Provide your organization’s comments on the 20-Year Transmission Outlook topic, as described in slides 4-13:
Golden State Clean Energy (GSCE) appreciates CAISO undertaking this effort. We are very supportive of CAISO creating a transmission planning process with a longer outlook than the current 10-year outlook of the TPP. California absolutely needs new transmission studies to complement the SB 100 report and facilitate its long-term carbon reduction goals. In addition, CAISO should use this novel outlook to push forward a vision for the grid of the future, thereby ensuring transmission planning is not just reacting to external planning processes and resource portfolios dominated by a limited set of current technologies. California should understand the ramifications of planning a system dominated by 4-hour batteries, the risk this may create for persistent reliance on natural gas generation, and what generation and transmission alternatives can be paired to provide a different path forward that better meets the state’s carbon reduction goals.
Our comment focuses on two main points: (1) ensuring this effort can be translated into more immediate action and that this effort is actionable; and (2) scoping the outlook to consider scenarios beyond the SB 100 report’s primary cases.
I. Ensuring the outlook is actionable and able to produce meaningful results
GSCE appreciates the limits CAISO notes regarding the purpose of this 20-year outlook – that it is not called for by the tariff but is intended to provide higher-level technical studies to test the feasibility of alternatives, rather than the detailed level of comprehensive analysis that underpins the 10-year transmission plan.
However, one goal of this exercise is to inform existing planning processes that do drive results such resource development, procurement, and new transmission. Thus, the 20-year outlook must produce meaningful results that not only inform existing planning processes but also facilitate action.
The IRP and the SB 100 report are two clear areas that can benefit from additional transmission studies. The outlook also needs to inform CAISO’s TPP and produce results that TPP can use. CAISO should consider whether revisions to its tariff-based transmission planning process are needed to incorporate the results from the 20-year outlook process. We cannot ignore least-regrets in-state transmission that can be developed now and push California forward with the infrastructure needed to achieve climate goals.
Ensuring the 20-year outlook’s results are in a form that TPP can act on will help CAISO avoid its stated intent of not conducting an academic exercise. There has been talk of the 20-year outlook creating a window into the future so we can see how the TPP’s 10-year results compare. TPP needs to be able to incorporate information that can better inform the annual plan and projects approved for construction. For example, if TPP shows a major transmission line is needed, but the 20-year finds a need for a second line (or a larger line), CAISO should assess whether there are benefits to building that second line sooner or as an upsized version of the line identified by the transmission plan. It will make the 20-year outlook actionable and meaningful for TPP purposes if CAISO considers this interface with the 20-year outlook now and revises its tariff process to accommodate the input.
CAISO could consider a process whereby the 20-year outlook has the ability to promote transmission projects to be studied in the tariff-based TPP, providing those projects with a realistic path forward in the TPP. Thus, CAISO would have its 20-year outlook process that studies several projects to meet various longer-term policy needs, and the outlook can then promote some of these projects to the TPP for the more rigorous studies needed to support their construction.
If the 20-year outlook is to promote projects to be studied and considered for construction in the TPP, it seems the TPP needs an additional method for approving such projects beyond reliability, economic, or policy needs. These three existing avenues for construction and the TPP’s 10-year outlook may not capture the value created by longer-term planning. For instance, a 20-year outlook transmission project would likely appear premature in the economic assessment, as the financial benefits that can be realized in a 20-year timeframe may not sufficiently materialize in a 10-year timeframe to justify the project based on the current economic assessment’s standards.
Considering that new criteria appears needed to recognize the advantage of building sooner and not wait for TPP’s existing pathways to select the project, potential TPP criteria for promoted 20-year projects includes ensuring the following:
- the project does not create reliability issues if brought online in this earlier timeframe;
- the project does not create negative economic impacts in the immediacy;
- the project provides an acceptable amount of certainty it will not result in stranded costs; and
- the project provides some quantifiable benefits or improved efficiencies if constructed in the earlier timeframe (i.e., permitting and construction efficiencies, cost reductions from those efficiencies, directly driving a reduction in use or early retirement of natural gas resources).
A policy-driven criterion is likely not needed because a 20-year project should be inherently policy-justified. Considering the risk of stranded costs more accurately assesses uncertainties around competing paths forward for meeting our policy goals.
II. Framing the outlook beyond the SB 100 Core and Study cases
GSCE supports CAISO’s plan for the SB 100 report’s Base and Study cases to be the starting point for the 20-year outlook. There is a natural fit here, as the SB 100 report needs to be informed by transmission studies. We also suggest that CAISO run an updated 20-year outlook following each future SB 100 report to ensure updated resource assumptions are tested and the grid is planned around emerging technologies.
We also support CAISO conducting additional studies to more fully examine the transmission implications of scenarios besides the SB 100 report Base and Study cases. It is important for CAISO to preserve and protect its independence as the transmission planner for its grid and its ability to critically examine the assumptions that are the inputs to the planning process and modify them using its independent judgment if needed. Through its tariff, CAISO has the ultimate responsibility over resource assumptions that are assessed for transmission solutions related to policy projects. Study cases should be altered or additional scenarios created to ensure California is prepared for realistic future scenarios and that both our transmission system and resource portfolios work to produce a reliable plan for the future.
High storage penetration, high grid charging need scenario
GSCE believes CAISO should study a high storage penetration, high grid charging need case that helps illuminate deliverability needs for solar resources and helps plan for avoiding excessive curtailment. We are concerned about ever-rising solar curtailment and believe curtailment should be an important issue in the 20-year outlook, considering the amount of solar predicted to be online by then and considering solar’s role on the grid will evolve. Battery storage already appears in large amounts throughout the SB 100 report portfolios, but sensitivities involving green hydrogen should also be considered in this proposed study scenario as a means of storing midday solar. The SB 100 report’s primary cases and hydrogen sensitivities should be assessed under a scenario where they are reliant on a substantial amount of midday grid energy to properly test future grid conditions.
In the future, California expects to have a significant amount of storage on the grid with increased amounts of lithium-ion batteries, long-duration storage, and green hydrogen facilities. While current concerns about curtailment may be mitigated by co-locating batteries with solar, as the ITC falls off or if a stand-alone storage ITC materializes, a major incentive to co-locate may disappear. There are also advantages to stand-alone storage, and some newer storage technologies may not be as feasible to co-locate with sufficient on-site generation. Thus, it does not appear to be a safe assumption that storage will largely have access to on-site generation, or that storage will be the solution to mitigate excess curtailment for nearby solar. We need to be prepared for a scenario where a significant amount of storage or green hydrolysis is heavily reliant on energy from the grid.
This scenario is important for two reasons, one being policy-driven and the other being reliability-driven. Regarding California’s policy needs, storage is not a renewable resource or even inherently carbon-free, it merely stores energy produced by other resources. The storage we see in the SB 100 report needs clean energy resources backing it, likely to be mostly reliant on inexpensive, midday solar generation. Thus, if California is grid charging its storage fleet to a significant degree, storage will only further the pursuit of state policy goals and allow California to wean off thermal resources if the solar fleet is deliverable midday. We must ensure our storage fleet is not reliant on or prolonging the use of natural gas resources.
The argument for this scenario being important to our reliability needs is similar to the policy-pursuit argument. Storage resources are turning out to be, and likely will remain, critical resources for California’s RA program as well as provide other products needed to keep our grid reliable. To the extent California is looking to storage to provide reliability services, it needs access to energy from generation sources as an extension of RA and reliability needs. This reliability assessment should also be stress-tested with more aggressive natural gas retirement assumptions to align policy with reliability.
Now that we can see why midday solar deliverability is important if storage or green hydrogen facilities rely on grid energy to a significant degree, we can consider what the 20-year outlook needs to do to study that scenario. This comes back to the concern about rising levels of curtailment. The scenario should examine and stress-test deliverability studies that are to occur in the 20-year outlook for a number of the study cases (i.e., Base, hydrogen sensitivities), and CAISO should consider a new deliverability assessment that could properly assess the deliverability of solar for the purposes of charging stand-alone storage and facilitating green hydrogen production.
This assessment of solar’s ability to support grid-charging should also evaluate the meaning of excessive curtailment. One approach could be a cost analysis that compares what degree our solar fleet needs to overbuild to create sufficient generation redundancies in a high variable energy resource grid versus transmission that can reduce curtailment and make more use of solar resources. Overall, CAISO needs to take a look at curtailment; what would be deemed excessive curtailment; and ensure that the enormous solar fleet that is coming can be utilized by retail users chasing time-of-use rates, storage resources that are enabling state policy and ensuring reliability, and a host of areas that are newly electrifying that may shift our peak usage in unpredictable ways.
Central Valley build-out scenario
GSCE also believes there should be a scenario where a larger portion of future resources, especially solar, are developed in the Central Valley. In-state resources will be increasingly important for California as baseload capacity throughout the West retires, congestion and flow issues increase, and regional competition becomes more apparent. Within California, the Central Valley has historically been left behind in broader developmental efforts. In this instance of an evolving energy sector, development in the Central Valley carries environmental justice principles by focusing investments and decarbonization in an area that has a long history of environmental injustice.
The Central Valley offers a win-win for large scale development of renewable generation along with the necessary in-state transmission expansion that is needed to meet California’s SB 100 goals that is “smart from the start”. The valley has ample land that is already environmentally impaired, transmission corridors that can be expanded for increased access to in-state renewables, and the ability to displace fossil generation and reduce air pollution in many disadvantaged communities. There are also overlapping policy goals with the Sustainable Groundwater Management Act given the significant acreage of agricultural lands to be retired. And the increasing pressure to reduce development on public lands to protect fragile desert ecosystems also provides support for locating more solar resources in the Central Valley and planning transmission to deliver this solar.
Lastly, more transmission through the Central Valley could help California’s wheel-through issues by increasing north-south flows, which in turn could improve the economics of in-state transmission development. Increasing in-state transmission capacity could provide numerous benefits to southern California load and the desert Southwest. The wheel-through issues before CAISO in the 2021 summer reliability initiative are not going away, and entities seeking Northwest hydro will only increase as supply in the West becomes tighter and other states also increase their decarbonization efforts.
 Cal. ISO, 20 Year Transmission Outlook Kick-off Meeting – Agenda, at 12, May 14, 2021, available at: http://www.caiso.com/InitiativeDocuments/Presentation-20YearTransmissionOutlook-May14-2021.pdf.
 See Tariff §126.96.36.199 (“The CAISO will create a baseline scenario reflecting the assumptions about resource locations that are most likely to occur and one or more reasonable stress scenarios that will be compared to the baseline scenario. Any transmission solutions that are in the baseline scenario and at least a significant percentage of the stress scenarios may be Category 1 transmission solutions.”).
 See Will Gorman, et. al., Are coupled renewable-battery power plants more valuable than independently sited installations?, May 2021, available at: https://emp.lbl.gov/publications/are-coupled-renewable-battery-power.
 See Cal. ISO, 20 Year Transmission Outlook Kick-off Meeting – Agenda, at 10, May 14, 2021 (This initiative will consider “[b]roader ranges of resource transitions including potentially more aggressive gas-fired generation fleet retirement”).