We talked about the duck curve and how the success of solar PV in essence in US State of California has lead to challenges in essentially system operation. Another challenge related to the SCS Renewables is that the output of a renewable energy power plant, whether it's wind and solar PV, varies with the wind and the sun. Here's some characteristic data. This shows the output of a wind turbine in China over the course of a day. Then that output of that same turbine on the following day. Just notice that varies quite a bit, and that's not a surprise. The wind comes and the wind goes. In some ways, it overstates the problem a bit in that this shows the output of a single turbine. But if you have a wind farm of say, 20, 30, 50 turbines, the combined output, doesn't show that much variation because of the wind is a little higher here, probably a little lower there, and if you add all that up, it's not as bad. But there's still a challenge here. In that, the output of wind and solar PV plants varies with the wind and the sun. To summarize, the grid integration challenge, demand for electricity has always been variable. That always goes up and down and electricity system operators have been managing that problem well for over 100 years. But now, things are changing. Same as supply of electricity, wind and solar PV is also variable. The grid integration challenge is, how do we maintain system reliability and power quality as we get more wind and solar PV on the system? This response to the challenges is evolving. We're learning day-by-day how to make this work. Thinking about this is that the power system needs to have more flexibility, more resources. Could be power plants, could be demand response, could be all things that can accommodate wind and solar PV as they move up and down. Here's one graphic that summarizes this. You can have flexibility on the supply side. You can have flexibility in the demand side, you can have storage, which we'll talk about in just a moment. There's different ways of managing this challenge. To make this a little more tangible. What's California doing about this? Because in the US, California is the leading state in terms of solar PV. We can look to California on their experience and take lessons learned from what they're doing. This summarizes the California story. Almost 20 percent of the generation mix was from wind and solar in 2017. It's now up since then, a lot of that solar is rooftop, not just utility-scale. What are the challenges? Oversupply of renewables. During the middle of the day, there's a lot of solar system and that can be a challenge if the system wasn't designed for that much solar. Similarly, steep morning and particularly evening ramps, as we talked about, the sunsets, we'll call it 6 PM 1800 in the fall, and everybody is getting home and turning everything on. Solar is going down, demand is going up, that's a problem. What is California doing about this? Lots of steps they're taking. These is some of the key steps they're taking from a study done in 2019. Market design. Essentially, there's a market has been created for what's called a Flexible Ramping Product. If you have a power plant, you can essentially bid in to the ISO and say, hey, I'm available in late afternoon and I can come on board very quickly. There's now a market for that product. There's something called an EIM, Energy Imbalance Market. California has essentially improved their connection with neighboring states. When California has too much they can export it to their immediate state to the East, which is Nevada. When California needs some electricity, say it's 6 PM, they can import hydro from state to the North. Essentially you can think of this as larger regional cooperation for electricity. The third step California is taking is Storage. They have policies and programs at the state level that essentially encourage, in some cases even require that Storage be installed in the electricity system. What is Storage and how does that address this problem? Let me give you an example going back to the duck curve. Imagine the duck curve looks like this, the thick red line. But now we put some Storage, we'll talk about batteries in one way to think about it. What those batteries do is they get charged up. They take some of that solar, there's a lot of solar mid-afternoon, the sun's shining. There's maybe even too much in some ways, you use that solar to charge up a battery. Then when you need lot of electricity, just a few hours later, you discharge the batteries and take from the batteries. You've shifted the net demand curve in effect from this red line to this blue line. Notice how it's much less steep and much less harder to meet. In this example, the peak load came down 14 percent. We didn't install new power plants. We didn't make major changes. All we did in this case, all what was done in this model was to install some batteries. That gives you some insight into what batteries can do on system. We'll stop here and then come back to get a little more detail on how Storage works.
