In California generally and for Edison International's Southern California Edison Co. (SCE) utility particularly, the future role of natural gas in power generation is dwindling in response to a long-standing state water ban causing the closing or repowering of coastal gas-fired plants and more recently from the state's aggressive climate change policies. Reliability needs, however, will keep some gas-fired generation in the mix for some time.
With plans to greatly reduce the state's carbon footprint, California will not be replacing its coastal gas-fired "once-through-cooling" (OTC) electric generation units with much, if any, gas-fired generation. SCE reflected that last month when it told state regulators that in the future it will be depending more on storage programs rather than acquiring more gas-fired electricity.
A few years ago, the California Public Utilities Commission (CPUC) approved up to 1,000 MW of gas-fired generation to help replace some of the 5,200 MW of OTC-related coastal plants, starting in 2018, but then the San Onofre Nuclear Generating Station (SONGS) was closed and the CPUC reopened the electric utility long-term procurement plan (LTPP) process. For that procurement SCE was limited to "preferred resources," or non-fossil fuel sources -- energy efficiency, demand response, renewables, and storage.
SCE's Mark Nelson, director of integrated planning, told NGI that the idea that the Edison International utility is abandoning gas-fired generation is overstated. "We went out with one big procurement [that included some gas-fired resources], but when you hear the story it sounds like it was predominantly 'preferred resources' or 'all sources,’" Nelson said (see Daily GPI, March 14, 2014). "It's a complicated story [since the SONGS closure]."
A number of environmental and other organizations during the discussions on how to replace the 2,200 MW of nuclear power supply advocated only the non-fossil fuel resources, Nelson concedes. For example, last month Earthjustice filed an appeal challenging the CPUC's approval of a key agreement to repower an existing natural gas-fired generation plant site in Carlsbad, CA, calling it a "carbon-polluting power grab (see Daily GPI, Dec. 10, 2015)."
"This is why there is a two-year cycle to the LTPP," said Nelson, formerly SCE director of generation planning/strategy and prior to that with MidAmerican Energy units. "It allows all the stakeholders to get together and look at what the system needs are on an updated basis because it may be that storage or gas-fired resources are needed to balance the system, but we do that analysis on an ongoing basis."
Under the new state push for using 50% renewables by 2030 (SB 350), Nelson said the state lawmakers put in provisions for use of integrated resources planning (IRP), and it may replace the current long-term procurement process and leave the door open for some new gas-fired generation.
"The IRP is thought to be a broader process that definitely will include carbon," he said. "And by including carbon, I think we will be able to have a better discussion of the future of gas-fired units."
Nelson said SCE is "very cognizant" of the use of fossil fuels relative to the state's climate change goals, so "we certainly recognize that fossil fuels need to be phased out to make those goals, but the planning process has a lot more moving parts than just fossil fuels; it has reliability concerns as well."
He clarified that the latest plans do not emphasize only storage and renewables for additional power supplies, but those preferred sources are considered "wherever possible," especially in the all-source analyses for future power sources. Recent technology and economic advances for both storage and renewables make them more viable, Nelson said, adding that California continues to be ahead of other states in requiring storage and renewables.
Ultimately, the California goals, including 80% reduction of carbon emissions by 2050, will require a decarbonized power grid, including a lot more distributed generation, Nelson said.