ALBUQUERQUE, N.M. — When the lights briefly went out this past summer in California, it fired up national debate on the wisdom of fully replacing fossil fuels with 100% carbon-free resources.
California’s regulatory authorities ordered that state’s three main utilities in mid-August to impose short “rolling,” or rotating, blackouts during a historic heat wave that taxed the grid as customers blasted their air conditioners day and night, depriving utilities there of sufficient electricity to meet surging demand.
Clean energy critics blamed California’s aggressive pursuit of renewable generation over fossil fuels, dubbing it a wake-up call that shows what’s in store for New Mexico and other states if they completely replace coal and natural gas generation with intermittent solar and wind resources that require back-up power when the sun isn’t shining or the wind stops blowing.
The debate reverberated here as well after Public Service Co. of New Mexico asked its own customers to reduce air conditioner use to conserve energy during this summer’s heat wave. PNM said pockets of cloud cover could lower electricity output from solar facilities.
That prompted Larry Behrens – Western State director for the conservative, pro-fossil fuel group Power the Future – to warn New Mexicans that they too could face blackouts as PNM and other local utilities pursue 100% carbon-free generation under the state’s Energy Transition Act.
“Sadly, New Mexico’s families must continue to face the real consequences of pushing an agenda that doesn’t provide power when we need it most,” Behrens said in a blog.
Behrens and others expressed concern that the state Public Regulation Commission decided this summer to entirely replace coal-fired electricity from the San Juan Generating Station with new solar facilities and battery storage technology when PNM abandons the plant in 2022. The PRC rejected a PNM proposal to construct a new, 280-megawatt natural gas plant as back-up generation to ease the utility’s transition to renewables.
Nevertheless, a careful review of this summer’s problems by industry experts here paints a very different picture of what went wrong in California, and what lessons can be gleaned for New Mexico and other states as they pursue a carbon-free future.
For one thing, renewable energy had very little to do with the problems in California. Rather, extremely poor planning by California regulators and utilities to adequately prepare for the unprecedented heat wave that engulfed much of the West in mid-August was the primary cause for that state’s rolling blackouts, said Doug Howe, a 35-year industry veteran.
In fact, rather than a failure by renewable facilities, it was natural gas plants that temporarily went offline under the strain of the heat wave, Howe said. And with little surplus electricity available on wholesale markets as other states struggled to meet demand from their own customers cranking up air conditioners, California had few resources to draw on, forcing the utilities to impose rolling blackouts to ease the strain on their grids.
“The rush to blame the blackouts on renewable energy is very misplaced,” Howe told the Journal.
Likewise, PNM executives say the biggest lesson from California is not that renewables are a problem, but that extensive, careful planning is critical to provide the back-up power needed through storage technologies and alternative generation to assure adequate supply of electricity in all situations.
And as PNM plans its transition to primarily renewable generation over the next 20 years, the utility is taking those lessons to heart, said Nicholas Phillips, PNM director of integrated resource planning.
“We’ve done studies on California and its contrast with PNM’s grid to make sure we don’t fall into the same pitfalls that California did,” Phillips told the Journal. “California’s problems were not an issue of renewables, but rather a resource-adequacy issue.”
California offers a shining example of what not to do going forward, said Howe, who previously held executive positions at three northeastern utilities and at the Global Power Group run by international consultant IHS Market. He’s also a former PRC commissioner, past chair of the Western Energy Imbalance Market’s governing board, and now director of the Western Grid Group, which promotes strategies to advance clean energy development in the West.
“The failure in planning by California regulators, in my opinion, is probably the biggest single contributor to the problems there,” Howe said. “… California’s planning process is disconnected and out of control.”
California has some of the nation’s most-aggressive renewable energy goals, targeting 60% renewable generation by 2030, and completely carbon-free power by 2045.
As of 2018, the state already derived about 32% of its in-state generation from clean energy sources.
It still generates nearly 47% of its power from natural gas plants, and it imports about 20% from other states. But as California moves to renewable and non-carbon sources, it’s steadily closing down gas plants, shuttering about five gigawatts of natural gas generation just in the last three years.
It aims to replace the gas with more locally produced and imported renewables, while also adding some 3,000 MW of battery storage.
But the battery back-up has yet to come online, and critics say California has moved too fast on shutting down natural gas – criticism Howe said is justified.
“That’s part of the planning failure,” he said. “They’re not adequately timing the decline in natural gas, the import of renewables and the addition of battery storage. … It’s all being done in an uncoordinated way.”
Poor planning also impacted preparations for the heat wave, with utilities and regulatory authorities there failing to secure adequate imports in advance from other states to provide electricity during early evening hours when demand remains high but solar panels stop generating electricity, Howe said. By the time California did turn to wholesale markets to cover its deficit, neighboring states had little excess electricity to spare in the heat wave.
Aggravating matters, units at three natural gas plants with a combined 1,720 MW of capacity shut down in the intense heat, which strains those facilities. A 1,000 MW wind farm also briefly went offline.
“All these things came together to create a perfect storm,” Howe said. “It’s apparent that extreme events like this summer’s heat wave and wildfires in California are becoming more common, and they need to be an integral part of utility planning going forward. … California’s planning and regulatory processes haven’t kept up with the reality on the ground.”
Learning from others’ mistakes
In contrast, PNM is weaving careful planning and preparation into every step of its transition to renewables, said Todd Fridley, vice president for New Mexico operations.
“We’re building our system out with all the problems faced by California in mind,” Fridley told the Journal. “…We‘re building a robust plan to ensure resource adequacy and reliability for the grid all the way through.”
That begins with self-sufficiency, drawing on wholesale markets when it’s advantageous to secure low-cost electricity, but always being ready through integrated resource planning to rely completely on internal assets to meet demand in any given situation.
“California failed the self-sufficiency test,” said Phillips of PNM. “We’re building the resources to act as an island if we need to.”
Backed-up from the get-go
Unlike California, PNM will include substantial battery storage starting with its first deployment of new solar facilities to replace San Juan power. Under the PRC-approved plan, a total of 650 MW of solar will be added to the grid, backed up by four-hour batteries that can collectively offer up to 300 MW of electricity.
Batteries are measured in “megawatt hours,” meaning the San Juan replacement batteries can provide a combined 300 MW of power for up to four hours when fully charged to continue sending electricity to the grid at night, or during cloudy days when solar-facility output declines.
It will be PNM’s first large-scale deployment of batteries, but the utility expects to add a lot more as more renewables come online over the next 20 years. In later stages, it could incorporate much longer-duration batteries to provide six to 12 hours or more of power, said PNM Vice President for Generation Tom Fallgren.
That’s critical, because the more that intermittent solar and wind generation is added to the grid, the more back-up will be needed when output from those facilities declines or is unavailable.
Battery technology is still developing, but longer-duration systems should become widely available over the next decade, and prices are expected to decline significantly through greater efficiency and economies of scale as widespread deployment kicks in, Fallgren said.
As the transition to carbon-free generation gains momentum, PNM will also seek other forms of power storage. That could include things like carbon-capture technology for natural gas plants, or conversion of those facilities to hydrogen-fueled generation. “Pumped water” and “compressed air” storage could be considered as well, whereby water is pumped into reservoirs and air is compressed into underground cavities to later release the water when needed for hydro generation or unleash the air to run turbines, Fallgren said.
Those technologies are still emerging. But PNM will aggressively explore the alternatives as it begins in 2028 to shut down its current fleet of natural gas plants, and as the company prepares to move from 50% renewables in 2030 to 80% by 2040 as outlined in the Energy Transition Act.
Balancing the equation
Under the San Juan replacement plan, battery storage will represent about 15% of capacity available during “peak-load” periods. That’s when demand reaches its peak in hot summer months and the grid requires the availability of about 2 GW of power capacity.
“Once batteries get to about 20% of peak-load capacity, we’ll need to move to different storage technologies to maintain grid reliability,” Fallgren said. “We’ll be looking beyond lithium ion batteries to get to carbon-free generation.”
Apart from storage and alternative generation, energy efficiency technologies will also play an important role to conserve power during peak periods and reduce demand overall, said Patrick O’Connell, a former PNM executive and now senior policy analyst with Western Resource Advocates.
The San Juan replacement plan, for example, includes 24 MW of “demand response” programming, through which PNM enrolls customers in a plan to shut off air conditioning and other devices for short periods during peak summer months.
“As we transition the grid, no single thing stands by itself,” O’Connell told the Journal. “It’s a lot of things working together. … With each step in the transition, a richer pallete of resources will become available.”
There are significant challenges ahead, beginning with the learning curve associated with battery technology, which must be able to switch on and off as needed in a millisecond as solar or wind output rise and fall, Fallgren said.
“That requires sophisticated algorithms for charging and dispatching energy to and from the battery at any given time, and industry doesn’t yet have a lot of experience with it,” Fallgren said. “PNM will be at the forefront of building that algorithm, because it doesn’t exist right now.”
In addition, the batteries in the San Juan replacement plan are all directly connected with the new solar facilities, and for the first five years of operation, they can only be charged by those same solar plants in order to meet conditions attached to federal tax incentives available for new solar-battery projects. That means no other generating sources like wind turbines can send energy to them until after five years, and it remains to be seen how well the solar plants alone can keep them fully charged and available as needed.
That’s one reason PNM proposed a new 280-MW gas plant as part of San Juan replacement to strengthen grid reliability as the utility integrates battery technology for the first time, Fallgren said. Going forward, the company will stress those types of reliability issues a lot more when replacing fossil fuel generation with renewables to ensure system stability.
But the challenges are not insurmountable.
“Do we have some concerns? Yes,” Fallgren said. “Can we overcome them? Yes.”
The staggered transition outlined in the state’s new energy law will also help a lot to ensure reliability, Phillips said. PNM’s gas fleet, for example, will be slowly phased out stretching into the late 2030’s, and the law includes flexibility clauses that allow utilities to pause if needed as they transition to all-carbon-free resources by 2045.
“It’s not an overnight transition,” Phillips said. “We still have access to wholesale markets, we still have gas-fired plants, and the transition is spread out over 20 years, during which time we’ll see a lot of new technology developed and declining costs for those resources. … And the law gives us some latitude if we have reliability concerns along the way.”
No grid can ever be 100% protected from extreme events like this summer’s heat wave, Howe said. But utilities try to reduce the possibility of blackouts to an absolute minimum, with a general industry standard of no more than one such occurrence in 10 years. Such events are rare, and when they do occur, the first thing utilities do is ask customers to conserve energy to help avoid outages, which is what PNM did this summer.
“It was a precautionary measure given the tight conditions in the energy markets,” Fridley said. “It doesn’t happen often, but conditions warranted it, so we asked customers to help reduce the load on our system.”
Fridley said PNM is fully committed to achieving carbon-free generation, and its carefully planning the transition to retain reliability and avoid the kinds of problems that California has faced.
“We need to build reliability into the system ahead of time, and that’s what PNM is working toward,” he said. “It’s a work in progress and we’ll check ourselves every step of the way. But so far, we’re confident we’re moving in the right direction.”