Natural Gas Microgrids Do What Solar and Batteries Alone Can’t for California Resiliency

California utilities face resistance to deploying natural-gas generators. But the alternative may be dirtier diesel.

Earlier this year, utility Pacific Gas & Electric faced pushback from environmental and solar and energy storage industry groups to a plan to deploy natural-gas generators to back up communities facing multiday fire-prevention blackouts. The groups argued that California utilities shouldn’t be adding new carbon- and pollution-emitting resources when the state is trying to meet ambitious zero-carbon goals. 

Now PG&E is planning to rely on mobile diesel generators instead, at least for this year. But as California regulators grapple with the best way to provide multiday power backup for wildfire and blackout-prone communities, a new report says that solar and batteries can’t do the job alone.

The report is from consultancy The Brattle Group and sponsored by Enchanted Rock, a Texas-based developer of microgrids based on natural-gas generators. It indicates that providing two to four days of backup power for a 10-megawatt community microgrid from solar and batteries alone would require far too much redundant battery capacity — up to 350 megawatt-hours of batteries for 10 megawatts of load — and require up to 90 acres of solar PV to reliably charge them over that time.  

Natural gas generators, on the other hand, can provide steady power for emergency needs and bid into state resource adequacy and energy markets to cover their costs, the report says. Combining them with solar and batteries, or offsetting their emissions by capturing renewable natural gas (RNG), or methane from dairy farms, landfills and wastewater treatment plans, could further reduce their greenhouse gas impacts. 

Natural gas vs. diesel vs. solar-storage

Solar-plus-storage companies and environmental advocates have opposed fossil-fueled microgrids to solve California’s wildfire and blackout challenges. Sunrun, the country’s biggest residential solar provider, has asked the California Public Utilities Commission to prioritize carbon-free resources and create pilot projects to show how behind-the-meter batteries can support community resiliency needs. 

But not all fossil-fueled microgrids are created equal; natural-gas generators are cleaner than diesel generators, which are currently the only short-term solution for Californians facing multiday blackouts, said Thomas McAndrew, CEO of Enchanted Rock. He hopes the Brattle report will inform ongoing microgrid policy development in California, which is being driven by the need to keep vulnerable communities protected during fire-prevention blackouts. 

Environmental advocates and communities opposed PG&E’s initial natural-gas plans. "What we’ll see in 2020 is a lot of diesel,” McAndrew said.

Opponents to adding more natural-gas generators argue that tapping the growing network of battery-backed solar at homes and businesses should be the first priority for utilities and regulators. 

“We don’t imagine that storage alone would solve all the problems, and it might be a little more costly to do it on its own. But there are a lot of initiatives utilities can do to prepare a targeted response with the resources that are available in each community,” said Luis Amezcua, senior campaign representative for the Sierra Club. “All of these resources should be looked at before they consider new permanent gas or RNG facilities.” 

California's Self-Generation Incentive Program is directing hundreds of millions of dollars in incentives toward backup batteries for customers and communities most vulnerable to wildfires and outages. 

But communities facing fire-prevention blackouts right now may not be able to wait for regulators and utilities to create community resiliency plans built around local clean resources, Tim Hade, COO of Scale Microgrid Solutions, said in a recent interview.

While some homes and small businesses can configure solar-storage systems to power only critical loads for days at a time, “if you tell commercial-industrial customer, ‘We’ll give you a solar-storage system, and in the event of a two- to four-day outage, you’ll be able to run your store for four hours,’ they’ll just go buy a diesel generator," Hade said.

Counting costs and carbon impacts

Allowing diesel generators to become the default backup technology for blackout-prone parts of California would not only harm local air quality and carbon emissions, but impose stranded costs on the state, Enchanted Rock's McAndrew said. PG&E plans to spend about $173 million for up to 450 megawatts of backup diesel generators this year. Subtracting fuel costs, the costs of the generators themselves equates to roughly $140 per kilowatt-year, assuming they can all be deployed to where they’re needed for every blackout, he said. 

Brattle’s report indicates the equivalent cost for natural-gas-fired generators operating on fossil fuel is as low as $6.80 per kilowatt-year. Using RNG increases that cost to $45 per kilowatt-year, since its supply is limited. 

Brattle Group's report models rich burn natural-gas reciprocating engines like those used by Enchanted Rock, with nitrogen oxide, particulate matter and volatile organic compound emissions lower than 1 percent of those of a Tier 2 diesel engine. While they still emit carbon dioxide, a 500-megawatt fleet of generators running about 275 hours per year for backup and to earn capacity and energy revenue, as Brattle modeled, would emit about 0.002 percent of PG&E’s total carbon footprint in 2018, or 0.0003 percent of statewide natural-gas consumption. That could be reduced to zero if biomethane capture is added to the equation, McAndrew said.

"Not a zero-sum game"

Adding solar and batteries to serve at least a portion of the microgrid’s power needs could reduce the cost of an RNG-powered microgrid to between $40 and $37 per kilowatt-year, depending on how much land is available for solar PV to serve the community, he said.   

Enchanted Rock also sees the potential for natural-gas generators buying biomethane captured and fed into pipelines elsewhere to help boost California’s longer-range renewable energy growth plans. Local generators could also help balance intermittent renewable power on distribution grids while also serving reliability needs for state grid operator CAISO. The Houston-based company has commissioned about 360 megawatts of systems in 1-megawatt to 20-megawatt configurations and can provide mobile generators as well. 

“This is not the zero-sum game that folks are making it out to be,” McAndrew said. “The more you can use natural gas or renewable natural gas, the more you can grow the solar and storage market in general.”