The true impact of our current national renewable vision is the massive public cost needed to transform our power grid to accommodate variable energy resources, despite the fact that these resources are not guaranteed to deliver energy at the very time of day and year when we need it the most.
The unpredictability of variable energy resources will become more problematic as the country aims to deliver more remotely-sited generation to population centers on the East and West Coasts. The DOE and state regulatory bodies have argued that geographically dispersing renewable projects nationwide will help to dampen the broad swings in available energy, but this provides no assurances that the energy will be where or when we need it the most.
It is well established that the traditional power market responds to energy and capacity market signals. However, current policies that encourage renewable generation at the State and Federal levels reward all renewables equally for placing a megawatt-hour of energy on the grid.
There is no adjustment to the federal or state subsidies based on time of day or seasonal demand requirements nor is there a meaningful adjustment for location of the power facility. These policies have created artificial and unsustainable market pressures; thus, compelling system planners to respond with more transmission and the fast-tracking of renewable projects that may be not only not needed but actually of poor quality from a grid reliability perspective.
If renewable subsidies were to discriminate in favor of those renewables that produce close to load and during the time of day and year when the energy is most needed (i.e. capacity rather than energy), we would expect the response in the market to be almost immediate. The need for expansive transmission would drop off. More renewables would be proposed for sites closer to our population centers and that can service our peak demand periods. The market would decide which renewable solutions best met the goal. Rather than seeing 125 megawatts of unpredictable wind built we might get 25 megawatts of baseload biomass; rather than remote-sited solar generation in the Mojave desert requiring 100 to 200 miles of new transmission, we may see a greater effort to build rooftop solar in California's cities. Reliable generation would mean less need for storage, less redundant generation and a better opportunity for replacing fossil fuel generation with renewables rather than merely displacing some fuel.
While public policy regarding renewables has helped the emerging renewables market, it is time these policies were amended to better suit the public's needs. We recommend abandoning ill-defined plans to reinvent our existing electric system so it can better accommodate variable energy renewable sources, and focus on consumer-centric, market-based policies that will move us towards real world, reliable solutions for our renewable generation.
We respectfully ask that the Commission not adopt more lenient rules governing the integration of variable energy resources. Instead, we ask that the Commission request ISO/RTOs to prepare proposals that adjust the non-energy market signals to all renewable generation. These proposals would be designed to incent renewable generation to build closer to load, be capacity resources, operate on-peak and on-season and discourage the opposite behavior. Upon the receipt of these proposals, the Commission would prepare a report to Congress, the Department of Energy and the various state regulatory commissions on the Commission’s findings and recommendations.