Regulatory policies and incentives to push adoption of CSP in California

If there is one thing, which stands out about the Sacramento Municipal Utility District (SMUD), it is its meticulous approach towards stepping up reliance on renewable energy sources.

It aptly reflects in the manner in which SMUD, which is the sixth largest publicly owned utility in the US and is an independent local government entity, has gone about its commitment towards the same.

For example, recently, it was highlighted that for the first time, there will be imposition of renewable-energy requirements on publicly owned utilities like SMUD and the Los Angeles Department of Water and Power. This November, Californians will have a chance to vote on the Solar and Clean Energy Act of 2008. The initiative, Proposition 7, would substantially increase renewable-energy targets. It requires all of California's electric utilities to generate 20 percent of their energy from clean, renewable sources by 2010 and even larger goal of 50% renewables supply by 2025.

But for its part, SMUD, which generates, transmits and distributes electric power to a 900-square mile

territory that includes California's capital city, Sacramento County and a small portion of Placer County, says its already well ahead of schedule in making progress towards the same.

The utility has set a 2011 renewable energy supply goal of 23 percent, according to Mike DeAngelis, manager of SMUD's Advanced Renewable and Distributed Generation Technologies programme told CSPToday.com.

"We often try to exceed any state-wide goal," said DeAngelis, speaking ahead of CSPToday's second CSP Summit US scheduled to take place in San Francisco on 30th September – 1st October this year.

In fact, he was recently quoted as saying, "Just throwing out a round number and a year doesn't make it happen (about initiative's 50 percent target by 2025 target). SMUD has been a leader in procuring clean energy and promoting "green pricing" even without a state mandate."

SMUD's renewable energy supply goal of 23 percent comprises 20 percent Renewables Portfolio Standard or RPS plus three percent Greenergy (i.e., a voluntary green pricing program for customers). To get a sense of what the goals mean in terms of the scale of renewables, 23% of retail electricity load in 2011 for SMUD is about 2,800 GWh of electricity, or enough electricity for more than 340,000 new homes.

SMUD currently receives about 17 percent of its power from renewable energy sources – not including the clean, Large Hydro power it receives from the Upper American River Project, approximately 20% of supply in an average year.

Till 2006, it was shared that despite its popularity solar represented less than one percent of SMUD's renewable energy portfolio. Larger contributions estimated in 2006 were from wind (45 percent), geothermal (26 percent), biomass (22 percent), and small hydro (six percent).

"For SMUD, the contribution of solar is still less than one percent. But this percentage will grow significantly over the next decade. It is expected to become a major supplier of electricity over the next 20 years or so," said DeAngelis.

He added, "There are a lot of political pressures and policies to move to greater renewable supplies state-wide and also it is part of a strong policy with SMUD's Board of Directors to increase renewable energy supply for our region. If you consider issues related to wind, geothermal and even biomass to an extent, these renewable resources often are located remotely from transmission and load centers. An advantage with solar on the whole in California is that it can built closer to load centers without the need for major transmission lines. Transmission is very hard to build especially considering regulatory policies and procedures, it takes 10-20 years to plan and build transmission and there is often major local public opposition. CSP with storage also provides the ability to meet summer peak loads with high reliability, providing a compatible match to other intermittent renewables such as wind and PV."

For its part, SMUD has been continuing to grow distributed solar as it has exceeded 10 megawatts in solar PV capacity for the first time last year.

On key drivers for CSP, DeAngelis said firstly, it is the strong California policy movement to increase renewable energy supply. "Also, renewable portfolio standard is a key driver, along with extension of tax incentive at the federal level. The investment tax credit in particular can help reduce significantly the cost of CSP power production to utilities. Another key driver would be changes in greenhouse gases regulations, which we know in California would add significant emphasis to renewable portfolio standard requirement. In fact, we expect that the 33 percent renewable energy supply target by 2020 will be an important California Air Resources Board policy for Califfornia to achieve 1990 emissions levels by 2020 under AB 32."

In the recent past, SMUD has signed an agreement with homebuilder Woodside Homes to help fund the construction of 1,487 energy-efficient solar homes, the largest deal to date between a utility and a homebuilder in the United States.

DeAngelis also refers to projects in the pipeline such as ones from Pacific Gas and Electric Company (PG&E). "It is expected to bring in over 1200 MW concentrated solar thermal energy, going by the projects signed till date. There are several projects and it is expected to materialise during 2011-2014 period. These are only projects initiated by PG&E, not SMUD's projects. Overall, there is planned a large number of solar thermal projects, mostly in the Southern California desert," he said.

Specifically on the potential of the state on the whole from CSP's perspective, DeAngelis pointed out to the profile of North California vis-à-vis southern part of the state.

"The Northern California region where SMUD is located tends to have wet cloudy winters and poor direct normal solar radiation.. Whereas deserts in the Southern California remain relatively dry and sunny through the winter and summer. On an annual basis, comparing direct normal solar radiation (DNR), the SMUD service territory has 29% less DNR than deserts in the Southern California desert," he said.

DeAngelis, however, added that during four summer months, there is very little difference in the overall direct normal solar radiation in the two areas. "The difference comes down to only about three percent during these four months. But even that would be made up from transmission losses from a CSP plant in the Southern California desert," he said.

Last year, it was acknowledged that any attempt to turn Greater Sacramento into a green-technology hub would require a solid foundation of research into new approaches to reducing waste and conserving energy.

DeAngelis agrees with this and says two institutions in University of California Davis and California State University Sacramento are well equipped to provide with in-depth research.

"The Sacramento region is quite fortunate to have these two great Universities. They provide a solid base for learning, are research-oriented…also the region's economic development  focus is on clean technology. Plus we also have a public interest energy research programme in the Sacramento region at the California Energy Commission called PIER" he said.

In terms of waste and conserving energy, he said, SMUD has been a strong leader in this arena. We have adopted a 15 percent target over 10-year period of reducing both customer electricity consumption and also reducing our peak load. In addition, we have a "Problem Waste Green Electricity Program" and we provide incentives to dairy companies for digesters that would produce anaerobic digestion gas for electricity generation. The two dairy digesters are going to be operational in July and September of this year. We are also working on grease waste and food waste disposal in digesters to produce renewable electricity. These are just examples  of problem waste to green electricity projects ongoing in the Sacramento region."

 Mike DeAngelis, manager of SMUD's Advanced Renewable and Distributed Generation Technologies is scheduled to speak during CSPToday's second CSP Summit US scheduled to take place in San Francisco on 30th September – 1st October this year.

For more info, click here: http://www.csptoday.com/us/programme.shtml

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Contact:

Sara Lloyd-Jones
International Director
CSP Today

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