With nearly 60% of the state’s electricity generated from solar, wind, and geothermal energy, California is well past the halfway mark to its goal of 100% renewable power generation by 2045. But this comes with major challenges, both financial and environmental. Mainly, generating adequate electricity during the hours when the sun is not shining is becoming more expensive, polluting, and inefficient, ultimately putting economic stability and business growth at risk.
COMMENTARY
Even with President Trump’s declaration of an energy emergency that would boost fossil fuel production for electricity, bringing that additional power online will take time and cost money. And even if domestic fossil fuel-based energy becomes more abundant, in many cases solar energy generation will remain cheaper—at least during daylight hours. This means that millions will continue to face high power bills—especially those that need electricity in the late afternoons and evenings—and overtaxed grids.
Simply cutting power use during these late afternoon and evening hours is often not easy, as buildings still need to run climate control systems and allow the charging of a growing number of electric vehicles (EVs). Without solar generation at this time, most utilities must rely on peaker plants—power plants burning coal or natural gas that come online as the sun sets to make up for the lack of solar power that was feeding the grid during the day. These plants are more costly to run than solar-powered plants; they are also more polluting.
The answer to this situation is not just more grid-level renewable energy or chemical batteries, as lobbyists and legislators often state—or even more coal or natural gas for peaker plants. This will not solve the entire problem. In fact, such an approach requires heavy investments into the grid, which then raises utility rates for decades. There is also already a long backlog in connecting new infrastructure to the power grid, making the day with adequate renewable power production and storage a long way off.
Instead, regulators and policymakers should encourage on-site storage solutions that customers, especially commercial buildings and facilities, can install now on their own. Known as “behind the meter” distributed energy resources, these storage mechanisms are charged when clean grid electricity is cheap and plentiful, then discharged when the sun is not shining, thereby replacing expensive and dirty utility electricity during those hours. This is an immediate, accessible and effective cure for overburdened grids, and the only way to take full advantage of current renewable energy capabilities.
Meanwhile, behind-the-meter storage solutions do not require any connection with the grid, making them more immediately available and economical. Such solutions, often based on thermal storage—-with power generated during the day stored locally in bricks, molten salts, or even ice—could help break this price/shortage pattern. This is especially true if such solutions were adopted by office buildings, hotels, hospitals, malls, government and institutional buildings, and other large consumers of electricity.
Data shows that in the U.S., commercial buildings are responsible for 75% of electricity use and 35% of all carbon emissions. With nearly half of buildings’ electricity used for heating and cooling, implementing a thermal storage solution just for heating and cooling, especially air conditioning, could significantly bring down power bills for buildings. Buildings can charge these systems from their regular utility-provided electricity during the hours when the power is cheaper, mainly daylight hours when solar energy is plentiful (or generated on-site) and can adequately power utilities, then release this during the more expensive hours, including those after the sun sets. Electricity during daylight hours when the systems are charged is also cleaner, helping buildings and businesses cut their carbon footprint, meet growing environmental, social, and governance (ESG) requirements, and strengthen their commitment to sustainability.
Thermal behind-the-meter storage is also a more viable option than batteries, especially for large buildings. When it comes to commercial buildings, batteries are costly in terms of insurance, have limited cycles, and can be dangerous—the bigger the battery, the greater the risks. Along with that, installation of these batteries has become increasingly problematic due to new state regulations regarding who is qualified to do these installations.
Behind-the-meter (BTM) thermal storage systems can easily be added to most buildings, and are available on a turnkey and remote-management basis, such as via virtual power plants. These solutions can enable building owners and managers to net significant savings on their power expenditures with little extra effort on their part. This is especially true as California’s peak power costs are expected to rise some 50% through 2044, while off-peak prices are set to fall by that same percentage. And as more buildings join this effort, carbon emissions and the risk of blackouts will go down for everyone. Reducing the risk of blackouts is a key economic issue; businesses and consumers need a resilient grid to grow and thrive, especially as electrification efforts increase, including EV use and the replacement of natural gas and other fossil fuels in homes across the state.
This really should be a priority issue for regulators, who should be encouraging utilities to deploy these behind-the-meter solutions via dedicated programs that leverage these assets’ capabilities to participate in grid balancing on a daily basis. These types of “shift” programs would be able to encourage the quick build of storage capacity BTM without waiting for interconnection. And indeed, there is growing interest among regulators for incentivization of these programs.
Commercial building and property owners should embrace these systems, as they are the best way available now for California’s buildings to cut their power costs and better meet ESG requirements. It is time to stop waiting and take action. Rather than straining the power supply, commercial buildings can help bring immediate relief to the electrical grid and to their own electricity bills.
—Doug Poffinbarger is director of Commercial Operations, U.S. West, at Nostromo Energy.
