PG&E looks at compressed air to meet RPS target

San Francisco-based utility Pacific Gas & Electric (NYSE:PCG) says new innovation, including technologies such as compressed air, could help it meet California's renewable portfolio standard (RPS) of 20 percent of its electric portfolio to come from renewables in 2010.

PG&E’s Fong Wan, senior vice president, energy procurement, said at this week's Dow Jones Alternative Energy Innovations conference in Redwood City, Calif., that the company is at 14 percent, but still needs to add 16,000 gigawatts to meet the goal.

He also said California carries about a 15 to 20 percent reserve margin—to moderate the supply load throughout the day and ensure technology from renewables is intermittent rather than dispatchable.

RPSes exist in many U.S. states and the District of Columbia and require a specified amount of total power generation to be bought by utilities from renewable sources. The quantity of power that needs to be produced from renewable sources and the date by which that needs to occur varies from state to state (see Electric-bill increases go hand in hand with RPS targets).

The California utility has said before it expects to meet its RPS target, but some renewable sources may not come online by the 2010 deadline (see PG&E to meet renewable energy requirements - sort of). For example, Western Geopower, a geothermal plant operator, terminated its contract to sell 25.5 megawatts of geothermal power to the utility.

PG&E has been focused on building up its hydro facilities, pump storage, and clean gas burning plants, Wan said. With pump storage, water is pumped to an upper lake in the middle of the night, and then released to a lower lake in the middle of the day in a controlled manner.

The utility is also working to bring in new technologies to meet intermittencies of solar and wind.

“Storage is one of the most important changes that we are going to need in the next coming decade,” he said.

PG&E is exploring more than 2,000 MW of new storage, but what Wan is most excited about is compressed air. PG&E is currently exploring a U.S. Department of Energy grant to squeeze air underground. High pressure air could then be released to generate electricity during the middle of the day.

Companies working in the space include Boston-based General Compression, which is working to compress and store air to power generators when the wind is still (see General Compression aims to double wind farm profits).

In May, PG&E also signed seven deals with Oakland, Calif.'s BrightSource Energy for solar thermal projects totaling 1.31 GW (see PG&E upgrades BrightSource deal to 1.3GW). The deal was inclusive of five previously announced solar thermal projects totaling 900 MW (see PG&E to get 900 MW of solar thermal from BrightSource).

Wan highlighted the process PG&E went through to evaluate BrightSource's technology, before picking them. He said solar thermal energy is an especially attractive renewable power source because it is available when needed most in California—during the peak mid-day summer period.

But he said it also hasn’t been done up to the level BrightSource wants to achieve.

“As to whether they can scale it up to hundreds of thousands of megawatts, that remains to be seen,” Wan said.

Wan said PG&E hasn’t seen any successful battery technologies that could work at the wholesale level. He also said PG&E doesn’t think it can come up with the technologies itself, and that's not part of its plan.

“We see ourselves as the enabler for your technology and your success,” he said, to companies in the audience.

He pointed out that more companies will bring competition to the marketplace that will ultimately help to lower prices.

However, one of those technologies has backfired a bit. The company has come under criticism for its smart meter deployments in Bakersfield, Calif. and the San Francisco Bay Area. The meters send power consumption information wirelessly to PG&E and prevent the need for meter reading. Customers have reportedly been complaining that the devices are actually costing them more on their bills, rather than less.

PG&E has cited weather and other anomalies, saying that the smart meters are expected to bring down electricity bills in the long run.

Steve Westly, managing partner of the Westly Group, made light of the PG&E metering issue today at VentureBeat's GreenBeat 2009 conference.

"Any time you come out with something new, everyone on the planet comes out and complains," he said.

He suggested PG&E and others will make some mistakes, but the public will get beyond it. He said people are "hard wired," and want to know where their money is being spent and have control over it.

PG&E’s ultimate strategy is to make real-time capturing and usage of energy available to its customers and accessible over the Internet, Wan said.

“We absolutely stand behind smart meters,” Wan said. “We believe the technology is sound.”

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