Distributed Energy Resources as a Solution to the San Onofre Outage

In 2011, the San Onofre Nuclear Generating Station supplied nearly 20 percent of Southern California’s electricity. This year, the plant has generated almost nothing. Since early January, the plant has sat idle after the plant’s operators discovered leaks in the steam generator. It is unclear when, if ever, the plant will be brought back online.

Yet Southern California has not faced any major blackouts this year. That’s been a surprise to many who thought that San Onofre was critical for maintaining reliability. Grid operators and planners have been able to avoid blackouts by relying on recent transmission upgrades and old gas plants, like the one in Huntington Beach, which was brought out of retirement.

The future, though, remains uncertain. The situation at San Onofre is still unresolved, and some of the old gas plants that helped the region ride through last summer without a blackout will not comply with new clean air standards. It’s critical to step back and evaluate all the options on the table.

In RMI’s discussion paper, “Reinventing Fire in Southern California: Distributed Resources and the San Onofre Outage,” we evaluate the role that distributed energy resources could have as a solution to the near-term supply gap, while also advancing California’s long-term goals of reducing greenhouse gas emissions and supporting local economic development and job creation.

The resources that we assessed include:

• Behavioral savings
• Demand response
• Energy efficiency • Solar photovoltaics (PV)
• Combined heat and power (CHP) and fuel cells
• Storage

To unlock these resources and encourage their adoption by utilities and their customers, California lawmakers will have to introduce new policies soon.In the report, we recommend they:

• Create a level playing field by pursuing policies that fairly account for the benefit of distributed resources and encourages them to scale up quickly.
• Investigate applying targeted incentives to encourage deployment of distributed resources in geographical areas where energy is most needed.
• Hasten permitting and interconnection procedures to fast-track solar resources coming online.

While these changes will benefit the short-term situation in Southern California, they will also enable the state to move more certainly and swiftly toward renewable energy generation levels well beyond the current 33 percent goal set by the state.

The unexpected loss of electricity supply from the San Onofre plant presents a formidable short-term challenge for utilities, system planners, and grid operators. But we believe that with distributed resources, stakeholders can turn the current challenge of providing reliable electricity in Southern California into a new opportunity.

To generate these innovative solutions, RMI is convening a diverse group of stakeholders through our Electricity Innovation Lab to accelerate the transformation to a more efficient, renewable, and distributed U.S. electricity system.