California can’t give away electricity—at least while the sun is shining and the wind is blowing.
“California’s solar farms create so much power during daylight hours that they often drive real-time wholesale prices in the state to zero,” writes Cassandra Sweet in The Wall Street Journal. In fact, she reports, prices can go negative, with California suppliers paying out-of-state utilities to take excess energy.
“Meanwhile,” Sweet adds, “the need for electricity can spike after sunset, sometimes sending real-time prices as high as $1,000 a megawatt-hour.”
To better balance supply and demand, the state’s utilities are establishing battery-based virtual power plants. For example, Sweet reports, Tesla is supplying batteries to a network that will span more than 100 office buildings and industrial properties; the batteries will be able to supply 360 MWh of energy on short notice. Sweet quotes J.B. Straubel, Tesla’s chief technical officer, as explaining that the network “…will show how you can use communication and control technology to make a bunch of distributed energy assets act like one big one.”
Battery-based virtual plants remain an expensive alternative to virtual plants, at least for now. Sweet cites a December report from Lazard Ltd. putting the cost of energy from lithium ion batteries at $285 to $581 per megawatt-hour, vs. $155 to $227 per megawatt-hour from a gas peaker plant.
Then there is the problem of long-term storage. Sweet quotes Jeff Guldner, senior vice president of public policy at Arizona Public Service Co. in Phoenix, as saying, “Storage may help you within the day, but a battery isn’t designed to store energy from March until it’s needed in June.”
