California's renewable energy industry has seen dramatic changes in the state's electricity system over the past several years. The emergence and consequent failure in deregulation of the electricity market set off rapid increases in wholesale electricity prices followed by a decline back to pre-deregulation levels. In addition, unanticipated increases in localized electricity demands coupled with slower than expected growth in generating capacity resulted in a record number of stage two electricity alerts, and rolling blackouts.
As a consequence, California's renewable energy industry found itself in a far different situation than it faced leading into deregulation. Instead of struggling to compete in a competitive deregulated electricity market, renewable generators suddenly faced requests to accelerate deployment of new renewable capacity and restore facilities that had been closed due to poor economics. However, with the bankruptcy of the investor owned utilities, renewable electricity generators found themselves unable to sell electricity into the marketplace with an assurance of reimbursement. Inability to find lenders capable of committing to long term purchase agreements has delayed construction of many proposed new renewable electricity facilities.
Passage of a renewables portfolio standard may provide some assurance to long-term funding of renewable energy facilities and lead to a resurgence in new renewable facilities. However, a number of issues face development of renewables in both the near- and long-term future:
- In the near term, there is increasing pressure to deploy renewable energy facilities to help add generating capacity, improve system reliability, and help stabilize California's electricity prices. However, such strategic application of renewables is hindered by lack of understanding on how best to integrate renewables into the existing system, to integrate appropriate renewable energy configurations, and to integrate the control logic and hardware needed to ensure system stability and safety.
- In the longer term, a sustainable development of renewable energy that provides high value to California's electricity system requires renewable electricity generation systems with improved dispatchability and increased ancillary services capabilities. To a large extent, this development pathway will be tied to growth in renewable distributed generation systems. This growth requires additional understanding and demonstrations of renewable distributed generation systems used in combination with fossil-based generation and configured to meet a variety of electricity customer classes or electricity system sub-regions.
- California's electricity problems have emphasized the need for renewables to provide increased value to the electricity system. However, it is equally important that renewables be developed in a manner that provides environmental benefits to the state. As a result, renewable electricity technologies must improve their ability to surpass environmental regulations and make better use of renewable resources that currently pose environmental concerns (e.g., increased use of agricultural residues that are currently burned in the field, increased use of forest materials that pose high wildfire risks, etc.).
Objectives
PIER Research, Development and Demonstration efforts in the renewable energy area are focused on four objectives:
- Making improvements at existing renewable energy facilities to help provide peak capacity and increased reliability to California's electricity system
- Expanding renewable distributed generation technologies to help provide electricity generation in high-demand, high-congestion areas
- Developing renewable energy technologies, products, and services that provide electricity customers with more affordable electricity, improved reliability, and a selection of choices
- Conducting longer term research on advanced renewable technologies that will help meet tomorrow's electricity needs
To accomplish these objectives, the PIER renewables group is working collaboratively with private industry, the national laboratories, not-for-profit research entities, and academic institutions.