Improving on 100% Renewable Portfolio Standards through Hourly Matching, with Jan Pepper of Peninsula Clean Energy

Peninsula Clean EnergyPeninsula Clean Energy is a community choice aggregation (CCA) founded in 2016 that serves about 310,000 customers in San Mateo County and the City of Los Banos. Peninsula Clean Energy has focused on increasing renewables since beginning service, setting higher targets for renewable energy procurement than those mandated by California under the Renewable Portfolio Standard (RPS). By 2025, Peninsula Clean Energy  is aiming to achieve 99 percent renewable electricity on an hourly basis.Back up… What are community choice aggregators?Originally created to offer small residential electricity consumers a competitive alternative to large utilities during restructuring, CCAs’ presence on California’s grid has grown dramatically over the past decade and they now serve over 11 million Californians. Consumers served by CCAs continue to receive distribution and transmission services from the resident private utility - like PG&E - while the CCA chooses and purchases the electricity itself. Climate Break has covered CCAs before. For more on how these local entities are trying to decarbonize their energy supplies, see our story on Central Coast Community Energy.How is this different from what California’s requiring anyway?Under SB100, 50 percent of the electricity procured by load serving entities (LSEs) like Peninsula Clean Energy is supposed to be from resources that are eligible under California’s Renewable Portfolio Standard (RPS). That means at least half of LSEs’ electricity must be met by renewable resources like wind and solar, and less than half from resources like natural gas and large hydroelectric power. By 2045, SB100 requires that LSEs achieve all 100 percent carbon-free electricity sales. These targets are based on annual rather than real-time accounting.  For example, LSEs like Peninsula Clean Energy can achieve RPS benchmarks by meeting all of their customers’ electricity demand with solar for half of the day, but relying on non-renewable resources like natural gas to meet high demand during evening hours. Similarly, many electricity providers in California are now offering 100 percent renewable energy plans. Customers can choose to opt into these plans, typically in exchange for a higher rate. These energy plans are 100 percent renewable on an annual basis, but may not be 100 percent renewable on a monthly, daily, or hourly basis. During high demand periods with low renewable supply, like hot summer evenings, most 100 percent renewable energy plans are still benefiting from non-renewable energy, but they make up for it by contributing extra renewable energy to the grid during other times. Peninsula Clean Energy’s goal—getting to all renewable energy on hourly basis—is much harder than getting to 100 percent renewable energy on an annual basis because their renewable supply will need to line up in real time with customers’ demand.Advantages of Hourly MatchingBy itself, annual matching requirements probably won’t be enough to decarbonize the grid. Hourly matching sends a stronger signal to invest in resources like long duration energy storage and geothermal, which can be available during hours when solar isn’t. By reducing demand for carbon-polluting resources like natural gas for all hours of the day, hourly matching can also help to reduce emissions by more than annual matching would.Okay, but what are the drawbacks?Switching from annual to hourly matching increases procurement costs. By how much depends on context, like the kinds of generating resources already available and when during the day ratepayers demand electricity. In their modeling, Peninsula Clean Energy found that costs increased exponentially as they approached 100 percent renewable procurement on an hourly level. While they believe they can meet all of their demand with renewables 99 percent of the time, meeting demand during that last one percent of the time became cost prohibitive. Hourly matching may require more information than is currently accessible. Currently, LSEs use renewable energy credits (RECs) to show their compliance with California’s RPS standards. RECs may either be bundled -- sold still attached to the wholesale electricity itself -- or unbundled. Unbundled RECs are purchased separately from the renewable electricity they came from, and the amount of unbundled RECs that LSEs are allowed to use to meet RPS requirements is declining over time. According to the EPA, most RECs aren’t tracked with enough detail to work in an hourly-matching system. In the long term, decarbonizing the grid will require hourly matching, but achieving it may still be infeasible for many individual electricity providers while keeping rates reasonable and reliability high.Peninsula Clean Energy’s plan for getting to 24/7 renewablePeninsula Clean Energy created an open source modeling tool they’re calling MATCH, which they’ve used to develop their strategy for hourly matching. MATCH chooses resources to minimize costs while maximizing renewable supply on an hourly basis. Peninsula Clean Energy is hopeful that by using this tool they’ll be able to match renewable supply to demand the vast majority of the time and reduce emissions grid wide while keeping ratepayers’ costs about the same. The MATCH model is publicly available and can be used by other entities interested in hourly matching.Peninsula Clean Energy’s CEO Jan Pepper told Climate Break that they’re procuring a variety of resources in order to meet their 2025 goal; with a big focus on battery storage options, wind, and geothermal. To ensure reliability, the CCA plans to procure more electricity capacity than they need, then sell excess generation back into California’s wholesale electricity markets. Pepper also said that Peninsula Clean Energy was looking forward to technologies that aren’t available yet but will be eventually, like offshore wind.About the guestJan Pepper serves as Peninsula Clean Energy’s CEO. Pepper came to Peninsula Clean Energy after a long career in clean energy startups. Previously, she served in local Bay Area government, including as Los Altos’s mayor.Further ReadingLearn more about PCE's strategyPCE’s MATCH model on GithubFactsheet: CA’s RPS StandardEPA: Hourly matchingClimate Break: Community Choice Aggregation For a transcript, please visit https://climatebreak.org/improving-on-100-renewable-portfolio-standards-through-hourly-matching-with-jan-pepper-of-peninsula-clean-energy/