Solving California's Problem of Excess Energy

by Anna Gretz
March 25, 2017

There's plenty of energy to go around.

In fact, in California this spring, renewables will be flooding the electricity grid with energy in the middle of the day, when no one can even use it. This is a good problem. But it still needs a solution. Battery storage could be the solution California’s overloaded grid is looking for.

The energy-rich conditions in California this spring have set up the perfect storm: solar installations are up, and heavy rains have filled up all of California’s reservoirs (you may have heard that some are so full, they’re spilling over. Guess what happens when they do? They’re generating electricity.) California has more energy flowing into the grid than they have had in years, and CAISO, the California Independent System Operator that has to handle this energy flow, is talking about huge curtailments, or a cut-off of excess energy production.

We haven’t had this potential amount of excess supply on the grid before.

CAISO CEO Steven Greenlee

Solar is presenting the same need for an epic balancing act. Last year, we wrote about the “duck curve,” or a dip in electricity demand during the day when solar numbers are at their highest, followed by a huge demand for power later in the day, just as solar generation is dropping off. This pattern of supply and demand is really tricky for CAISO to handle, which is why it’s talking about major curtailment. But requiring generators to actually quit producing a commodity as valuable as energy? It seems like there must be another way.

Unless we take actions to mitigate excess supply, the times we’ll have to manually intervene in the market will increase. We’ve got to keep pressing on and implementing new solutions.


SOLUTION: Time-Of-Use Pricing

Our last blog post mentioned how awesome TOU pricing can be for power customers, specifically those with home batteries. Since California is facing some serious energy supply and demand imbalances, they could turn to time-of-use pricing in an unprecedented way, offering crazy-low prices for energy during periods of oversupply. This would be a huge opportunity for home battery owners (or soon to be home battery owners), as they could take advantage of this super-cheap energy, and use it whenever they wanted. California already wants to shift all of their big utilities to time-of-use rates by 2020, and CAISO is in talks with the utilities commission to offer huge incentives to use energy… or store it… in the middle of the day. These incentives could mean unprecedentedly low prices.

If we have to start turning renewable down or off, it undermines the effort to reach the goal that the renewable portfolio standard sets.


SOLUTION: Distributed Energy Storage

It’s going to be an interesting year for energy storage for many reasons. We’ve been covering the first one; California’s got a lot of energy, and they need to either cut generation, or store it somewhere… and the latter seems much more responsible, desirable, and profitable, not to mention in line with the state’s renewable energy goals. Another factor stems from a slower-growing electric vehicle market. Big battery producers like Tesla have been ramping up battery production in anticipation of a soaring electric vehicle market (think: the Gigafactory.) Although growth is happening, it’s not quite as fast as Tesla, or other companies, would have predicted. This may result in a glut in battery supply… which could be great for your average homeowner.

Here’s why: The other major area of battery production, especially for Tesla, is in energy storage, both on a grid-scale and on a more distributed, residential level. More supply could mean a drop in prices for consumers, making home batteries an even more economically viable option than they have been in the past, especially considering the potential savings of time-of-use arbitrage. This could be the biggest year for residential energy storage yet.

Together, these two solutions to California’s problem of excess energy could create an amazing opportunity for homeowners looking into residential home batteries, especially because shaving money off of electricity bills isn’t even the only reason why home batteries are a smart investment. Battery owners also get to enjoy blackout protection, and get to future-proof their home from rising energy costs.

Households equipped with solar panels and energy storage in the form of home batteries are protected from any utility company mishap, whether it be on a large or small scale. Home batteries allow households to power their own essential appliances like refrigerators, water pumps, and heating/cooling devices with stored electricity collected from their rooftop solar panels. The grid may be vulnerable, but individual households don’t have to be.

For even more freedom from the antiquated energy grid, home battery owners can complete the circle of energy independence with rooftop solar. Sure, storing power from the electrical grid can be cheap if you take advantage of time-of-use pricing, but the energy from the sun is completely free. It’s also totally clean, and incredibly reliable. Solar-plus-storage owners pretty much have it made, with their own energy fortress right on their own property. If you’re into owning your own free, clean, energy source, along with a way to store it so you get to use it for your own home, solar plus energy storage could be exactly what you’ve been looking for.

California is headed into a brave, new future of energy generation, usage, and storage. CAISO is going to do its best to strike a balance between supply and demand to protect the electrical grid, as well as California’s energy economy, from collapse. You can keep tracking with California’s progress, or you can take things into your own hands, making sure you get the most out of this time of energy excess, energy storage abundance, and time-of-use rates. The energy world is about to go through some huge changes, whether you’re ready for it or not.