How coronavirus exposed the importance of marginal emissions

Roughly nine months into the global coronavirus pandemic, much has been written about the temporary—and potentially lasting—emissions reductions that have come along with stay-at-home orders and a deep economic recession. DNV GL’s recently released Energy Transitions Outlook 2020 forecasts 75 gigatons of avoided CO2 emissions through 2050, mostly thanks to a big slump in energy demand that resets the trajectory of annual global emissions.

But a closer look at power grids and how they responded to falling demand shows that there’s more to the story—with implications for how we think about more-effective ways for slashing the emissions associated with our energy use.

WattTime analyst Christy Lewis focused her spotlight on the greater New York City metropolitan area of downstate New York, one of the early hotspots for COVID-19 in the United States. The New York City metro area—currently hosting its annual Climate Week—was hit hard and went into aggressive lockdown. What happened next in that region of the NYISO power grid was revealing.

Let’s zoom in to late March and early April 2020. Although just six months ago on the calendar, in ‘coronavirus time,’ that feels like it was eons ago. For context, the week spanning the March-April transition was also precisely when public interest in Netflix’s Tiger King peaked, which feels like it happened last century, so there’s that. 

By March, the pandemic had already been sweeping around the world, with global financial markets starting to tumble. On March 20, California became the first U.S. state to order its residents into stay-at-home lockdown. New York State followed two days later, on March 22. The story of life—and the economy—under lockdown is probably all-too-familiar to you already. But what transpired on New York’s power grid?

Answer: something curious.

Coronavirus emissions graph in New York City

For most of March, the rolling 7-day average of daily electricity demand and daily grid emissions tracked essentially in parallel. A ~7% drop in average daily load was accompanied by a similar ~7% drop in average daily grid emissions. Then the two curves diverged sharply. The next 7% decline in average daily load came along with a whopping 45% drop in average daily emissions. So what happened?

The answer lies in marginal generators and marginal emissions rates, and what they contributed to overall daily emissions.

New York is a state with bold decarbonization targets: 100% carbon-free electricity by 2040 and a net-zero-carbon economy by 2050. But it’s not there yet. While upstate New York has made great strides with zero-emissions generation (mostly modern renewables such as wind and solar), downstate New York remains heavily dependent on fossil-fueled generation, which accounted for 69% of energy generation in 2019.

Yet as electricity demand rises or falls (mostly the latter, in this era of coronavirus), not all generators respond to that fluctuating demand like a swelling or receding of the tides in New York Harbor. Specific generators—the ones that are sitting ‘on the margin’ of demand—turn on or off, or ramp up or down, to maintain the supply-demand balance.

What we saw happening in those weeks of March and April was the byproduct of a simple fact of grid dispatch order: as electricity demand continued falling through late March and then into April, the marginal generators that were turning off were by and large the polluting, fossil-fueled ones. Even though demand declined gradually, New York’s downstate grid got a lot cleaner in the process. Data from WattTime’s analysis confirms as much: Throughout the first month of New York’s stay-at-home order, carbon-free generation remained a stalwart, supplying 7,500 to 8,500+ megawatts (MW) of capacity each day. Meanwhile, fossil-fueled generation plummeted, from supplying 5,500 MW of daily generating capacity at the start of lockdown to just 3,500 MW by mid-April.

So with economies around the country and around the world trying to rebound (or at least wanting to), what do we do with this insight? As energy demand climbs alongside economic activity, are we destined to see carbon emissions rise, too? Not necessarily.

In the same way that New York’s electricity demand and associated grid emissions decoupled in late March and early April thanks to the influence of marginal generators, so too do real-time grid emissions fluctuate all the time, not just during pandemic-induced global economic recessions. Every time you flick a light switch, plug in an electric vehicle to charge, schedule the battery from a residential solar+storage system in California to discharge… a marginal generator responds. And whether that marginal generator is surplus renewable energy or a polluting peaker plant can have a big influence on the emissions your energy use causes. Such fluctuations are most pronounced in grid regions amidst their fossil-to-renewable energy transition, where there’s a mix of clean and dirty generation.

Solutions like WattTime’s Automated Emissions Reduction (AER) technology harness this insight and convert it into a software signal that allows smart devices—thermostats, EVs, batteries, heat pumps, etc.—to sync their demand with moments of clean energy and avoid moments of dirty energy. Adopted at scale, it makes the kind of huge emissions reductions that downstate New York saw earlier this year achievable anytime, anywhere. 

We didn't need a global pandemic to find new examples of the deeper, faster emissions reductions right in front of us, but, well, here we are. Let's do something about it.

Image: Emiliano Bar | Unsplash

WHEN renewables produce electricity will become increasingly important for how much carbon emissions they displace

Once upon a time, when renewables produced a negligible amount of electricity and fossil-fueled power grids were essentially “always dirty,” adding new renewable energy wherever and whenever was a reasonable strategy. You could be more or less assured that your new renewable generation would be displacing emissions from a polluting power plant somewhere.

But we’re increasingly seeing that when renewables generate their electricity is beginning to matter, and sometimes a lot. The coincident timing of tons of daytime solar PV generation is behind California’s infamous Duck Curve. Likewise, coincident timing is also behind ERCOT’s curtailment of surplus overnight wind generation in Texas and occasional dips into negative wholesale power prices. 

(Annual wind curtailment in ERCOT peaked in 2009 around 17%. Transmission expansion helped bring that number down to an estimated ~2% in 2019, but that number was expected to start creeping upward again into 2020 as a large amount of new wind capacity came online at the end of last year.)

Now, a new WattTime analysis shows that the timing and overall generation shape of new renewable energy capacity can have a big impact on the avoided emissions staying power—or not—of various renewable technologies (see Figure 1). This in turn can have a big influence on how rapidly we’re able to decarbonize U.S. electricity grids.

Renewable generation timing graph

Solar’s diminishing returns vs. wind and geothermal’s staying power

WattTime analysts Christy Lewis and Henry Richardson looked at California’s grid out through year 2044 to better understand the avoided emissions rates of solar PV, wind, and geothermal technologies. In other words, when you looked at the grid’s carbon emissions rate vs. their respective generation shapes, how much emissions would they displace at any given point in time.

Spoiler alert: not surprisingly, the emissions rate during midday hours eventually sunk toward zero, as solar energy saturated the grid. For that same reason, the avoided emissions value of building yet more solar also sunk over time. It was a classic case of diminishing returns. The more that previously installed solar already reduced daytime emissions, the less value adding yet one more megawatt of solar would have for that grid. It’s a kind of merit order effect, only for emissions rather than economics.

On the other hand, when Lewis and Richardson looked at geothermal and wind, they found that both of those renewable technologies had real staying power when it came to avoided emissions. In the case of wind power, it was a byproduct of serendipity. Wind generation in California happens to naturally peak at the same time as grid emissions, so adding more wind capacity continues helping to chop that emissions peak down. For geothermal, it was about its always-on and/or dispatchable nature. Geothermal is able to generate during all those “forgotten,” overlooked times of the day and night when solar and wind aren’t producing. It covers critical gaps in the generation profile of a 24-hour day, and thus also has staying power (see Figure 2).

Avoid emissions rate for renewable technologies graph

Is it geothermal’s time to shine in the U.S.?

Think “geothermal energy” and you probably think of a place such as Iceland. And for good reason: it’s a world leader, with geothermal accounting for fully two-thirds (66%) of the nation’s primary energy use and 25% of electricity production. Compare that to the U.S., where geothermal accounted for just 0.4% of electricity generation in 2018.

But although geothermal is small in the U.S. today—and although wind, solar, and storage capture much of the spotlight—geothermal could play a much larger and crucial role in the country’s future electricity system as a vital part of a broader renewable portfolio.

The U.S. currently has about 2.5 GW of operating geothermal capacity. Compare that to a whopping 105 GW of installed wind capacity and 71 GW of installed solar capacity. Some 95% of the geothermal capacity is in just two states: CA and NV. And nearly half the capacity came online in the 1980s. However, that all could change. A 2008 USGS survey identified nearly 40 GW of hydrothermal potential for electricity generation. And half of U.S. states specifically allow for geothermal as an approved way to meet RPS targets.

Moreover, a number of promising startups gaining momentum, including Fervo Energy, backed by heavyweights such as Breakthrough Energy Ventures, Berkeley’s Cyclotron Road, U.S. Department of Energy, and Stanford University.  

Geothermal vs. “mainstream” renewables solar and wind

Like wind, solar, hydro, and other renewable energy technologies, geothermal is a form of emissions-free electricity generation. But that’s about where the comparison to other renewables stops.

For starters, U.S. geothermal electricity production has boasted an average capacity factor around 76%, while newly constructed plants can approach 100%, only furthering the juxtaposition vs. wind and solar.

Second, there’s the issue of generation shape. Because of geothermal’s high capacity factor, some think of it as a kind of always-on baseload renewable generation. Others instead characterize it as dispatchable renewables that can be ramped up or down (without the need to pair it with an energy storage system, as in the cases of wind and solar).

Finally—and to the point of the recent WattTime analysis—there is the matter of avoided emissions, a topic that becomes even more important in the years ahead as the U.S. adds more renewables to the power grid en route to a low-carbon electricity system. Because geothermal can generate electricity pretty much continuously, and perhaps more importantly, because geothermal can produce energy when wind and solar can’t, it retains its avoided emissions value out to 2030 and likely beyond.  

Renewables and the climate crisis

As we collectively look ahead to renewable energy project pipelines, there remains the issue of where to build new renewable capacity (a concept WattTime calls emissionality). But increasingly, there will be growing importance on paying attention to generation shapes and when a particular renewable technology can inject clean energy into the grid and help slash the fossil-fueled emissions rate. 

This suggests a strong growing role for geothermal and a continued important role for wind, as solar’s diminishing returns on avoided emissions in places like California mean we’ll have to look elsewhere for “getting more of the carbon out” of our power grid. That’s not to say by any means that the sun is setting on solar. It will continue to play an important role in today’s and tomorrow’s electricity system. 

But as more grids mature in their transition from fossil fuels to renewables, getting the carbon emissions out of the system as quickly as possible will require a more careful look at when renewables generate their electricity and how much emissions they’re displacing when they do.

New Report Finds Emission-Optimized Charging Can Make Electric Vehicles Nearly 20 Percent Cleaner Annually

WattTime analysis shows smart timing of EV charging can reduce associated grid emissions throughout the U.S. and support renewable energy growth

OAKLAND, CA – September 10, 2019 — Environmental tech nonprofit WattTime today announced the release of a new report, How Emissions-Optimized EV Charging Enables Cleaner Electric Vehicles.

The analysis explores how correctly implemented emissions-optimized charging for electric vehicles (EVs) can further improve their environmental performance, as measured by grid emissions associated with EV charging. It also estimates aggregate environmental benefit based on 2030 adoption rates for EVs. 

While all EVs are cleaner than the average internal combustion engine auto—even when charged on a dirty grid—WattTime’s report found that smarter charging can make EVs even cleaner. Top report takeaways include: 

“Our research shows that—without ever having to touch the electric powertrain’s efficiency—this smarter method of charging essentially gives an instant ‘MPGe boost’ to EVs,” said Christy Lewis, WattTime analyst and lead author of the report. “There’s a lot of talk about how EVs can act as a grid asset, and now we have analysis that shows a compelling value proposition for using software intelligence to shift charging to moments of clean power; for once, there is an ‘eco easy-button’ that EVs can use to automatically reduce emissions at scale.” 

The analysis compares emissions-optimized charging vs. baseline EV charging in multiple regions of the U.S. The report examines four U.S. grids in varying degrees of transition from fossil fuels to renewables, including grids in California, New York, the Midwest, and the Southwest. Two common charging scenarios were compared: daytime workplace charging and overnight at-home charging. In addition, WattTime considered both average-mileage and high-mileage driver profiles. 

What makes this analysis particularly valuable is WattTime’s use of real-time marginal emissions data—as opposed to annualized average emissions numbers—to get a more-granular look at EV charging and quantify its true emissions impact. Through that lens, the report then examines the effects of implementing a time-based emissions signal, like Automated Emissions Reduction (AER) software, to automatically shift charge times to moments of cleaner power. AER uses past, present, and predictive grid data—combined with sophisticated algorithms and machine learning—to allow any internet-connected smart device to optimize its energy use in order to reduce CO₂ or other pollutants. 

Three major, converging trends prompted WattTime’s analysis:

  1. Electric vehicle adoption continues to surge in the United States, and is predicted to leap from 1 million in 2018 to nearly 19 million in 2030
  2. In tandem with that growth, a proliferation of smart, level 2 EV charging stations in homes, offices, and public spaces will offer opportunities to optimize charge timing, since they typically require less time than the full charge window to recharge an EV battery.
  3. Grid emissions rates are becoming increasingly variable thanks to the addition of more renewable energy sources to the nation’s grids. This constant variation—occurring as much as every five minutes—presents an opportunity to sync EV charging with times of clean energy and avoid dirty energy.

The potential for sizable carbon emissions reductions revealed by the report is clear: If smarter charging were to be deployed across California’s target of 5 million zero-emissions vehicles (ZEV) by 2030, it would result in the equivalent of taking over 180,000 gasoline-burning cars off the road. Similarly, if applied to New York’s target of 2 million EVs by 2030, smarter charging would result in the equivalent removal of almost 48,000 gasoline-burning cars. These numbers are above and beyond any baseline emissions benefits provided by EVs.

“Although emissions reductions are probably the most exciting direct result of smarter EV charging, the ripple effect is truly outstanding,” said Lewis. “We can use EV adoption as a tool to drive the clean energy transition. By allowing EV chargers to sync with times of renewable energy on the grid, we can make them even more competitive and cost-effective than fossil-fueled power.”

Emissions-optimized charging via AER software has already been implemented commercially by Enel X (formerly eMotorwerks), which offers the feature in their JuiceBox Green 40 EV charger.

About WattTime
WattTime is a nonprofit with a software tech startup DNA, dedicated to giving everyone everywhere the power to choose clean energy. We invented Automated Emissions Reduction (AER), which allows utilities, IoT device and energy storage companies, and any end user to effortlessly reduce emissions from energy, when and where they happen. Our cutting-edge insights and algorithms, coupled with machine learning, can shift the timing of flexible electricity use to sync with times of cleaner energy and avoid times of dirtier energy. We sell solutions that make it easy for anyone to achieve emissions reductions without compromising cost and user experience. WattTime was founded by PhD researchers from the University of California, Berkeley, and in 2017 became a subsidiary of Rocky Mountain Institute. For more information, please visit

Media Contact
Nicole Arnone
Client and Media Relations Manager

Executive Director and Co-Founder of WattTime selected as Draper Richards Kaplan Foundation Entrepreneur

Cleantech innovator Gavin McCormick joins portfolio of highly impactful social enterprise leaders

OAKLAND, December 11, 2018 — WattTime is proud to announce the selection of Gavin McCormick, the cleantech nonprofit’s Executive Director and Co-Founder, as a Draper Richards Kaplan (DRK) social entrepreneur.

WattTime will receive $300K of financial support over the next three years. One-third of that funding will come in the form of a loan, as DRK Foundation opts to participate in an innovative debt financing round led by RSF Social Finance. In addition, McCormick will receive executive support to scale WattTime and access to a valuable network of other social entrepreneurs, partners, and domain experts.

The DRK Foundation seeks to make a significant impact on our society’s most challenging issues through innovative strategies, systems level change, and disruptive technologies.  DRK partners with early-stage entrepreneurs to build sustainable and scalable organizations by providing funding, organizational support and an unparalleled network of entrepreneurs. Their portfolio spans the entire globe and ranges from climate organizations to educational groups and beyond.

As a nonprofit, McCormick and WattTime are especially suited to the rigorous support provided by DRK Foundation. McCormick and the WattTime team use machine learning and automation to reach new frontiers in energy choice and give people and companies a simple way to choose to use clean energy.

Potential for expansive impact is an important quality shared by all DRK Foundation portfolio organizations, and WattTime’s solutions are poised for widespread adoption. Their Automated Emissions Reduction (AER) technology, which turns smart devices into powerful tools for carbon emissions reduction, has the potential to be deployed globally on 23 billion devices by 2020. If adopted at scale in the U.S. alone, it could eliminate 380 million tons of CO2 emissions.

“To say the WattTime team and I are honored to join the ranks of other DRK Foundation organizations is an understatement,” said McCormick. “We often operate like a startup, but we’re a nonprofit at our core, and we rely on the confidence and support of groups like DRK in order to make the greatest impact. Their partnership will be essential in helping WattTime achieve its mission to give people everywhere the power to choose the energy they use.”

As WattTime begins its partnership with DRK Foundation, the nonprofit also welcomes Stephanie Khurana to its board. Khurana is a DRK Foundation Managing Director and successful serial entrepreneur with deep experience in building SaaS companies.

Included in the list of other DRK portfolio organizations are: Kiva, the world’s first crowdfunding platform for social good; SIRUM, a group that redistributes unused prescription medicines to low-income patients; and Kinvolved which catalyzes communities to keep kids in school through a text-based parent engagement platform.

Learn more about McCormick, WattTime and their involvement with DRK Foundation here.

About WattTime
WattTime is a nonprofit with a software tech startup DNA, dedicated to giving everyone everywhere the power to choose clean energy. We invented Automated Emissions Reduction (AER), which allows utilities, IoT device, energy storage companies, and any end user to effortlessly reduce emissions from energy, when and where they happen. Our cutting-edge insights and algorithms, coupled with machine learning, can shift the timing of flexible electricity use to sync with times of cleaner energy and avoid times of dirtier energy. We sell solutions that make it easy for anyone to achieve emissions reductions without compromising cost and user experience. WattTime was founded by PhD researchers from the University of California, Berkeley, and in 2017 became a subsidiary of Rocky Mountain Institute.

For more information, please visit  

WattTime selected as finalist for 2018 Global Energy Awards

The energy tech nonprofit was included as a final choice for the “Emerging Technology of the Year” category by S&P Global Platts

OAKLAND, October 3, 2018 — Today, WattTime announced it has been named to the list of finalists for the S&P Global Platts 2018 Global Energy Awards in the category of “Emerging Technology of the Year.” Finalists in the category are recognized for the “research and development, ingenuity and commercialization potential of new technologies” in areas ranging from renewable energy, to energy storage, to blockchain applications. WattTime, a non-profit subsidiary of Rocky Mountain Institute, is working toward a simple goal: give everyone the freedom to choose the power they use. Their recognition was earned in large part through its work on Automated Emissions Reduction (AER) technology, software that allows smart devices to shift energy usage times to align with moments of cleaner power, thus reducing CO2 emissions by grid-connected devices. “Our team is proud to be recognized as a finalist in the Emerging Technology of the Year category," said Gavin McCormick, co-founder and executive director of WattTime. "And hopefully we won't be on this list for long. With our AER solution, a future where consumers choose the energy they’re using can be realized globally in as little as two years if adopted at scale, particularly by device makers, including battery storage companies, and utilities + demand response aggregators. “We hope this Global Energy Awards recognition helps to shine a spotlight on the opportunity for this technology to easily and  affordably reduce emissions while also encouraging the integration of more and more renewable energy into the grid." An independent panel of judges—including former regulators, past heads of major energy companies, leading academics, and international energy experts—will decide the winner. Final winners in all categories for the Global Energy Awards will be announced on 6 December 2018 at a black-tie celebration at Cipriani Wall Street in New York City. About WattTime WattTime is an environmental non-profit built on cutting edge research by University of California, Berkeley PhDs. WattTime’s "environmental demand response" platform makes it possible to actually choose which power plants your devices rely on. With a simple software update, smart device owners can instantly and permanently reduce their carbon footprint and other pollution, and help clean and renewable power plants compete on the grid. Forward-looking companies partner with WattTime to empower their users to make a real difference for the environment that is as easy as pushing a button. For more information, please visit

Contact Nicole Arnone Client and Media Relations Manager +1.770.856.7185

How Michigan’s 50% clean energy target could open new emissions reduction opportunities

Last month environmental advocates led by activist Tom Steyer and a coalition known as Clean Energy, Healthy Michigan claimed a major victory in advancing the state toward a clean energy—and a clean air—future.

Faced with a looming November 2018 ballot initiative that would have required 30% of Michigan’s electricity sales to come from renewable energy sources by 2030, the state’s two largest utilities, DTE Energy and Consumers Energy, jointly announced instead to target 50% clean energy by 2030. At least 25% of their electricity sales will come from renewable energy. The balance of the target they’ll meet largely through energy efficiency.

This latest major development comes fast on the heels of two other notable bright spots earlier this year. In February, Consumers Energy announced that it would phase out its coal-fired generation over the next two decades, while also targeting generating at least 40% of its electricity from renewable energy sources by 2040. Then in April, DTE Energy submitted its 2018 Renewable Energy Plan to the Michigan Public Service Commission. The plan calls for doubling the utility’s renewable energy capacity by 2022 from 1 to 2 GW and driving $1.7 billion in clean energy investment, largely in wind energy with a small amount of solar.

All told, it comes as a big breath of fresh air to a state that wrestled with the problem for years.

Michigan’s fight for cleaner air

At the beginning of this decade, Michigan and its residents faced an air quality crisis underscored by two damning reports released just months apart. In May 2011, the journal Health Affairs published research showing how chronic air pollution around schools in Michigan was linked to poorer student health and academic performance, disproportionately affecting low-income and racial or ethnic minority communities. One of the chief sources of air quality problems? Power plant emissions.

Two months later, in July 2011 the Natural Resources Defense Council released its Toxic Twenty report, shining the spotlight of attention on those states with the highest levels of toxic air pollution from power plants. Michigan’s overall total industrial toxic air pollution was among the worst in the country. It ranked seventh worst specifically for toxic air pollution from the electricity sector, which accounted for 73% of the state’s air pollution.

By 2016, Michigan’s air pollution situation had started to improve according to the State’s annual air quality report, but still had a long way to go. In March of that year, Medical Daily–part of the Newsweek Media Group and boasting more than 8 million unique visitors per month and 2.2 million Facebook followers—declared Michigan’s air quality problem much bigger than the infamous water problem in Flint. More needed to be done to address the issue.

Clearer skies ahead for Michigan

At a time when other states from Hawaii to Oregon to New York have set bold renewable energy and clean energy targets, Michigan’s is particularly exciting because of how much positive impact it could have.

Last year fossil fuels generated just shy of 60% of Michigan’s electricity; coal alone accounted for 37%, according to numbers from the U.S. Energy Information Administration. Renewables including hydro, meanwhile, generated just 8%.

According to a basic WattTime analysis, every megawatt of new wind energy built in Michigan today will displace about two-thirds coal-fired generation and one-third natural gas-fired generation. Thus based on today’s grid mix in Michigan, new renewable energy projects could avoid around a whopping 1,700 lbs CO2 emissions per MWh of generation. To put such numbers into perspective, that 1,700-lb swing in Michigan’s marginal grid emissions from dirty to clean makes the emissionality benefits of new renewables—how much fossil-fueled emissions are avoided for each MW of new renewables built—among the best in the country.

In fact, on an avoided-emissions-per-new-renewable-megawatt basis, renewable energy investments in Michigan are about twice as effective as similar investments in places such as parts of California, Florida, and Massachusetts and roughly 1.5x as effective as neighboring Great Lakes states such as New York.

And the benefits don’t stop there. As Michigan’s grid gets closer to its 50% clean energy target, the grid’s “personality” will change, too. It’ll go from being a “monotone” personality defined by a more or less steady stream of traditional, dirty, coal-fired baseload generation to a “dynamic” personality characterized by much larger minute-to-minute and hour-to-hour swings in marginal grid emissions depending on whether natural gas or variable renewables are supplying the electrons. This unlocks a whole other realm of possibility.

With a grid that has a constantly fluctuating rate of marginal emissions—from dirty to clean to dirty and so on—smart devices such as thermostats, electric water heaters, electric vehicles, battery energy storage, etc. can use real-time and predictive signals from a source such as WattTime in order to automatically and effortlessly use cleaner energy and avoid dirtier energy. This effectively multiplies the emissions benefits of Michigan’s new renewable energy and its clean energy target.

Depending on the specific device and how flexible you assume its electricity demand can be, this capability generates a “bonus” emissions reduction of 5–15% or more above and beyond the aforementioned savings achieved by increasing renewable energy on the grid. For example, an electric vehicle recharging overnight has a lot of flexibility to decide specifically when it’s pulling electricity to charge the vehicle and when it wants to “wait” for the grid to get cleaner.

For certain, Michigan’s electricity sector air quality concerns won’t turn around overnight. But this year’s 50% clean energy target agreement and what it means for toxic air pollution and human and environmental impacts means that there’s a good sightline to clearer skies ahead. And here at WattTime, we’re equally excited about the role that flexible demand can play for enabling smart devices to automatically and effortlessly choose cleaner energy, in the process helping Michigan make ever greater progress in its journey toward cleaner air.

Clean energy portfolios could be an avoided emissions juggernaut

By Peter Bronski

In early January, the California Public Utilities Commission (CPUC) issued a ruling that might well prove to be a bellwether for natural gas-fired power plants: the CPUC directed one of the state’s investor-owned utilities to procure energy storage and/or preferred resources such as demand response and distributed solar to replace three existing gas plants (two gas peakers and a 580-megawatt combined cycle plant).

In the months since, we’ve come to know such combinations of energy storage, flexible demand, and distributed energy resources such as rooftop and community solar by another name: clean energy portfolios. And the idea that these clean energy portfolios could be both technologically and economically competitive with natural gas power plants represents a landmark shift for the market.

That shift now appears to be on the precipice of a major inflection point, per a new report released late last month by Rocky Mountain Institute, The Economics of Clean Energy Portfolios. A team from RMI analyzed four planned natural gas power plants in different regions of the U.S. and evaluated instead replacing them with portfolios of renewables, energy efficiency, demand flexibility, and storage.

More than 100 gigawatts of new, announced natural gas power plants are planned for the U.S. through 2025. Extrapolating retirements and anticipated further new builds through 2030, that “rush to gas” comes with a hefty price tag, locking in $1 trillion in combined infrastructure investment and fuel costs (just over half for capex, the remainder for opex). It also comes with a massive emissions footprint: 5 billion tons of CO2 through 2030 and 16 billion tons through the 20-year lifetimes of those gas plants.

Could clean energy portfolios obviate such as a costly scenario? According to RMI’s analysis, yes. And incorporating WattTime insights and capabilities into those portfolios could make their emissions benefits even greater.

The four real-world scenarios RMI evaluated included:

The corresponding clean energy portfolios varied according to the local grid mix and the primary services they needed to deliver (e.g., baseload capacity, peaking capacity, flexibility/ramping). The portfolios ranged from half wind paired with some storage and energy efficiency to three-quarters flexible demand paired with smaller slices of solar, storage, and efficiency.

“The biggest factor influencing portfolios in each region was the compatibility of local renewable resources with regional load profiles,” explains Mark Dyson, a principal at RMI and one of the lead authors of the new report. “For example, the West Coast region has significant existing solar, so the clean energy portfolio we modeled there relies heavily on new wind to balance solar production. In contrast, we found that new solar in Florida was very valuable for meeting mid-day loads in a state without as much existing solar capacity.”

Even with RMI’s conservative assumptions, the economics were impressive—from essentially net present cost parity in some scenarios (i.e., plus/minus 10%) to substantial savings of 40–60% in other scenarios—prompting media outlets such as Forbes to declare “the ‘rush to gas’ will strand billions as renewables get cheaper.”

“Given the cost declines in renewables and battery storage in recent years, it's not surprising that the economics look good for clean energy portfolios today. What's surprising is how fast the economics turn even better, and the stark implications for investment in new natural gas infrastructure,” Dyson adds.

The emissions side of the story may prove even more profound than the economic one. Clearly, in each of the four scenarios RMI analyzed, the clean energy portfolios avoid the fossil-fueled emissions that would come onto the grid if each of those natural gas plants gets built. Over the 20-year life of those plants, the savings range from 1–2 million tons of cumulative CO2 to upwards of 66 million tons. Across the four scenarios alone, the savings total more than 90 million tons. Total nationwide savings could reach 16 billion tons.

There are likely even further emissions savings available for the taking. For starters, replacing a natural gas power plant with a clean energy portfolio changes where those megawatts of generation sit in the merit order dispatch stack, the order by which grid operators call upon supply-side resources to meet electricity demand. The generator that fulfills the last megawatt of demand is known as the marginal generator.

Renewables generally sit first in the stack, thanks to their near-zero marginal operating costs (e.g., no fuel costs vs. fossil-fueled plants). This means that clean energy portfolios further build up the renewably-generated bottom of the merit order dispatch stack and thus potentially push even more fossil-fueled marginal generation out the top of the stack, above and beyond obviating the new-build gas plant. These “bonus” avoided marginal emissions will vary by location and its local grid mix, but they are very much real.

Further, RMI’s assemblage of clean energy portfolios includes a healthy mix of flexible demand, which equals up to three-quarters of the pie in the case of the Florida portfolio. This represents yet another opportunity to avoid emissions. That’s because how clean or dirty the grid’s electricity is varies across the hours of the day and night, depending on which generation sources are providing the electricity.

When WattTime-enabled smart devices such as thermostats, grid-interactive water heaters, electric vehicles, and others are enabled with the right software signal, they can automatically and effortlessly use their flexible demand to arbitrage clean and dirty grid times, choosing to consume electricity when generation is cleaner and to avoid energy consumption when it’s dirtier. In places where there’s both legacy dirty generation and a sizeable chunk of clean, variable renewable generation, the per-kWh opportunity to shave emissions can be huge.

So what’s next for making the promise of clean energy portfolios a reality? “The path forward requires solving some of the ‘soft cost’ challenges of integrating multiple technologies to meet grid needs,” says RMI’s Dyson. “In particular, customer acquisition costs for energy efficiency and demand response programs can be significant. WattTime-enabled demand flexibility can improve the customer value proposition and help scale deployment of demand-side resources.”

The net takeaway is that clean energy portfolios present a compelling cost-competitive, emissions-less alternative to new natural gas power plants and they can unlock even greater emissions-reduction benefits. This is exciting. As renewable energy continues its rapid growth, the grid’s decarbonization could accelerate even faster ahead of renewables’ megawatts expansion.