CA Grid Change Coming?
Warren Buffett is a shrewd investor unafraid to tackle some of the largest corporations to improve stakeholder value. Still, one of his latest drives has the potential to help millions of energy consumers too.
To understand what is going on, we have to go back in time to the end of 1999 when, soon after the champagne corks had stopped popping for the millennium, things weren’t going so well for the CA grid and power security. Back then, Enron was a powerhouse in the global energy sector and would stop at nothing in the pursuit of money. By exploiting the rules designed to open the CA market for competition, the now long departed Enron manipulated the market by shutting down gas pipelines and taking generation capacity offline to spike prices.
This manipulation forced utilities (who had their retail prices capped) to buy power from a market at 800% its standard value and sell at a loss, a market that Enron was a big seller in. After several months, this activity cost utilities and energy consumers around $45bn, the solvency of Pacific Gas & Electric (PG&E), near bankruptcy of Southern California Edison, and created rolling blackouts. Today, CA utilities are understandably cautious about opening up their regional grids again. However, this inflexibility establishes an inability to trade excess supplies quickly across their normal boundaries.
This is a problem for renewable power projects, which in some areas are having to turn off clean green generation because there isn’t enough demand in the grid for it, even though there is demand in the next utility area.
Warren Buffett’s Berkshire Hathaway Inc. owns both NV Energy and PacifiCorp, utilities that are determined to change that. Last year Berkshire Hathaway turned on two of the largest utility-scale solar schemes in CA and was determined to encourage the cross border trade of surplus power. In 2014, the CA Grid and PacifiCorp started a market allowing power to be dispatched every 15 minutes, and NV Energy joined that last year. Others are being encouraged to join, and if State renewable targets have any hope of being met, this has to happen.
A climate in which good green power is being turned off will not encourage renewable developers who, in turn, will struggle to secure investment.
The team at Vervantis are experts in distributed generation and know the value in detailed viability studies. Energy consumers need to understand from an independent source the project economics, financing options, incentives, vendor credibility, grid connections, and the best fit in terms of size or whether battery storage should be considered. All of our advice is based on the best outcome for our client. We are not affiliated with any vendors or equipment manufacturers, which means we are free to find the best fit every time.
If you are looking for the best way to plan your renewable strategy, Vervantis has the tools to help you navigate the distributed generation and energy storage landscape. To learn more, you can connect with us here or call one of our experts now: 1-888-988-5474