The Golden State is shooting for 50% clean energy by 2030, which Energy Commissioner Andrew McAllister says is well within reach.


California has never been shy. Children learn to accept its influence almost before they can walk, and the pipeline of high- and low-end culture that roars from it 24 hours a day drowns out all competitors. But if the Golden State is forthright, it is also smart. Where Los Angeles has Hollywood, San Francisco has Silicon Valley.

California has power. But as its economy grows, it is using less power.

Per-capita electricity demand in the state has been flat for about 40 years, says California Energy Commissioner Andrew McAllister, who visited Australia for the National Energy Efficiency Conference in Melbourne in November. On McAllister’s estimate, improvements in energy efficiency are responsible for between 30% and 50% of the overall flatness of the demand profile.

California is the sixth-largest economy in the world and home to nearly 40 million people. Over the past 40 years, energy efficiency has proven to be the best resource to improve the resilience of the state’s economy. “It’s a big wedge of our supply; of our resource mix,” McAllister says. “And we’re being asked by the legislature to double the flow of energy efficiency savings [by 2030].”

The target may sound ambitious for a populous state not renowned for its heavy industry, but McAllister isn’t worried. “We’re going to blast through 50% before then. There’s no doubt about that.”

The monster task of shifting to clean energy and using less electricity overall will involve the latest and greatest of today’s and tomorrow’s technology but also rely on seemingly mundane parts of the construction trade, such as building performance and mechanical systems. “The high performance of our buildings and lowering of demand itself makes all these other problems smaller,” McAllister says.

Fundamentally, energy efficiency is part of the building industry, he says. “It’s more contractor-based and local, and in that sense it has a kinship with renewables but it’s a little more traditional, disaggregated and diverse.”

Technology and efficiency, very complementary 

Followers of renewables are assailed with stories about software that will impose optimal distribution over complex networks but the less sexy area of simply using less energy struggles to be heard.

“There’s not always complete alignment between renewables – who want more equipment out there and to grow their industry – and the message about energy efficiency, which is, hey, everything in moderation,” McAllister says. After all, people don’t want energy. They only want the services energy provides. The game is to get those services at the least cost.

In California, about $US1.5 billion a year is spent on programs to promote energy efficiency, including rebates, incentives, technical assistance and work with local governments.

Demand response is playing a part in helping the state reach its energy goals but McAllister sees the market becoming more sophisticated as more participants are attracted to it – lighting can be tuned, buildings pre-cooled, thermostats tweaked, batteries charged or discharged. “There are many, many technologies that allow us to not just shed load but shift load,” he says. The slow but steady surge in electric vehicles will require some smart thinking. In times of excess power fleets should be charged, obviously, but when power levels are low EVs might also count as energy assets, sending electricity into the grid. Energy efficiency will create the headroom so new loads – EVs – can come in.

“You can really envisage a future where we’re setting it [energy supply and distribution] and forgetting it and it’s largely automated; where people make the choice once and that’s the plan,” he says. “They’re building the lungs of the system, where it’s providing an exchange of services; even peer-to-peer systems where you’ve got buildings that are transacting across a common grid.

“That’s a different business model for the utility but it doesn’t really require that much different infrastructure. The challenge is getting the regulator to keep up with all that.”

Calling heavy energy users

Australia would appear to have an advantage over California regarding demand response with its large-load energy users, including smelters, miners and steelworks. McAllister says light-to-medium manufacturing is coming back to California, regardless of the high costs. “Businesses still want to locate in California,” he says.

The flow of data from connected systems would allow for platforms where aggregated load can be displayed in all sorts of configurations, even down to isolating sites where specific contractors have installed HVAC units, for example, so that a business manager can research future system purchases. This sort of granularity is already happening in the advertising industry, but it’s new for the energy sector. “The monopoly utilities are not in 2017 on this. The idea is to get them into the 21st century.”

About 19% of energy in California goes to some aspect of the water system: heating it, pumping it, processing it. It makes you wonder why they built Los Angeles in a desert. “I don’t ask that question anymore; Los Angeles is a fact of life.”

As California moves to a renewables target of 50% by 2030 the expectation is for price volatility to pick up. The state is at about 30% renewables now and already there have been negative pricing events in the middle of sunny days during spring or autumn. Peak system load is about 60GW and utility-scale solar makes up 11-12GW. Excess renewable energy can be traded with neighbouring states such as Oregon or Nevada but a better solution, McAllister says, would be to find a good use for it. In Australia that could be running a desalination plant, producing hydrogen, pre-cooling buildings or pumped hydro. “You can do a lot of demand management with technologies large and small,” he says. “I’m really focused on enabling this future with buildings being the exchange platform.”

Power in the built environment

The energy system is more than big generators and poles and wires. Buildings are a resource and technologies that deliver and use energy efficiently can help keep the grid balanced. As large energy users such as real estate investment trusts and property conglomerates become skilled at managing their energy they will be attracted to markets where they may be incentivised to provide voltage support and frequency support, for example. As batteries become more common in buildings and businesses there will be more reason to participate in the energy market, including demand response.

“There are a lot of models to look at to see how we can really actively use the distributed resources we have at every moment to balance the grid. The technology to do that is already here today.”

In Southern California, for example, utility Edison is working in a residential development where demand management is operated in a system where five or six houses share a common battery. For Edison, the aim is to find how distributed energy affects the grid and investments in maintenance can be improved.

“Battery storage is going to be one of the solutions, but it’s not going to be a chicken in every pot,” McAllister says. “It’s going to be strategically located; some behind the meter but also up the food chain, in the neighbourhood, at the substation, at different scales for different applications. There’s a planning activity that isn’t quite fully appreciated.”