Michigan could create 69,000 job-years on a path to 30% renewables by 2027

By Will Driscoll

Michigan could generate 69,000 new job-years by reaching 30 percent renewables by 2027, per a report funded by the Michigan Conservative Energy Forum.  The 30% scenario, one of three considered, “was chosen based on the current growth factor of renewables,” and compares to the state’s recent 10 percent renewable percentage.

The analysis calculated that adding 3.1 GW of solar capacity and 4.7 GW of wind capacity by 2027 would generate 5800 job-years per GW in the construction phase.  That includes direct job-years (1600 per GW), indirect job-years in supporting industries (2400 per GW), and induced job-years, as direct and indirect wage-earners spend their earnings (1800 per GW).

Over the lifetime of the solar and wind installations, the report also estimated 3000 job-years per GW in operations and maintenance.  That includes 1200 direct job-years per GW; 1100 indirect job-years per GW; and 700 induced job-years per GW.

The Michigan Conservative Energy Forum’s website says it favors an “all of the above” energy policy “that includes increasing our commitment to clean, renewable energy and energy efficiency.”

The analysis was conducted by the Hill Group, using the National Renewable Energy Laboratory’s Jobs and Economic Development Impact (JEDI) model, as well as MIG Inc.’s IMPLAN model.

 

Will Driscoll, MPA, JD, is an energy and environmental policy analyst who has worked primarily for the U.S. EPA via the contractor ICF Consulting. 

With more solar and wind, North America’s grid is getting more reliable

By Will Driscoll

The North American electric grid’s annual checkup shows that it is becoming increasingly reliable, as solar and wind gain share, according to the North American Electric Reliability Corporation (NERC).

For solar, one grid reliability factor—frequency response—is of great interest because of concern, as stated in the report, that “a changing resource mix and increase in renewable resources” may have a “potential impact on frequency response performance.” 

Frequency response has steadily improved since 2013, as shown in the last two columns of this table (i.e., one or both measures are improving in each interconnection):

The report notes that inverters from solar and wind farms now provide frequency support, alongside the frequency support that has traditionally been provided by synchronous inertia from fossil-fired generators.  (See, for example, a report on solar and frequency support, prepared by California’s grid operator, First Solar, and the National Renewable Energy Laboratories.) 

The 2017 solar eclipse was another bright spot for solar, as “no issues developed” from the transitory loss of mid-day solar power, because utilities had planned for the occurrence—just as they plan for cloudy days.

Beyond frequency response, the report covered all 13 of NERC’s grid reliability metrics. NERC found that all metrics were either improving, unchanged, or stable, with the exception that the Texas Interconnection is expected to have tight reserve margins this summer.  Even there, the report noted that “ERCOT [the Texas grid operator] has a variety of operational tools to help manage tight reserves and maintain system reliability.”

The report provided updates on two incidents related to California wildfires and solar PV inverters.  After the first incident, related to a 2016 wildfire, NERC advised utilities to contact a specific inverter manufacturer to implement a reliability solution specific to that manufacturer’s inverters.  NERC also formed a task force that will produce a guideline for “inverter-based resource performance” to support grid reliability.  After the second incident, related to a 2017 California wildfire, NERC issued a follow-up to the first alert. 

Beginning in 2021, NERC expects to collect data on solar generating units that are 20 MW and larger, as part of its Generation Availability Data System that now covers fossil units and is phasing in wind units.  Utilities use the data for benchmarking the performance of their own generating units.

NERC was certified by the U.S. Federal Energy Regulatory Commission as the nation’s electric reliability organization in 2006, pursuant to the Energy Policy Act of 2005.  Alaska, Hawaii, and Puerto Rico are not included in NERC, although an Alaskan organization has an affiliate membership.

A Fast Solar Ramp in Hawaii Can Save $3-7 Billion

By Will Driscoll

Hawaii can save $3 to $7 billion by accelerating its transition to solar, according to an independent utility modeling analysis.  That conclusion is validated by the experience of the Hawaiian island of Kauai, where a new solar-plus-storage park will bring down the island’s electricity rates. 

A new state law in Hawaii advances its commitment to pursuing renewables aggressively, so now it’s up to Hawaiian Electric to verify the massive $3-7 billion savings potential from an aggressive solar transition, and then pursue that path.

Savings of $3 to $7 billion

Hawaii’s legislature has set a goal of 100 percent renewables by 2045, and Hawaiian Electric Industries is pursuing a state-approved plan to meet that goal.

Yet a new study of Hawaii’s grid by the Rhodium Group found that moving faster on solar (with minimal growth in other renewables) would save Hawaii $3 to $7 billion between 2020 and 2045.

Whereas Hawaii on its current path would reach 40 percent renewables by 2030, the study found that the least-cost path would achieve 46 percent renewables just three years from now, by 2021, and then 58 to 84 percent renewables by 2030.

The range in savings, between $3 and $7 billion, reflects two bounding analyses: 1) moderate renewables costs combined with low oil prices (for $3 billion in savings); and 2) low renewables costs combined with high oil prices (for $7 billion in savings).  (Hawaii generates most of its electricity using imported oil.)

Beyond solar, the study found that Hawaii would need “up to two gigawatts of lithium-ion battery or functionally equivalent storage in 2030” to achieve the least-cost energy system. Kauai has shown the way here, as it is relying on battery storage provided by Tesla and the AES Corporation to store solar power for later release onto the grid.  (The study’s methodology is described in a technical note below.)

Kauai’s new solar-plus-storage park will bring down electricity rates

Kauai, where a member-owned co-op utility provides the power, shows how easy it is to adopt renewables quickly. Kauai has advanced from 8 percent renewables in 2011 to 44 percent now.

That’s well above the 27 percent for the rest of Hawaii, which is served by Hawaiian Electric.

Kauai aims to generate 50 percent of its electricity from renewables by 2023, and 70 percent by 2030. That 70 percent figure is the approximate midpoint of the 58 to 84 percent range found in the Rhodium study to be the least-cost range for Hawaii as a whole by 2030.

The cost of electricity from a new AES-built solar-plus-storage system on Kauai will be 11 cents per kilowatt-hour—significantly lower than the 14.5 cents per kWh for Tesla’s system just two years ago—and “will provide downward pressure on rates,” said the Kauai utility’s CEO David Bissell.

The Government of Hawaii wants affordable electricity and rapid integration of renewables

Hawaii’s governor recently signed a law providing that by 2020 the public utilities commission must set performance incentives and penalties to tie an electric utility’s revenues to its achievement on performance metrics—breaking the direct link between investment levels and allowed revenues. Two of the key performance measures align with the solar progress in Kauai and the results of the Rhodium Group study—namely, affordability of customer electric bills, and rapid integration of renewable energy.

Hawaii’s elected officials have been concerned about Hawaiian Electric at least since 2015, when 40 elected officials called for a study of publicly owned electric utilities, as on Kauai, for all of Hawaii.

The Rhodium Group study itself indicated interest across Hawaii in accelerating solar, as it gained the participation of Hawaiian stakeholders in 200 hours of focus groups and interviews, and was funded by a Hawaiian technology firm incubator, Elemental Excelerator.

It’s now up to Hawaiian Electric to verify the projected $3-7 billion savings, and pursue a fast solar ramp

The best course for Hawaiian Electric would be to run the Rhodium Group’s numbers through its own utility model to develop its own estimate of the cost savings possible from a fast renewables ramp. If Hawaiian Electric does not yet have a sophisticated utility planning model for this purpose, which includes, for example, battery storage as an option, the utility would be wise to first upgrade its planning model, and then re-run the Rhodium Group’s analysis. Or, if Hawaiian Electric’s most recent planning analysis, as reflected in its December 2017 Power Supply Improvement Plan, was limited by any artificial constraint on the amount of solar that it would allow, the utility would do well to re-run its analysis without any such constraint.

Assuming that Hawaiian Electric confirms the Rhodium study’s results—which Kauai’s experience already validates—then it should roll out an aggressive solar ramp. To its credit, Hawaiian Electric has been working with the National Renewable Energy Laboratory to understand how it can best modernize its island grids to incorporate low-cost solar. Hawaiian Electric could now quicken its pace to accelerate its renewables transition. Its customers would be happier paying less for electricity, and Hawaiian Electric could receive performance incentives, rather than pay penalties for failing to meet performance metrics, under Hawaii’s new state law.


Technical Note: 
The Rhodium Group study simulated Hawaii’s grid using a modified version of SWITCH, an “open source optimization modeling platform,” which contained detailed representations of the electric grid on Hawaii’s four most populous islands. For oil price scenarios, the study used the upper and lower bounds of electric power sector diesel and residual fuel oil prices in Hawaii between 2006 and 2017. For renewable price scenarios, the study started with renewable energy costs assumed by Hawaiian Electric in its December 2017 Power Supply Improvement Plan. Then, to account for future cost reductions for renewables due to technological improvements and economies of scale, the study “scaled those prices to projections from NREL’s mid-cost and low-cost scenarios.” The study’s authors then ran the modified version of the SWITCH model to find the least-cost energy system for 1) moderate renewables costs combined with low oil prices, and 2) low renewables costs combined with high oil prices.