Peninsula Clean Energy, a local government-run retail power supplier based in Redwood City, Calif., wants to lead the U.S. power sector's energy transition by supplying renewable energy to customers in its Northern California service territory 24 hours a day, seven days a week.

The community choice aggregator, or CCA, already delivers 100% carbon-free electricity to meet the annual electricity demands of about 310,000 residential, commercial and industrial customers, mostly in San Mateo County. In November 2022, the agency's board of directors adopted an updated strategic goal: deliver 100% renewable energy by 2025 on an annual basis, in addition to 99% of the time on an hourly basis.

By doing so, Peninsula Clean Energy seeks to wean itself off the natural gas generation that shoulders much of the load when variable wind and solar are not available while eliminating the related emissions that occur even with a 100% zero-carbon portfolio measured by annual supply-demand matching. The strategy, underpinned by a new analysis released by Peninsula Clean Energy on Jan. 10, could be a template for the broader California and U.S. power sectors to reach deeper levels of decarbonization, say participants in the study.

"If California does this, then emissions are going to go down," Peninsula Clean Energy CEO Jan Pepper said in an interview. As more retail energy suppliers take up the challenge, it can create "a lot of synergies," she added, pointing to opportunities to share oversupplies of various renewable energy resources at different times of the day.

While the now-pervasive 100% renewable energy and zero-carbon targets of jurisdictions and organizations across the U.S. are largely focused on annual supply and demand, "people are starting to think more hourly," Pepper said.

"Procuring clean and renewable electricity on a 24/7, hour-by-hour basis is the next frontier in clean energy procurement," Jesse Jenkins, assistant professor at Princeton University's Andlinger Center for Energy and the Environment, said in a statement. "Peninsula Clean Energy's rigorous new modeling points the way forward."

Enabled by a new publicly accessible modeling tool, the approach "demonstrates how advanced clean energy procurement strategies can drive down the emissions associated with electricity use, while also supporting the broader transition across California to a carbon-free grid, all while maintaining affordability and reliability," said Mark Dyson, managing director of the carbon-free electricity program at nonprofit research group RMI.

Both Jenkins and Dyson were advisory board members for Peninsula Clean Energy's peer-reviewed analysis.

'Sweet spot'

The study identified a "sweet spot" where Peninsula Clean Energy's renewable energy supplies cover customer demand 99% of the time at a cost premium of only 2% compared to its current portfolio.

"We feel that the 99% goal is reasonable," Pepper said. "In a conservative case, it still looks like it's cost-effective."

As determined in the analysis, the CCA's portfolio capable of delivering renewables 99% of the time on an hourly basis by 2025 leans heavily on energy storage and a mix of renewables with varying traits. It includes 751 MW of solar, 586 MW of onshore wind, 351 MW of energy storage, 187 MW of geothermal energy and 16 MW of small-scale hydropower.

The model found that trying to match that last 1% with customer demand on an hourly basis boosted portfolio costs by 10%.

"It's a pretty big jump, which is why we decided that it wasn't worth it," Pepper said.

Supplying customers with 100% renewable energy at all times of the day is the retail energy supplier's ultimate aspiration, however. Demand-side resources, offshore wind and non-lithium-ion battery storage technologies are among the tools that could advance that ambition as they mature, the CEO said.

Winter hours hardest to serve

The most challenging hours for Peninsula Clean Energy to serve exclusively with renewables are overnight during winter, the analysis found. That differs from current grid reliability risks in California, which are most marked on late summer evenings, and it means winter heating could be one of the most difficult energy uses to electrify as the energy transition advances into hourly supply-demand matching.

"It shows that we need to add a lot more storage and a lot more solar to meet [100% on an hourly basis] because in the wintertime the solar is not producing as much," Pepper said. "If someone has a product that can provide renewable energy during those hours, come talk to us."

Peninsula Clean Energy already is exploring longer-duration energy storage. It was among a group of CCAs that last year signed a 15-year contract for an eight-hour energy storage project relying on lithium-ion batteries. It also has contracts for four-hour energy storage, geothermal, onshore wind and solar.

Under California's community choice model, PG&E Corp. operating arm Pacific Gas and Electric Co. has responsibility for physically providing the CCA's contracted power.

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