Solar shines on US heat wave, near-record peakload

The California Independent System Operator was expected to break a more than decade-long peakload record September 1 as a heat wave sat over the region. However, the ISO never had to enter emergency stages and prices were half of what they were back in 2006 when the record was set, even as demand continued to rise.

We saw how the ISO handled its generation stack during the recent solar eclipse, keeping the lights on as solar generation dropped off the grid and then surged back.

It appears the addition of solar generation to the Cal-ISO grid also made a difference September 1, as rising temperatures pushed up power demand earlier this month, threatening to break the longest standing ISO peakload record in the US.

That July 24, 2006, record remains intact at 50,270 MW, despite a forecast that showed demand on September 1 surpassing it. Demand peaked at 50,116 MW, 887 MW below the forecast level, coming within 154 MW of the all-time peakload record.

A look back

In July 2006, Cal-ISO experienced a heat wave with temperatures as high as 119 degrees in Woodland Hills, which pushed up day-ahead prices near $400/MWh and caused the ISO to issue restricted maintenance operations notices and two stages of emergency notifications.

Here’s what all that means:

• A restricted maintenance operations notice requires transmission and generator operators to postpone planned routine maintenance outages until further notice, according to the ISO. This ensures that all available grid assets are available to manage grid reliability during challenging grid conditions, such as heat waves.
• A Stage One Emergency is a strong request for conservation as “operating reserve shortfalls exist or are forecast to occur, and available resources are insufficient to maintain the operating reserve requirement,” according to the ISO.
• A Stage Two Emergency requires ISO intervention in the market as “non-spinning reserve requirement cannot be maintained,” according to the ISO.

Cal-ISO set its peakload record on July 24, 2006, breaking a record set just days earlier, even after calling for conservation of electricity usage and entering emergency stages.

SP15 on-peak day-ahead spiked to $363.74/MWh and NP15 jumped up to $356.42/MWh. Bilateral day-ahead prices have not reached those levels since.

What used to be

The Cal-ISO fuel mix was a little different on July 24, 2006, than what it is today.

While thermal generation was the main fuel source at 42.6% of the Cal-ISO resource breakdown – like today – solar generation was nonexistent. Renewables consisted of hydro at 14% of the fuel mix and wind at less than 1%.

Qualifying facilities made up 9.9% of the resource breakdown, while peaker plants were at 4.3%.

“If you combine the QF and thermal layers … I believe the reliance on internal thermal generation was much higher then,” said Morris Greenberg, managing director of gas and power modeling at PIRA Energy Group, a unit of S&P Global Platts. “The resource mix has changed with replacement older steam capacity with more efficient peaking capacity.”

The current state of Cal-ISO

Looking at September 1, demand was forecast to surpass the record with temperatures reaching as high as 107 in Sacramento.

However, Cal-ISO never entered emergency stages even as demand climbed to the highest level in years (but did not break the record).

SP15 and NP15 on-peak day-ahead prices reached into the $170s/MWh, the highest since 2007 for SP15 and 2014 for NP15.

The ISO did issue restricted maintenance operations notices and flex alerts, which are part of an educational and alert program that informs consumers about how and when to conserve electricity during heat waves and other challenging grid conditions.

One major difference is the surge of solar generation on the Cal-ISO grid in recent years.

A look on the bright side

“The growth in solar generation in California contributed to meeting the recent peak and shifted the net load peak later in the day when demand was lower and supplies from outside of California were higher,” Greenberg said.

Solar generation totaled 82,637 MWh on September 1, or 8.8% of the Cal-ISO fuel mix, compared with nothing in 2006.

In the last four years alone, about 2,000 MW of solar generation has been added to the Cal-ISO system each year.

Cal-ISO has roughly 10,000 MW of solar, which makes up nearly half of its renewables portfolio. Renewables in general make up roughly 40% of Cal-ISO’s total installed capacity, the most of any US grid operator. Cal-ISO leads the country in solar output.

Thermal power generation remains the main fuel source at 45.6% of Cal-ISO’s fuel mix, slightly above the 2006 level.

All about that gas

Another big difference had to do with natural gas, especially as the ISO relied on gas even more so in 2006.

Spot gas at Southern California Gas city-gates was $3.495/MMBtu for September 1 delivery, 40% below where it was on July 24, 2006, at $5.82/MMBtu. SoCal spot gas averaged $5.86/MMBtu in July 2006, nearly double the current month-to-date average of $2.950/MMBtu.