As solar eclipse darkens the US, grid operators have a plan

JPMorgan’s Anton Pil and Generate Capital’s Jigar Shah say Monday’s solar eclipse will show a US grid ready for more renewables.

As Monday’s solar eclipse looms over the US, clean energy investors don’t seem too worried about a loss of production.

The celestial phenomenon is predicted to carve a path from the Pacific Northwest to the south-east of the country. It will completely block sunlight through a total of 14 states, cutting solar generation potential across the country by at least 50 percent, according to solar forecasts from MDA Information Systems. Almost all plants will be partially obscured.

“There are around 1,900 utility-scale solar generation plants in the US with approximately 23GW of capacity. Seventeen of those plants – 0.3 percent of the total capacity – are in the path of totality, so for three minutes or so, they will not generate any electricity. But almost all of the solar plants in the US will be partially obscured, so will generate 20-90 percent less than the usual on Monday,” Anton Pil, JPMorgan Asset Management’s global co-head of alternatives, told Infrastructure Investor.

But despite the widespread loss of solar power, investors and solar operators say effects on power grids will be minimal. If anything, the eclipse is an opportunity to show how well prepared solar systems are to respond to rapid shifts in production.

“Utility companies have planned by ramping up natural gas, load control, etc,” Jigar Shah, Generate Capital co-founder and former SunEdison chief executive, told Infrastructure Investor. “What this event highlights is just how prepared we are at the grid operator level for high penetration of renewable energy.”

For example, Duke Energy said North Carolina, which has the country’s second-highest solar capacity behind California, is expecting a drop in solar output from 2.5GW to 0.2GW during peak eclipse time. The utility said that “operators will have natural gas plants ready to step in during the eclipse”.

Utilities in California, which has 18GW of installed solar capacity, are not sounding the alarm, either. San Diego Gas and Electric said the sun will be 60 percent obscured over San Diego on Monday, resulting in a loss of 500MW. Caroline Winn, the utility’s chief operating officer, said customers should be reassured that “we have secured enough resources to meet their energy needs”.

Pil argued the “forecastability” of solar has allowed for operators to prepare well ahead of today’s event. “While wind forecasting relies on many factors including the local topography, availability of sunlight basically relies on cloud cover forecasts – and of course solar eclipses.”

He concluded: “As institutional allocations to private infrastructure continue to grow, with investors seeking diversifying investments that can provide stable, forecastable cashflows, the outlook for power generation assets looks relatively sunny.”