porch is beginning to teeter," he said.

"They have been trying to duck and weave and avoid that moment of reckoning and they've realized that the misinformation and delay tactics that have worked elsewhere are no longer working in California," he said. "So the only thing they have left is to resort to litigation."

SoCalGas said in its court filing that the state commission is not following state laws that require it to take a "balanced approach" to meeting California's energy needs and encourage the use of all energy resources. The company wants the court to force the commission to delete portions of previous reports and replace them with versions that are more in line with what the gas industry says is required by law.

A commission spokesman declined to comment, and the commission has not yet filed a reply in court.

The lawsuit is a distillation of many of the arguments in the broader debate about the future of natural gas, with the utility saying that gas is a low-carbon fuel that is essential for maintaining an affordable and reliable energy supply.

The problem with this argument is that California has set a goal of getting to net-zero emissions by 2045, which means that state policies will need to change to help reduce all sources of carbon emissions, including those from burning natural gas in homes and businesses.

Since new buildings will be around for decades, the changes to the building code today will play a key role in determining whether the 2045 goal can be reached.

And SoCalGas is sending the clear message that it intends to resist this transition every step of the way, Nilles said.

"It's fair to say they're putting down a marker," he said.

How Big Could Offshore Wind Energy Get in the US? Pretty Big.

While the federal government moves slowly to approve the first large offshore wind farm in the country, a coalition of industry groups is calling attention to the vast energy and economic benefits that offshore wind could bring.

Four industry groups, including the American Wind Energy Association, commissioned a report to estimate the amount of jobs, investment and electricity that would be created by building offshore wind farms in regions where the government has not yet sold leases: California, the Carolinas, Maine and the New York Bight region, an area of shallow water between Long Island and the New Jersey coast. The federal government is moving toward selling lease rights in each of those areas over the next two years.

Teesside Wind Farm in the United Kingdom was constructed between February 2011 and June 2013, and officially opened in April 2014. Credit: Mat Fascione

Teesside Wind Farm in the United Kingdom was constructed between February 2011 and June 2013, and officially opened in April 2014. Credit: Mat Fascione

Across the multiple states it included, the report projects that new development would support 80,000 full-time jobs from 2025 to 2035 and could support more than 30 gigawatts of electricity generation.

This would just be new lease areas, in addition to the benefits of the roughly 9 gigawatts of wind farms that already have been leased and are in various stages of development off of Massachusetts, Maryland and Virginia, among others.

For some perspective, the United States has about 110 gigawatts of land-based wind farms.

I am naturally skeptical of claims in an industry-funded report, but this one was conducted by reputable analysts at Wood Mackenzie, using the same standards they use for their large body of research on the energy economy.

The report arrives at a crucial moment for offshore wind energy, as the federal Bureau of Ocean Energy Management is reviewing plans for Vineyard Wind 1 off of Massachusetts, the 800-megawatt offshore wind farm that would be the first one of that size in the country.

This review has been a slog, leading to delays as the federal office considers the effects of offshore wind on the fishing industry and other environmental concerns. The long wait has inspired fears in the industry that the government is hostile to offshore wind development.

If you know about these tensions, the timing of this new report makes sense.

"We're on the cusp of a rare opportunity, but the U.S. remains far behind other countries in harnessing offshore wind technology," said Laura Morton, senior director of offshore wind for the wind energy association, in a statement. Indeed, Europe and parts of Asia are much further along in building offshore wind.

The appeal of offshore wind remains clear: It is an abundant source of renewable energy that can easily be delivered to population centers on the coasts, which are areas that don't otherwise have much space for wind or solar power.

Without offshore wind, it is difficult to see how large metro areas on the coasts will be able to do their part to meet state targets to get to net-zero emissions.

Inside Clean Energy is ICN's weekly bulletin of news and analysis about the energy transition. Send news tips and questions to dan.gearino@insideclimatenews.org.

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