As more renewable resources, primarily solar and wind, are added to networks across the globe, they make the generation profile more variable while reducing wholesale prices. This, in turn, makes it more challenging for conventional generators, especially those with little or no flexibility to ramp up and down, to remain viable.

By contrast, flexible generation and storagereceive a premium for their ability to fill in the voids left by variable generation. By the same token, resources that offer flexibility on the customer-side or behind-the-meter (BTM) such as demand response (DR), are expected to be highly valued as explained by accompanying articles in this issue.

This, of couse, is not news. A paper recently published by James Bushnell and Kevin Novan of the University of California, Davis, however, highlights the challenges that the increasing amounts of renewables pose for conventional generators, in particular baseload units, which cannot easily respond to variations in supply and demand.

California does not have any coal-fired plants within its boundaries and is phasing out the remaining contract for out of state coal, which currently accounts for a small and shrinking percent of Calif0rnia’s electricity needs. But its two remaining nuclear plants, PG&E’s Diablo Canyon units, are expected to be shut down by 2025 when their existing operating license expires – rather than seeking an extension to operate longer.

As previously reported in this newsletter, PG&E, the operator of the plant, did the math and concluded that the net value of seeking an extension did not warrant the extra costs.