Cal-ISO loads start to climb; imports will likely be critical to meet summer demand

While there is likely to be a lasting impact from the coronavirus on the California power market, there is not enough data to model that impact yet, and imports, which already are on the uptick, may be critical late summer because of low hydro conditions, said California Independent System Operator officials.

Loads are now starting to climb heading into the summer season as California, the first state to issue a stay-home order March 19, gave the OK on May 18 to begin the process of gradually reopening businesses, Cal-ISO officials said during the 2020 Summer Assessment Overview stakeholder call Wednesday afternoon.

"The greatest risk is when we're in post solar production hours," said Bob Emmert, Cal-ISO senior manager of interconnection resources, adding that reductions in the gas fleet have not yet been offset by sufficient storage.

That means the ISO must look to other resources to fill the gap, Emmert said, adding he would like to see more storage come online in the region.

Imports from nearby regions will likely become a necessity as power demand rises with the temperatures this summer.

"Adequate imports may be critical in late summer when the impact of below-normal hydro conditions are more pronounced," Emmert said, adding that the increase in air conditioning usage as summer heat rises is what drives California peak demand.

HYDRO AND IMPORTS

California hydropower generation is down 40% year on year so far in May, and hydro's share of the fuel mix has fallen nearly 8 percentage points from a year ago, according to California Independent System Operator data. The Shasta Dam water supply forecast is at 66% of normal for April through July, according to the California Nevada River Forecast Center.

To make up for the lack of hydro generation, Cal-ISO generation imports have increased 24% year on year to average 142,859 MWh/d so far this month, or nearly 26% of market share, an increase of 5 percentage points from a year ago, according to ISO data.

In neighboring Bonneville Power Administration, exports are up 11% year on year so far in May, according to BPA data.

CORONAVIRUS IMPACT

"At this time, there's not enough data to predict the impact to load long term," said Amber Motley, Cal-ISO manager of short-term forecasting.

The ISO is using a backcast analysis rather than a comparison to past years because the current situation is so unusual. The analysis takes the model prior to the coronavirus and reruns it with actual weather conditions to reach the expected load, which is then compared to the actual observed data to create the model error.

While the ISO can't anticipate the impact the stay-home order will have on power demand, it continues to improve its model to better understand the current situation.

From March 23 to May 11, as the state was in lock down status, the ISO observed load reductions of 7.4% on weekday mornings, 5.7% on weekday evenings, 3.8% on weekend mornings, and 1.3% on weekend evenings, Motely said.

Beginning the week of May 4, officials started to see the impact from the virus weaken.

"We're more in an opening up phase now," Motley said, adding the biggest impact to load from the coronavirus is during the morning peak for hours ending 7 to 10, Motley said.

In March and April, the biggest impact to load from the virus was seen during hours ending 7 to 18 and that has tightened to hours ending 7 to 13 in May with more heat days impacting power usage, Motley said.