California’s energy regulators just laid the framework for utilities to develop localized microgrids with battery storage — a move that comes in the aftermath of the state’s wildfires that have ravaged local economies and left consumers without power. Just how effective will this order be?
California is the national leader when it comes to addressing climate change and facilitating the use of renewable energies and green technologies. But the concern is that utilities would rely too much on fossil fuels. Beyond that, the worry is that the process would unfold too slowly, all in the context that faulty utility equipment has led to numerous fires — not good with wildfire season coming up in September.
“The California Public Utility Commission’s order promises substantive changes in transparency and planning that should support collaboration with communities and tribes,” says Michael Burr, founder of the Microgrid Institute, in an interview with this writer. “While these changes are steps in the right direction, they don’t actually require California’s investor-owned utilities to use distributed energy resources for local resiliency — or to back up the grid if the power goes out. It will be up to the commission and customers to hold utilities accountable for achieving the purposes of the order, and not just checking the boxes it requires them to check.”
Some background: In 2019, PG&E Corp. filed for bankruptcy as a result of a deadly and destructive wildfire in 2018. The San Francisco-based utility allowed unwieldy trees to interfere with power lines. The Wall Street Journal reported that the utility’s equipment caused more than 1,500 fires from June 2014 to December 2017. The Los Angeles Times, meanwhile, reports that the state’s three investor-owned utilities, Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric sparked 2,000 fires between 2014 and 2017, all because of defective equipment.
The commission’s rule-making, released last Thursday, is a direct response to state law that requires the deployment of microgrids and in a way that does not shift the costs to customers. The distributed energy resources that Microgrid Institute’s Burr refers to involve solar panels, battery storage, and localized microgrids that deliver power to buildings or campuses. The goals are multi-faceted but center on resiliency, economic development, and increasing the use of green energy.
“The use of microgrids, coupled with the (commission’s) work to hold utilities accountable for creating and implementing wildfire mitigation plans, will help make communities more resilient in advance of the 2020 wildfire season,” said the commission’s president Marybel Batjer, in a news release.
Hold Their Feet To The Fire
To that end, Pacific Gas & Electric also agreed to upgrade substations and to procure generators ahead of wildfire season while San Diego Gas & Electric will augment microgrid-related hardware-and-software. Collectively, the three investor-owned utilities are expected to build several dozens of microgrids and will give progress reports to the commission.
To be sure, there will be some headwinds. California, of course, aims to be carbon-neutral by 2045. The public utility commission says that microgrids sending green energy can help fight wildfires. But according to the Brattle Group, natural gas may be the go-to source because it can provide reliable power for longer periods of time. The cost of solar and storage have fallen, it adds, but it would take too much battery capacity to keep the lights on for extended periods.
Even PG&E says that it expects diesel generators to provide back-up power during outages while natural gas will play a key role in firing up onsite generators. But it adds that those distributed resources lessen the possibility that a destructive event can wreak havoc on its system. And that is the goal of California’s regulators.
Importantly, the onsite power generation and microgrid delivery may have to use fossil fuels, although California’s investor-owned utilities are well-along the path to meeting the state’s renewable energy challenges: The commission says that those utilities will obtain as much as half their electricity from renewable sources this year.
“In general, utility customers will continue pushing to connect privately-financed solar, wind and storage projects to the utility’s grid and the challenge will be for the utilities and our regulatory agencies to keep up with the pace that technology and the markets are setting,” says Michael Powers, founding partner of San Diego-based Stellar Solar, in an interview with this reporter. “If we are serious about fighting climate change and meeting the clean energy goals that communities have set, we need the utilities and agencies to become more nimble and resilient, too.”
California’s utility regulators are on the right path — one that enables the use of distributed energy resources to increase reliability while potentially using more green energy. Utilities should respond, given they have endured wildfires and earthquakes that have rocked their delivery systems and upended local communities — something everyone wants to avoid and something that microgrids can help achieve.