Last week, the California Senate and Assembly passed a bill that would require utilities and the California Public Utilities Commission to consider the use of distributed energy resources, energy storage, and grid operational efficiencies to meet peak energy and reliability needs while reducing the need for new electricity generation and transmission. The bill is now before California Governor Jerry Brown for approval.
A similar proposal to encourage clean energy specifically during peak load hours was recommended last year by the Arizona Residential Utility Consumer Office (RUCO). Often, the output of variable renewable resources (such as solar) does not correspond with the periods of peak electricity demand. As the RUCO report notes, traditional renewable portfolio standards (RPSs) do not look at what times of day renewable energy is consumed. As a result, RPSs can result in an oversupply of renewable generation during the middle of the day, while conventional resources are needed to provide power during the hours of peak demand. To address this issue, RUCO recommended “Clean Peak Standards” that would require a minimum percentage of energy delivered to customers during peak load hours to come from renewable sources.
The bill passed in California aims to minimize the need for additional conventional generation to meet peak demand. It would require utilities’ integrated resource plans to specifically consider “the role of existing renewable generation, grid operational efficiencies, energy storage, and distributed energy resources, including energy efficiency” in the hours of peak electricity demand. According to the September 6, 2017 Senate Floor Analyses, the bill is designed to help California shift demand to times of the day when clean energy is more abundant, reducing the need to build more transmission and natural-gas-fired plants.