Grid reliability concerns with growth of residential solar in California
CAISO’s infamous “duck curve” graph and future implications in wholesale power markets
Renewable generators are being integrated into the power grid at a blistering pace. Savvy consumers looking to reduce their utility bills are adopting solar panels in growing numbers. Much of this growth is observed in California where 31% of the United States’ total added small-scale solar capacity came from this state in 2020.1 These milestones create substantial challenges for grid operators. I will address that topic following a quick background on the power grid.
Electricity is the most unique commodity as it is produced and consumed simultaneously. The power grid must be balanced at all times, else risking anything plugged in be permanently damaged. Grid operators adjust power plant output to navigate and match generation supply with system load, or energy demand. Renewables present unique challenges in that regard given environmental factors impact whether or not the wind is blowing or the sun is shining.
California is the king of rooftop solar. As illustrated above, about one-third of all rooftop solar installed in the US occurred in California in 2020. The adoption of residential solar creates a curious phenomenon when observing the load curve for the state on a given day. Normally, load or energy demand drops off in the overnight hours and around 3:00-4:00 AM, it begins to climb as people wake up and prepare for the day. The curve continues rising, cresting around 9:00 AM and then tapers off late morning into the afternoon. The exception to this is summer when air conditioning load increases as the day goes on with rising temperatures.
With rooftop solar, the afternoon load trough is exaggerated. As the sun rises, you immediately see load growth stall out around 07:30-08:00 in the morning. The natural effect of declining demand for power following morning peak is compounded as you now have solar panels trimming the electricity needs of homes and businesses. Around 2:00 PM, net demand is at its lowest part of the day.
When shifting into the late afternoon, you have a steep ramp up in energy consumption. This, too, is a natural pattern; however, its magnitude is amplified as the sun goes down, solar production falls off. The “hidden” demand reappears just as people are returning home from work, turning lights on, watching TV, and cooking dinner. The infamous “duck curve” is born where the load graph for the day resembles the shape of a duck as you can see below.
Where things get tricky for grid operators is that afternoon trough. Intuitively, one would think the primary risk when keeping the lights on is having too little power generation. The situation of having overgeneration is also an unfavorable state for the electrical grid. As more solar is adopted, that afternoon load will continue to dissipate, aggravating an overgeneration condition. The solar panels “hide” demand that shows up later in the day.
In that scenario, system operators must shutdown or curtail the rest of their generation fleet. This leaves the grid vulnerable as fewer online reserves exist to manage moment-to-moment fluctuations. You need a lot more flexible, quick-fire resources that can come online within seconds or minutes to effectively manage these scenarios.
The evening is also problematic. With a steep load ramp across such a small window of time, the question becomes: Do you have enough power plants available with enough ramping capacity to match it? CAISO, California’s wholesale electricity market, relies on outside imports to alleviate these issues. It’s a plan, but perhaps not the most prudent to have.
Technology will be the path to solving the “duck curve.” Batteries have a harmonious pairing with renewables readily smoothing out their rough edges. The symbiosis is evident during the periods of solar overproduction. Under those conditions, operators can switch on batteries to become load centers pulling power from the grid. This has a buoying effect for the afternoon demand curve. It also dampens the evening ramp as you start from a higher load base that drops off as natural demand is picking up. The batteries transition from load sinks to generation sources by discharging onto the system adding supply to the footprint.
The paradigm for the power grid since inception has been matching supply to demand. The shift is already occurring where we are now matching demand to supply. California is the market on the frontier of this new normal. Electric cars are another element altogether to factor in where our “peak load” may be set in overnight hours rather than traditional morning/evening.
Ultimately, technology is transforming how utilities and our power grid operate. We are moving more and more to a hyper-dynamic model where flexibility will be rewarded and compensated. The challenges will come for those who keep our lights on—the system operators—who will have to approach the job in a way different from anyone before them. That’s what makes this industry so fun to follow.
EIA. March 4, 2021. Today in Energy. https://www.eia.gov/todayinenergy/detail.php?id=46996