Morro Bay, part 1
the offshore wind auctions are just the beginning
Friends - Happy Father’s Day! I’m at an age when Father’s Day can mean snarky gifts from teenagers, like this mug received last year. (Maneki-neko was also a gift from my kids, but not for Father’s Day.)
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A warm welcome to new subscribers - thanks for joining! By way of introduction, in this newsletter I generally cover themes related to my instruction:
Strategy for the Networked Economy
Clusters: Locations, Ecosystems and Opportunity
Business in Japan
Competitive Strategy
With the occasional foray off topic thrown in. Thanks for being here! I look forward to your feedback.
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On to our post! With my undergrad strategy students I like to introduce three sites in California that epitomize our energy transition: Moss Landing, Morro Bay, and Diablo Canyon. I like to pair this with a role-playing exercise, in which students advocate in behalf of interest groups, such the tourism industry, or seniors, or the utility sector.
Moss Landing may be familiar to drivers of Route 1 - on your way, say, to Monterey, suddenly twin dark stacks loom on the horizon, surreally large and imposing like something out of The Lorax or The Two Towers. They were built by Bechtel for PG&E in the 1950s. At its closure, the Moss Landing Power Plant provided power for 1.1M households from natural gas.
Now, the stacks are home to the world’s biggest battery energy storage facility.
Surplus solar stored during the day can be delivered in the evening, as energy use ramps up, as depicted in the duck curve below.
The ability to store electricity is a profound change from when I moved to California, in 1999.
I happened to move to Oakland from Chicago during a sweltering week in Chicago. I had no AC as I packed up my belongings to move to California. This was, of course, just in time to experience the 2000 power crisis in California. The smart guys in the room gamed what was then true about electricity - it couldn’t be stored. Partial deregulation combined with electricity’s then non-storable nature enabled manipulation of the market on wholesale power from peaker plants. Now, thanks to advances in storage, electricity use can be time-shifted from when the electricity is generated.
So that’s View #1.
View #3 (in the order introduced in class) is Diablo Canyon, on the Central Coast, home to California’s last operating nuclear plant.
California SB 846, passed in fall 2022, extended operation of the two Diablo Canyon units to 2029 and 2030, respectively. Why extend operation of a nuclear plant next to a fault line (discovered in 2008)? Diablo Canyon provides about 8% of California’s electricity, at a lower cost kw/h than other sources and with fewer externalities - from intermittency to carbon - than alternatives. Rephrased, reconstructing that same 8% with other sources would likely cost more; would probably produce more carbon; and would potentially rely on more intermittent power sources (e.g., solar or wind) than an already operating, amortized nuclear plant that provides consistent base load power.
Your California power mix, 2001-2020. EIA, 2021
Some good news - even as California’s population grew by 6 million from 2000-2020, total power consumed has shrunk from its peak in 2007, and is back to around 2000 levels.
View #2 is Morro Bay, home to the surreally large Morro Rock, one of the Nine Sisters, and also to the three 450-foot stacks of the former Morro Bay Power Plant.
Like Moss Landing, it was built for PG&E in the 1950s. Unlike Moss Landing, it has not - yet - become an energy storage facility. Use of the facility for a 600 MW battery energy storage has been proposed (and assessed, at least from a historical resource perspective). The same operator as Moss Landing, Vistra Energy, would pay for removal of the stacks (which cost the town $1M/year to maintain), and get the facility. Though, there has been some local pushback against the idea.
Morro Bay was in the news in December 2022, with the results of the first offshore wind auction on the West Coast. Five sites were auctioned; two off of Humboldt Bay, and three off of Morro Bay.
Thus, the energy stored in a future battery storage facility in the town of Morro Bay could potentially come from energy generated by offshore wind off the Central Coast. Conveniently, offshore wind ramps up just as solar is winding down. Thus, offshore wind, particularly if in combination with energy storage, could mitigate the effects of the above duck curve.
There are, of course, a lot of things that need to happen for that to come to fruition. For starters, the sites would be *floating* offshore wind, which is still nascent as a category on a worldwide basis, not just on the West Coast. More to come on that in a subsequent post. In the meantime, this view of Morro Bay from a visit earlier this month.
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As mentioned in my last post, on Wednesday June 21 at noon PT I will moderate a Zoom program with author and researcher James Wright, author of the recent Robots Won’t Save Japan. Wright conducted ethnographic research at senior care facilities in Japan on the adoption of caregiving robots. His thesis is captured in the book’s title. Hope to see you there!
Onward and upward,
Jon