The state's electric system is about to change. That was the message from Steve Berberich, president and chief executive officer of the California Independent System Operator, as he spoke to farmers and ranchers at the California Farm Bureau Federation Leaders Conference last week in Sacramento.
"The electric industry is going to change as much as the book industry. Remember Borders? Borders doesn't exist anymore. Why? Because Amazon ran them out of business," Berberich said. "Industry can change very fast and I'm telling you, it's coming to the electric industry."
As the nerve center for the power grid, ISO matches buyers and sellers of electricity, facilitating more than 28,000 market transactions every day to ensure enough power is on hand to meet demand. The job of the ISO, Berberich said, is to manage the flow of 50,000 megawatts of electricity across California's power grid. Because the ISO does not store power, it is generated as it is being used, which means the system must be balanced constantly. The organization is the only independent grid operator in the western U.S. and grants equal access to 26,000 circuit-miles of power lines.
Every five minutes, Berberich said, the ISO forecasts electrical demand, accounts for operating reserves and dispatches the lowest-cost power plant unit to meet demand, while ensuring enough transmission capacity is available to deliver the power. In describing the electric grid, Berberich explained that power resources connected to cities by large transmission lines is a system that has been in place for more than 100 years.
"This old model is changing, and changing very quickly," he said.
By 2020, California is expected to generate 33 percent of its power with renewable energy.
"As renewables grow, so do the system challenges," Berberich explained, adding that renewables are central to the electric sector's transformation.
Grid management must occur when the wind doesn't blow and sun is not shining; Berberich refers to the inconsistent generation from wind and solar as intermittent power.
"As a system becomes intermittent, it moves up and down and you have to fill in those peaks and valleys. Right now, we do it with gas plants, and we have to build more gas plants to help with those peaks and valleys," Berberich said. "What if we could change the other side of the equation and use demand to help manage it as well?"
With agriculture representing a large amount of energy demand, Berberich suggested that farmers and ranchers could participate in the ISO plan for managing electricity by using electrical water pumps at midday, when the most solar energy is produced.
"Your industry could get incentives on when to pump and not to pump, and on when to use equipment and when not to use equipment. You could be compensated for that and you could participate in our markets," Berberich said. "It doesn't have to be economically harmful. You can decide whether it is in your best interest to not run your pumps and get paid, or to run your pumps and run your business."
Producing too much electricity, called overgeneration, is just as much of a problem as producing too little electricity, he said; in either case, the system will collapse.
"We're going to have a new concept that you actually know what the system is doing, you run your pumps when it is most economic and it's most advantageous to you, and in the future I'm here to tell you that that will be in the middle of the day (during certain months of the year)," Berberich said. "We're going to engage you to be part of that so that you will get compensation for changing the way you use power. I think that's the most powerful tool we can use to help integrate these renewables without driving up the cost of the system."
Santa Barbara County rancher Fred Chamberlain asked about the cost of using power midday, when Pacific Gas and Electric Co. charges him the most money for power usage.
The discussion has commenced about appropriate ways to connect the wholesale generation market, which Berberich referenced, and translate that into workable solutions in the retail energy markets over which the California Public Utilities Commission has oversight, noted Karen Norene Mills, CFBF associate counsel and director of public utilities.
As the system evolves, Berberich said, there should be opportunities for coordination of the energy systems that takes into account on-the-farm realities.
"Join us in acknowledging that the power business is going to change and it's going to change dramatically," Berberich said. "Participate in those demand-response programs I've talked about."
(Christine Souza is an assistant editor of Ag Alert. She may be contacted at csouza@cfbf.com.)