How Can We Turn Down the Gas in California?

California’s deep commitment to addressing climate change and transitioning away from fossil fuels has helped establish the state as a worldwide hub for clean energy investment and innovation. Thanks in large part to the Renewables Portfolio Standard or “RPS”— a policy enacted first in 2002 and ramped up over time—renewables now meet about 30 percent of California’s electricity needs while the state is on track to reach its 50 percent renewable target by 2030.

But California also has a lot of natural gas-fired power plants that release greenhouse gas emissions and pollute our air. After the state deregulated its electricity market in 1998, a combination of market manipulation and price caps led to skyrocketing electricity prices and rolling blackouts in 2000 and 2001. To make sure the state would never be left in the dark again, utilities and independent power plant owners built more natural gas power plants.

By the time this new generation capacity came online, the Great Recession was underway, the economy was slowing down and the state had also committed to greater reliance on clean, renewable electricity to address air pollution and climate change concerns. In 2002, renewables supplied just 11 percent of the state’s electricity needs. But in 2011, the state passed a law to reach 33 percent renewables by 2020, and in 2015 increased that to 50 percent by 2030. Today, clean energy advocates, including UCS, are supportive of 100% clean energy goals that would push renewables even higher.

For a while, renewable energy generation and natural gas power plants largely coexisted on the California grid. In some cases, it’s been a symbiotic relationship. The generation patterns of wind and solar are weather-dependent, making it necessary to find additional sources of power to meet energy and grid reliability needs when those resources are not around. In the past, California has used natural gas to play that role.

But as the state doubles down to reduce global warming pollution throughout all sectors of its economy, this means transitioning away from fossil-fueled electricity generation. Clean electricity will be a central strategy for reducing emissions associated with traditional electricity use as well as reducing emissions associated with transportation and buildings. Replacing vehicles currently running on gasoline and diesel with vehicles powered by renewable electricity will significantly reduce air pollution. In addition, the state now depends on natural gas to heat most homes and buildings; affordable renewable electricity will also provide a cleaner fuel source for those needs.

California still uses a little bit of coal, but most of it will be phased out by 2020. In 2017, natural gas still supplied about a third of state electricity demand. If our goal is to decarbonize the electricity sector and reduce air pollution, we must continue to ramp up renewables while at the same time turn down the gas.

How much gas could California retire?

To understand what a cost-effective transition away from natural gas might look like, UCS analyzed the operations of the 89 combined-cycle (CCGT) and peaker natural gas plants located in the territory of the California Independent System Operation (CAISO), the grid operator that manages the electricity flow for about 80 percent of the state. UCS used an investment optimization model to identify how much gas generation could be economically retired between 2018 and 2030 while meeting the state’s mandated global warming emission reduction target and maintaining grid reliability.

According to the UCS analysis, California does not need to build any additional gas generation capacity in the CAISO territory to meet 2030 energy or grid reliability needs. In fact, nearly 24 percent of both CCGT and peaker capacity could be retired without negatively affecting grid reliability. This translates into 28 natural gas plants retiring by 2030. In addition, 12 of these plants are located in communities that are disproportionately burdened by air pollution.

In addition, the UCS analysis found that many more peaker plants could be retired if clean energy investments—like energy storage—were strategically located in certain areas on the grid that need local generation capacity to keep the grid reliable during power plant or transmission line failures.

What happens to the remaining plants?

UCS also analyzed how the operations of the remaining natural gas plants by 2030 would change over time.  UCS’s results indicate that even as natural gas generation decreases over time as California ramps up renewable generation, many natural gas power plants may turn off and on much more frequently in 2030 than they did in 2018, potentially resulting in an increase in criteria air pollutant emissions like nitrogen oxides or NOx. This is because more solar generation will be available in the middle of the day, making natural gas generation less needed.  But in the evening, as the sun sets, gas plants will have to be turned back on to meet evening electricity demand, unless cleaner technologies like other renewables, energy storage, and shifting load to reduce demand are substituted. In the most likely 2030 scenario, 16 of the 23 remaining CCGT plants modeled would go from starting and stopping close to zero times in 2018 to at least 200 times per year by 2030.

This increase in natural gas cycling could be a problem for air quality and the communities living near these plants because the NOx emissions associated with starting up a natural gas power plant can be much higher than a plant constantly running in steady-state operations. More analysis is required to understand how changing gas plant operations will impact air pollution and public health, in order to avoid a potential unintended consequence of more air pollution from natural gas plants as the state strives to reach future renewable energy and climate change goals.

In order to start getting a handle on how the natural gas fleet is changing in real-time, UCS is co-sponsoring Senate Bill 64, which would make more accessible the data associated with the hourly startup, shutdown, and cycling of California’s gas fleet and require local air districts to analyze how changing power plant operations may be impacting air quality. SB 64 would also require state energy agencies to conduct a study that plans for how the state will reduce natural gas generation and accelerate the eventual retirement of gas plants, placing a priority on reducing natural gas generation in communities most impacted by air pollution.

Steps California can take today to reduce reliance on natural gas generation

• Shift more evening electricity demand to daytime hours and target energy efficiency to lower evening demand.
• Invest in more energy storage that saves excess solar generation for use after sundown.
• Invest in a more diverse portfolio of renewable generation technologies to spread clean energy generation evenly throughout all hours of the day to reduce evening ramp needs and the need to cycle in-state gas plants.
• Allow California’s grid operators greater access to clean energy generation resources outside the state to help further reduce the need to cycle in-state gas plants.
• Target specific locations for clean energy investment so that new generation resources can meet local capacity needs, which can hasten the retirement of natural gas.

If we’re truly committed to reducing carbon emissions, cutting air pollution and avoiding the worst impacts of climate change, then we must move away from natural gas in a way that both makes sense for the communities most affected and keeps everyone’s lights on. All eyes are on California to show the world how to wean millions of people and an enormous economy off fossil fuels. It’s imperative we get this right.