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Solar Hits Above Its Weight in Powering U.S. Energy Transition


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California plans to launch an experiment to cover its aqueducts with solar panels
The campus for the University of California, Merced, features a canal system and a solar farm in Merced, California, U.S. August 17, 2022. REUTERS/Nathan Frandino

LITTLETON, Colorado, May 24 (Reuters) – Solar farms generated less than 6% of the electricity produced by utilities in the United States in 2023, but that annual share vastly understates the critical role that solar plays in enabling power firms to accelerate energy transition efforts.

On a day-to-day basis, solar plants can have such disruptive influence on system electricity flows that utilities have been forced to develop capabilities to rapidly curtail output from other sources and store surplus power for later use.

In turn, that resulting agility and emerging ingenuity throughout the energy sector is helping to accelerate global energy transition efforts by forcing power systems to more efficiently accommodate large swings in clean power output.

With supplies of all forms of renewable energy set to rapidly grow, utilities that learn to maximise the volume of solar power within generation systems today will be best placed to help drive the further evolution of energy systems in the decades ahead.

CLEANER, BUT MORE VOLATILE

No other clean power source comes close to creating both the opportunities and challenges that rapidly expanding supplies of solar power entail.

Solar is the fastest growing source of energy in the U.S. power system
Solar is the fastest growing source of energy in the U.S. power system

Solar’s overall share of U.S. power output may currently be small, but it is growing fast, with output expanding by 155% between 2018 and 2023, according to the U.S. Energy Information Administration (EIA.)

That growth rate compares with a 56% expansion in wind power and a 22.4% swell in natural gas-fired output over the same period.

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To accommodate growing renewables supplies and make good on commitments to reduce power sector emissions, U.S. utilities reduced coal-fired power generation by 41% from 2018 to 2023, which cut coal’s share of the power mix from around 30% to 16%.

But by replacing such a significant chunk of baseload power from coal with growing quantities of intermittent renewable power from solar farms, the U.S. power system has become more volatile as well as more clean over the past five years.

MAKE WAY!

California’s power system best exemplifies the volatility that comes from rapid increases in solar generation.

As the largest solar power producer in the U.S., California has boosted solar power output by 72% from 2018 to 2023, and relies on solar for around 28% of electricity supplies, according to energy think tank Ember.

U.S. solar powered electricity output surged by 155% from 2018 to 2023, and will scale new highs in 2024
U.S. solar powered electricity output surged by 155% from 2018 to 2023, and will scale new highs in 2024

The state also accounts for around 25% of national electricity supplies generated from solar.

But it’s an enduring challenge to turn the state’s abundant sunshine into useable electricity without distorting power markets.

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As more and more solar plants were connected to California’s grid over the past decade, power prices in the state came under increasing pressure during the middle of the day when solar output peaks.

A compounding problem is that the peak solar production period overlaps with what is traditionally the lowest period for system demand, so power firms have been forced to lower power prices in order to balance system needs until solar output declines later in the day.

The resulting ‘Duck Curve’ shape of power prices became a well known phenomenon over the last few years, with the unintended distortion to market dynamics caused by surplus solar power widely lampooned in 2023 by opponents of the energy transition.

California’s ‘Duck Curve’ electricity markets
California’s ‘Duck Curve’ electricity markets

The volume of California’s solar output has increased further so far in 2024, with solar electricity generation through May 23 running 27% ahead of the same period in 2023, according to LSEG data.

The uneven distribution of this output causes daily contortions to the state’s power generation mix, with solar power accounting for 0% of power generation before sunrise to over 70% during the sunniest times of day.

California’s power mix from May 8 through May 23, 2024
California’s power mix from May 8 through May 23, 2024

And California’s power prices continue to come under severe pressure during peak solar production hours, routinely turning negative for spells as the market pricing mechanism tries to lure demand and deter production from other sources.

California’s surge in solar output distorts system load and pushes prices lower
California’s surge in solar output distorts system load and pushes prices lower

BATTERY BUTTRESS

To alleviate the impact of the system imbalance caused by runaway solar output, California’s utilities have deployed networks of utility-scale batteries that can absorb surplus power during peak solar production periods, to be discharged when the sun goes down.

The battery network is still being built out, but already accounts for around 20% of California’s system needs during the peak demand period just after solar output stops and when people returning from work crank up household electricity demand.

California’s battery network kicks in when the sun goes down
California’s battery network kicks in when the sun goes down

The batteries also reduce the need for power imports by California during those peak demand periods, which reduces regional power strain and helps California become less reliant on neighbouring states for power supplies.

California’s battery system also acts as a learning tool for other power networks who are also struggling with the impact of too much solar supply, too soon.

And along with wider use of smart energy meters – which encourage consumers to increase power consumption when supplies are most abundant – all U.S. utilities are learning key ways to accommodate rapid growth in solar output and set themselves up for further energy transition progress.

The opinions expressed here are those of the author, a columnist for Reuters.

The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here.

Reporting by Gavin Maguire; Editing by Marguerita Choy

 



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