To realize what the power sector can do to support energy storage’s key role in aiding the path to net zero, we need to understand the current situation in the U.S. Western region.
The California ISO, the only independent western U.S. grid operator, handles more than a third of the West’s load, including 80% of California and parts of Nevada. CAISO has been a leader in incorporating renewables into the grid in support of California’s renewable portfolio standards. The growth of renewables in CAISO’s footprint has caused several operational issues. Most notably: the energy load “duck curve,” a graph showing the difference in electricity demand and amount of solar energy available through the course of the day. The duck curve is a result of mid-day generation oversupply from high amounts of solar energy, leading to market supply/demand imbalances, depressing market prices and impacting grid reliability.
Due to renewables oversupply and the variability of solar, it’s been difficult for CAISO operators to effectively balance energy supply and demand. What’s needed: additional generation resources to meet peak demand requirements and the associated ramp that poses a risk to grid stability. As more solar comes online, the grid changes from one that managed central synchronous generation to one with more distributed power electronics-based solar, increasing the need for regulation services.
Even with substantial investment in procuring renewable resources, CAISO imports more than a quarter of its electricity needs from surrounding states. This reliance poses a risk during summer months, when extreme hot weather conditions can limit the ISO’s ability to draw power from the other regions. CAISO’s approach to overcoming these challenges and integrating renewables has included system operation changes, expansion of the EIM, more flexible load and baseload generation management and the use of storage to counteract variability. The hallmark of its actions has centered on energy storage.
CAISO’s progressive effort in developing policies and market design changes to incorporate the unique capabilities of energy storage resources while providing fair compensation is an important factor for why CAISO is such an attractive environment for storage deployment.