Clean Energy in California

Day Two: Wind, Demand Response, and Regulation
by -- March 8th, 2011

50 miles to the northeast of San Francisco, we arrive for our first site visit to the High Winds wind farm. The gracefully spinning turbines stand 65 meters tall and are spread out amidst the scenic rolling wheat fields speckled with grazing sheep. The turbines are an impressive sight, commanding the same caliber of respect as do skyscrapers in Manhattan. The 90 turbines at the High Winds site provide enough energy to power about 75,000 homes.

We were met by Bill Haydok, Business Manager of the High Winds farm who warmly welcomed us with cookies in their technician’s office, situated in the middle of the wind farm. Bill gave an excellent presentation on NextEra Energy, which owns and operates this wind farm. NextEra operates in about 26 states and generates 95% of its electricity from clean or renewable resources, making it one of the cleanest energy companies in the U.S.

We have an incredibly inquisitive group and got so wrapped up in asking questions that we almost forgot to leave enough time to actually walk around the site. Bill brought us inside of the base of a wind turbine to understand its magnitude. Ten people comfortably fit in the base of the turbines. We would have stayed all day asking our host zillions of questions, had it not been for Molly and Marianne, who have been phenomenal at coordinating this trip to run like clockwork. They loaded us on the bus and we headed back into San Francisco for our next stop: EnerNOC.

nerNOC

EnerNOC is primarily in the demand response, energy efficiency, and carbon accounting business for large-scale industrial and commercial clients. Tom Arnold, VP of Energy Efficiency and Carbon Solutions, invited us to their beautiful downtown office to chat about EnerNOC’s innovative business model. The company was co-founded by Nicholas School alum, David Brewster, in 2001, and even though they have since gone public, it retains the vibe of a young start-up with incredible talent that is in it to win, and save a ton of energy along the way.

EnerNOC’s main program, DemandSmart, uses smart metering technology to adjust energy consumption for industrial and commercial clients, during times of high demand. The company controls approximately 5 GW of grid electricity (equal in scale to the generation capacity of 5 nuclear plants)! EnerNOC has brilliantly wedged themselves between the utility which can save money by not having to ramp up natural gas plants to meet peak demand and the clients which receive cash for reducing their consumption during these high demand periods. EnerNOC’s model is living proof that saving energy can be sexy and incredibly profitable. Thanks, Tom, for giving us an insider’s peak on a practice that we think will someday be the norm, not just for industrial and commercial, but also for residential consumers of energy.

California Public Utilities Commission

We head back to our hotel in Fisherman’s Wharf for a chat with Melissa Semcer, Administrative Law Judge at the California Public Utilities Commission (CPUC) and also a Nicholas School alum. The CPUC, like any PUC, is responsible for setting electricity rates that are fair for customers while providing a reasonable rate of return to utilities. Melissa gave us an overview of some of the challenges that the CPUC faces, especially with California’s high renewable energy portfolio standards, which were recently raised from 20% to 33% by 2030. The inconvenient truth about renewables, in her mind, is that in addition to being expensive to generate and transmit, they are also difficult to integrate into the grid, given their intermittency issues and our inability to effectively store electricity. Furthermore, with California pushing ahead with their own cap and trade policy for CO2 emissions starting January 1, 2012, there are fears that dirty industries (such as cement production) will relocate to neighboring states, bankrupting the already cash-strapped California. The potential upside, of course, is that if they’re lucky, cap and trade will be successful and one day be adopted by the federal government. It wouldn’t be the first time that California has led the rest of the country towards tougher environmental standards. Thanks, Melissa, for your honest take on current energy issues and career advice for fellow MEM’ers.

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