California’s robust solar industry has surpassed another threshold—supplying roughly 50 percent of the state’s electric needs, according to the Energy Information Administration (EIA). The agency reported that the increase in solar power resulted in wholesale electric prices that were below $0 per megawatt hour.
The administration, part of the the Department of Energy, attributed the amount of solar energy on the grid to numerous factors, including the 5.4 gigawatts (GWs) of distributed solar energy in the state. “Total solar capacity in California (including both distributed and utility-scale systems) has grown from less than 1 GW in 2007 to nearly 14 GW by the end of 2016,” EIA’s Chris Namovicz, a principal contributor to EIA’s Today In Energy, stated.
“On March 11, utility-scale solar generation in the territory of the California Independent System Operator (CAISO) accounted for almost 40 percent of net grid power produced during the hours of 11:00 a.m. to 2:00 p.m. This is the first time CAISO has achieved these levels, reflecting an almost 50 percent growth in utility-scale solar photovoltaic installed capacity in 2016,” he wrote. Between that and the energy coming from distributed solar arrays, EIA estimated that solar power would have generated approximately 4 million kilowatt hours (kWh) for a short time. “This level of electricity reduced the metered demand on the grid by about the same amount, suggesting that the total solar share of gross demand probably exceeded 50 percent during the mid-day hours.”
EIA said that the amount of solar power in the state has already occasionally driven electric prices on the CAISO to very low, and sometimes negative, prices. “In March, during the hours of 8:00 a.m. to 2:00 p.m., system average hourly prices were frequently at or below $0 per megawatt hour (MWh),” Namovicz said. Previously, in March, between 2013 and 2015 prices were between $14 per MWh and $45 per MWh. “Negative prices usually result when generators with high shut-down or restart costs must compete with other generators to avoid operating below equipment minimum ratings or shutting down completely,” he explained.
Despite the lower wholesale prices, consumers in California aren’t seeing their average retail prices go down, according to EIA. That’s because prices are based on averages over time and not single days.
“It does mean that Californian utilities and energy companies will need to rethink what the integration of such a high level of renewable energy means for the state’s electricity delivery and pricing,” said PV Tech’s Danielle Ola. “The situation already has led to the curtailment of solar production during peak hours, with thousands of MWh of potential energy getting switched off, even as other non-renewable plants continue to produce. The introduction of grid-energy storage will be required to effectively supply 24-hour demand from renewable sources.”
EIA made a similar observation. It said the state needs more dispatchable electric generation sources to help cover such periods when solar power ramps up quickly. This also is true of other generation sources, according to EIA. It pointed to the above-average rain and snow California experienced this past winter, which has led to high levels of hydropower generation, which could also impact the recent electric pricing patterns.Tweet