IEEE Power & Energy Magazine - July/August 2015 - 48

Integration solutions that provide only upward flexibility, like conventional DR, do not significantly reduce overgeneration. This means that upward ramping capability is
not a meaningful constraint on power system operations at
50% renewables in California under the conditions modeled for this study. This result may seem surprising, particularly since California's early attempts to develop a standard
"flexible capacity" product have focused on a three-hour
upward ramping product. However, California already has
a relatively flexible fleet of natural gas and hydroelectric
resources, and this study suggests that adding 5,000 MW
of upward ramping capability does little to avoid flexibility
violations or reduce system dispatch costs.
Each of the solutions is assessed in isolation, with the
aim of indicating promising directions for further investigation. Preliminary analysis suggests that a portfolio of
solutions could substantially reduce the quantity of curtailment required to meet a 50% goal. However, the solutions
are subject to the economic law of diminishing marginal
returns, and avoiding all instances of renewable curtailment is likely to be cost prohibitive. Moreover, there are
likely to be significant challenges to implementing any of
these solutions. For example, the technical potential for
pumped storage or upwardly flexible loads in California
is unknown.

Cost and Rate Impacts
of a 50% Renewable Grid
The study estimates the statewide total cost and average
retail rate for each of the 33, 40, and 50% renewable scenarios. The total cost includes the cost of procuring and
operating the renewable and thermal resources, the cost of
-transmission and distribution system investments needed to
deliver the renewable energy to loads, and nonstudy-related
costs such as the cost of existing generation, transmission,
and distribution. The total cost for the study area is divided

by projected retail sales to calculate an average US¢/kWh
rate across all customer classes.
As a backdrop, the study estimates that the average retail
rate in California could increase from US14.4¢/kWh in 2012
to US21.1¢/kWh in 2030 (in 2012 U.S. dollars), a 47%
increase, before higher renewable levels beyond 33% are
taken into c- onsideration. This increase is driven largely by
trends that are unrelated to renewable energy requirements,
such as the need to replace aging infrastructure. A 2011 analysis estimated that compliance with the current 33% standard
is expected to raise investor-owned utility rates by 6-8% in
2030 (relative to California's 2011 renewable penetration of
approximately 13% of total energy).
Tables 4 and 5 show the cost and rate impacts of achieving a 50% renewable grid in 2030. The total cost of each
scenario, in terms of annual revenue requirement in 2030,
is shown in Table 4. The total increase in annual revenue
requirement associated with a 50% renewable goal in 2030
ranges from US$5.2 to US$13.3 billion above the 33% scenario; this includes CO2, fuel, and capacity savings as well
as increases in renewable procurement costs.
Table 5 shows average retail rates under the 33% scenario, and the increases in percentage terms for each of the
higher renewable scenarios relative to 33%. Under base
case assumptions about natural gas prices, CO2 allowance
prices and renewable energy costs, the 50% large solar scenario raises average retail rates by US3¢/kWh relative to
the 33% scenario. Figure 6 plots the average rate increases
for each scenario under combinations of natural gas, CO2
allowance, and renewable energy costs considered, relative
to a 33% standard in 2030.

Study Findings
The analysis reveals several interesting findings.
✔✔ Under a wide range of CO2, natural gas, and renewable
energy prices (gas prices from US$3 to US$10/MMBtu,

table 3. 2030 overgeneration statistics for the 50% large solar scenario and four solution cases.
50% RPS
Large Solar

Enhanced
Regional
Coordination

Advanced
DR or Energy
Conventional DR Storage

Diverse
Portfolio

GWh/year

12,000

4,700

12,000

5,000

5,400

Percentage of available RPS energy

8.9%

3.4%

8.8%

3.7%

4.0%

Hours per year

2,000

1,000

2,000

1,200

1,300

Percent of hours

23%

12%

23%

14%

15%

Overgeneration Statistics
Total overgeneration

Overgeneration

Extreme overgeneration events

99th percentile

15,000 MW

9,900 MW

15,000 MW

9,900 MW

10,000 MW

Maximum observed

25,000 MW

20,000 MW

25,000 MW

20,000 MW

19,000 MW

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july/august 2015

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