The Impact of Renewable Energy, Distributed Generation, Storage & Energy Efficiency on the GridSouthern California Energy Summit

Governor Angelina Galiteva

ISO Board of Governors

October 4, 2013

California ISO

58,698 MW of power plant capacity

50,270 MW record peak demand (July 24, 2006)

26,500 market transactions per day

25,627 circuit-miles of transmission lines

30 million people served

309 million megawatts of electricity delivered annually

The ISO, a nonprofit public benefit corporation, maintains the constant and reliable flow of electricity for the health, safety and welfare of consumers

Slide 2

Environmental goals and policies drive the evolution to the future grid.

Electric industry faces changes: Ambitious environmental

goals

Reliability with fewer gas-fired plants

Cost containment

Need to strike a balance between reliability, renewables and reasonable cost.

Slide 3

California energy and environmental policies create reliability challenges

• Greenhouse gas reductions to 1990 levels by 2020

• 33% of load served by renewable generation by 2020

• 12,000 MW of distributed generation by 2020

• Ban on use of once-through cooling in coastal power plants

• Limits on availability of air emission credits for replacement generation

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Slide 5

Current installed capacity:

•3,700 MW solar (expected)• Peak 2,794 MW on Sept 18, 2013 @

12:46 p.m.•6,900 MW wind (expected)

• Peak 4,302 MW on June 23, 2013 @ 12:22 a.m.

Expected 2020 capacity:

•10,800 MW solar•7,900 MW wind

California renewable policies are succeeding.

For Operating Day Sunday, September 22, 2013

Significant renewable generation in ISO queue

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as of September 27, 2013

The future grid includes diverse resources with various operating attributes.

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grid scale solar

energy storage

wind

Conventional generation

electric vehicles

smart homes

Slide 7

To keep the system reliable, the ISO must match supply and demand instantaneously.

Slide 8

The ISO reacts to the instantaneous changes in electricity demand to maintain reliability.

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34,000Electricity demand (load) changes over the day

Load

Hour

Slide 9

The ISO must also react to variability in wind and solar energy production.

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34,000Solar

Electricity demand (load) and wind and solar output changes over the dayLoad

Hour

Wind

Slide 10

The ISO must manage to the net load curve by controlling resources.

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SolarLoad

Wind

Net Load

Hour

Net load captures variability from electricity demand and wind and solar output

Slide 11

The ISO needs flexible resources to manage reliability of the future grid.

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Net Load

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One measure of flexibility is ability to change output over a short time

6,700 MW in 3-hours

7,000 MW in 3-hours

12,700 MW in 3-hours

Slide 12

California’s success is driving the need for smarter grid applications.

Flexible generation

Non-generation capability •Demand response•Energy storage•Targeted energy efficiency

Better forecasts

Better visibility

Technology pilots

Improved regional coordination

Slide 13

A diverse resource mix can meet the needs of the future grid.

Resource type

Traditional Use

Future grid Value

Conventional generation

BaseloadPeaking

• Ability to start and stop frequently

• Low minimum operating levels

• Supports ramping needs• Mitigates overgeneration

Renewable generation

Must take • Ability to modify output

• Decreases ramping needs• Provides voltage support

Demand response

Emergency • Frequent, short duration events

• Automated response

• Defers or offsets generation or transmission investment

• Mitigates overgeneration

Energy storage

Peak-shifting • Ability to start and stop frequently

• Frequent, short duration events

• Supports ramping needs• Mitigates overgeneration• Provides frequency

response

Electric vehicles

Not applicable • Frequent, short duration events

• Automated response

• Mitigates overgeneration• Provides frequency

response

Slide 14

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PacifiCorp will pay the ISO for 5-minute automated balancing services.

California and PacifiCorp ratepayers will benefit from automated optimization of generation dispatch.

Enables higher levels of renewable integration at lower cost.

California smart technology will benefit ratepayers and improve renewable integration in the West.

Reality of Southern California’s Grid post-San OnofreDetails • San Onofre represented 16% of local generation or ~1.4 million

homes• More importantly its location was on a critical transmission path that

was crucial to voltage support

Challenge • Once through cooling retirement timeline of 5,000 MW • Annual load growth of 400 MW• Difficult to move limited energy to load without adequate voltage

support

Page 16

Summary of staff approach

Requirements: • Maintain reliability – Number 1 priority

• Establish a common understanding

Approach:• Utilize existing processes to get final decisions on long-term solutions by

mid-year 2014. Solutions could include:

− 50% of incremental need from energy efficiency, demand response, distributed generation, and storage.

− Authorize transmission upgrades to reduce needs

− Authorize conventional resources where preferred resources and transmission development is insufficient

− Establish contingency plans to address key risks

− Manage critical risks for air permits, transmission siting, preferred resource deployment/effectiveness, natural gas supply

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San Onofre closure causes reliability problems in Southern California because Los Angeles and San Diego are load pockets with limited options

• All three characteristics are needed – not all resources can provide.

• Compliance with once-through cooling schedule compounds the issues.

• San Onofre provided: 2,246 MW in the LA Basin 1,100 MVars supporting voltages between Los Angeles & San

Diego

Real power (Watts) • Runs lights and appliances• Requires correct voltage for

delivery (like pressure in water pipes)

Reactive power (Vars) • Over or under supply of Vars

causes voltages to climb or fall• Local needs must be met locally

Real-time changes (“contingency” response)• System must be ready to

respond to events• Some events are instantaneous;

others allow 30 minutes

Page 18

Expected resource needs and potential solutions

Total load in LA Basin & San Diego:2018 = 27,500 MW2022 = 29,000 MW

*1,800 MW authorized•May include additional preferred resources•Transmission could further reduce need

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Specific near term actions (2013 - 2018)

CPUCCECISO

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Ensuring reliability 2019 & beyond

CPUC•Authorize additional resources thru LTPP and other proceedings, including EE, DR, DG, storage

• Direct SDG&E and SCE to pursue contingency permits in Northern San Diego County and LA Basin that will be competitively bid to independent generation developers

• Address potential need for gas infrastructure in San Diego

CEC•Conduct siting review of contingency generation

•Establish contingency approach to OTC compliance deadlines in consultation with the State Water Resources Control Board

ISO•Consider transmission alternatives - AC, DC, sub-marine cables

•Monitor system upgrades in collaboration with the CEC and CPUC

•Trigger contingency backups

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Commitment to Preferred Resources

• CPUC will seek to add 800 MW to 1000 MW of Distributed Generation, Demand Response, Efficiency, and storage on top of the 3,000 MW already targeted for the state. This commitment has several key challenges. – The additional resources will need to be

geographically located – Resource mix will need to be established so that it

offsets need for voltage support– Timing is critical.

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The Grid of the Future

Greener, smarter and more secure electric future

Wind and solar capacity nearly doubles by year 2020

Diverse, flexible resources key to reliability

Improved regional coordination

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Changing usage patterns

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Smart technologies help consumers manage bills

Nighttime electric vehicle charging expands

Electricity usage harder to forecast

Electric light-duty vehicles increasing

Electric mass transportation (including people movers) increasing

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For more information go to www.caiso.com

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Thank you

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