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With California now requiring 50 percent of energy needs to come from renewable sources by 2030 and unprecedented drought and wildfire underscoring the need for aggressive reductions in greenhouse gas pollution, it should be obvious that investing hundreds of millions in new polluting gas plants is a bad idea. Yet it seems Southern California Edison (SCE) hasn't gotten the memo. Case in point: its request to the California Public Utilities Commission (CPUC) to approve a 20-year contract with the 98 MW Stanton Peaker Plant. As I blogged about last year, this gas plant is part of a suite of requested resource approvals intended to replace the San Onofre Nuclear Generating Station and retiring coastal power plants. While some aspects of SCE’s resource requests are groundbreaking, it remains overly fossil-fuel centric, with two large new combined-cycle gas plants, the 98 MW Stanton peaker, and, as my colleague Alison wrote, 70 MW of fossil-fueled back-up generation attempting to pass as clean energy.
Let's take a closer look at the Stanton peaker. Gas should always be a resource of last resort. How does Stanton fare against questions typically asked in deciding whether a new gas plant is necessary?
"Is the Stanton peaker the best deal for SCE's customers?" No. When SCE evaluated the results of bids to meet its resource needs, Stanton was so expensive it didn’t even come up. SCE only contracted with Stanton after rejecting far more cost-effective energy storage options. In this case, SCE is asking the CPUC to approve a gas plant that is significantly more costly than clean energy alternatives. This is the exact opposite of what is required under the Loading Order, California's landmark clean energy policy that requires utilities to contract with all cost-effective clean energy resources before resorting to fossil fuels. Given the cost differential, it's no wonder ratepayer advocates also oppose the deal.
"Is the Stanton peaker needed to bring more renewable energy on-line?" No. Fossil fuel interests often claim that new gas plants are needed to provide power "when the sun doesn’t shine and the wind doesn't blow." What are really needed are resources like energy storage that are capable of shifting energy from periods of high renewable production to later in the day. With California now moving to at least 50 percent renewable energy by 2030, a key challenge will be to address overgeneration. Overgeneration occurs when energy provided by renewables and by baseload resources that operate continuously exceeds demand. It's projected to increasingly occur as more renewables come on-line, particularly on sunny spring days when solar production is high and demand is low. Because Stanton cannot absorb energy during overgeneration periods, it will not help California meet its increased renewable requirements.
"Is the Stanton peaker required to keep the lights on?" No. SCE's application for new resources already contemplates repowers of coastal plants at Huntington Beach and Alamitos that will bring over 1,250 MW of new gas on-line, well in excess of the 1,000 MW of fossil fuels the CPUC originally required. Even more gas is simply not needed. The California Independent System Operator (CAISO), the entity charged with managing the grid and keeping the lights on, has historically strongly advocated for the need for new gas plants. In this case, in the face of strong objection by Sierra Club and ratepayer advocates that the Stanton peaker is an imprudent investment, CAISO has remained on the sidelines and not stated Stanton is required to ensure grid reliability. Because the resource needs SCE is seeking to meet do not emerge until 2022, there is ample time to develop clean energy resources rather than build yet another carbon-intensive gas plant that commits California to fossil fuels for decades.
In past fights over new gas plants like Pio Pico or Carlsbad, the Commission has lamented the lack of clean alternatives to gas. "If only storage were cheaper or more available," is a common refrain. "We simply can't trust clean energy to keep the lights on yet; if only it were more proven," is another rejoinder. The Stanton peaker tests the CPUC's commitment to clean energy. Here Stanton is not required to maintain grid reliability, storage is a much cheaper option under SCE's own models, and storage will be needed to help achieve 50 percent renewable requirements. What better scenario to pick clean over dirty? What other hurdle must clean energy overcome before the Commission puts its weight behind it?
There's a lot at stake. This may be the first instance where storage is beating gas on cost-effectiveness and the implications are nothing short of historic. Once storage is proven more cost-effective than peakers at a scale like this, there's no turning back.
The CPUC is rarely faced with a case as clear cut as this one. The CPUC should signal to the public and SCE that it takes its duty to protect ratepayers and the environment seriously, reject this superfluous, costly and environmentally damaging project and replace it with clean energy solutions.