Oakland Peaker Plant – Web Format
This 40-year-old peaker plant is a source of air pollution near Jack London Square and the Port of Oakland. Photo by Alec MacDonald.

Janice Lin has a favorite metaphor for how large-scale energy storage can change the future of California. “Humans store their energy as fat, all over their bodies, so they can function without eating all the time,” explained Lin, CEO at Strategen Consulting and a co-founder of the California Energy Storage Alliance. “But our electrical grid was built with the assumption that we can’t store energy, like a hummingbird that has to eat all the time. With the grid, supply has to equal demand, so we overbuilt everything — sized it to meet the highest level of demand, with lots of infrastructure.”

Some of that infrastructure was “peaker plants,” designed to meet heavy demand by kicking in extra power for brief periods of time, like a snack to keep the hummingbird going. A typical peaker plant is the Dynegy plant right beside Jack London Square in Oakland. It’s 40 years old, relatively small (168 megawatts) for a power plant, and gets used maybe 35 days a year.

It’s one of 27 peaker plants in the state, and one of three left in the Bay Area after the closure of the Potrero Power Plant units in San Francisco. Like Potrero, but unlike the Calpine peaker plants at Gilroy and San Jose, it burns jet fuel instead of natural gas. Its six turbine engines have the potential to emit 11 tons a year of small particle pollution, even running so few hours. The Potrero plants were closed in part because they were adjacent to Bayview-Hunters Point, a disadvantaged community. The Dynegy plant is next door to West Oakland, which has its own environmental problems.

When peaker plants run, it’s because they’re really needed to prevent some type of outage in the overall electrical grid. Going without that energy is not an option, but storage may help to replace the dirty power with clean power, in Oakland as well as elsewhere. The problem has been that two of the fastest-growing sources of renewable energy, solar panels and wind turbines, are constrained by the laws of nature, making them intermittent and sometimes unpredictable, and creating excess supply at times. Utilities might need to turn away clean energy early on a hot summer day, and then use dirtier peaker plants to meet air-conditioning needs in late afternoon. “When you introduce storage, energy can be supplied when needed, not just when it’s produced,” said Lin.

Lin and many others credit Assembly Bill 2514 (Skinner), passed in 2010, for kick-starting the storage solution. Crafted as a strategy to help California achieve its environmental goals, AB 2514 directed the California Public Utilities Commission (CPUC) to look at requiring utilities to purchase storage, and then set a mandate if storage was determined to be feasible. After several years of study, the CPUC determined that some forms of storage could be cost-effective; in June 2013 it issued a mandate to utilities to purchase 1.3 gigawatts of storage by 2020. As Lin put it, their conclusion was, “This stuff is pretty useful.”

The three major utilities in California have been working to meet the mandate, and are finding that new technologies can help them do that. As one example of new flexibility, Lin cited the rapid deployment of storage projects to meet the energy need created by the leak at Southern California Gas Company’s Aliso Canyon natural gas storage facility. She also pointed to an October 2017 California Energy Commission rejection of an NRG Energy replacement facility at its Puente Power Plant in Oxnard, based on a finding that storage plus drawing directly on available “preferred sources” such as solar and wind could fill the need. “Now we have so many different types of storage, we can use them in many different ways,” she said.

Paul Doherty, a PG&E spokesperson, says the utility is “tech-agnostic — we are evaluating the roles of the various technologies in California’s energy future.” PG&E has selected companies using lithium-ion batteries, zinc-air batteries, and flywheel kinetic energy storage, an emerging technique for multi-hour storage. In 2016, PG&E conducted its EPIC project using sodium-sulfur batteries at its 2-megawatt Vaca-Dixon large-grid solar farm and its 4-megawatt Yerba Buena facility to prove that it could store power and serve it back to the grid, supporting greater integration of intermittent sources like solar and wind.

PG&E installed 22 Tesla Powerpack batteries at its Browns Valley facility in early 2017, its first lithium-ion battery units. They can store half a megawatt, enough to power almost 400 homes at a time, and provide power for four hours. Doherty noted, “This is the first system to address ‘summer peaks’ with people coming home on summer evenings needing energy” that was generated during the earlier part of the day. In December, PG&E announced agreements for six new lithium-ion storage projects totaling 165 megawatts which will begin to come online by the end of 2020, adding to 79 megawatts purchased since 2015.

In Oakland, PG&E plans to use a combination of storage and “distributed energy resources” — renewables, upgraded infrastructure, and techniques such as demand management with smart thermostats — to replace the Dynegy plant’s occasional but critical contribution to the grid. Storage will be provided by a 10-megawatt battery system, able to provide power for up to four hours. The remaining 20 to 40 megawatts of capacity will be provided by the other resources. “We are balancing energy supply and demand, as we move from a one-way grid to the new dynamic of a distributed energy system and a two-way grid,” Doherty said.

PG&E developed a proposal for an Oakland clean energy initiative with input from environmental and community stakeholders. Participant Jamie Fine, a senior economist with the Environmental Defense Fund, noted that PG&E presented the proposal as an opportunity to avoid a large transmission facility to provide power if the plant closed. “Both options are assets that add value for shareholders. The current proposal increases the cost to consumers even if it’s a greener solution,” he cautioned.

However, he believes that the initiative is a harbinger of progress to come: “It’s the process we are demonstrating and we can go on from here.” Because the aging plant is essential to the grid’s reliability, the proposal must be approved by the California Independent System Operator, probably in March 2018, before going to the CPUC for other approvals. If it clears these hurdles, the project should be functional by 2022.

The Oakland project will test the feasibility of using storage plus distributed energy to both meet the state’s energy needs at peak periods and also utilize the full production from intermittent renewable energy sources. PG&E has also been authorized by the CPUC to look for options, including storage, to replace power from three Calpine plants, including the 580-megawatt Metcalf plant near San Jose. In its resolution E-4909, the CPUC stated, “Energy storage and preferred energy resources can be fast-responding, reliable, and constructed in a short timeframe. Energy storage and preferred energy resources are procured at increasing levels to meet local reliability requirements including capacity shortfalls, in lieu of conventional generation.”

New legislation signed in 2017, Senate Bill 338 (Skinner), requires utilities to develop carbon-free alternatives to gas generation — shifting demand, energy efficiency, and storage — for meeting peak demand, as part of their integrated resource plans. Lin feels that legislation like SB 338 is helpful, but no longer crucial to increasing the role of storage. “The original legislation, AB 2514, was the focus we needed, but now … the driver is really the need for storage. Storage is an awesome tool in the toolkit to meet our needs,” she concluded.

Fine feels that grid-level storage is only a start. He would like to see increased use of homes, businesses, and vehicles for storage and generation. “We haven’t planned out our grids with the community’s needs first,” he said. “The future of the grid needs to be approached differently.”

Leslie Stewart covers air quality and energy for the Monitor.