US West braces for another heat wave; notices issued to lessen stress on grid

Houston — Electric customers across California are being asked to conserve power during the Labor Day weekend to prevent a repeat of the forced power outages that occurred during a nearly week-long August heat wave.

Prolonged above-normal temperatures can put extreme stress on the electric grid to meet the demand surge. Most of California and parts of Nevada and Arizona are under an excessive heat watch through Tuesday with temperatures forecast as high as 125 degrees Fahrenheit, according to the US National Weather Service.

"Conservation is always welcome in a situation like this because we don't know. There are many moving parts," John Phipps, California Independent System Operator director of real-time operations, said during a media briefing Sept. 3. "The more cushion between where we need to be, the better, and conservation helps us with that."

Cal-ISO forecast peakload to jump more than 8% day on day to around 44.3 GW Sept. 5 with peakload then expected at about 44.57 GW Sept. 6 and 43.34 GW Sept. 7. In comparison, peakload reached 46.8 GW Aug. 14 and 44.96 GW Aug. 15 before reaching a year-to-date high of 47.12 GW Aug. 18 during last month's heat wave.

The all-time peakload record is 50.27 GW reached July 24, 2006.

No system outages are expected over the weekend given current load projections, said Morris Greenberg, S&P Global Platts senior manager of North American power analytics, adding that it helps that this is happening over a holiday weekend when demand is typically lower. However, forecasts could change, and there is also the possibility for local outages due to transmission fire risk.

"The impact of fire-related outages would likely be increased at higher load levels," Greenberg said.

Energy transition argument

The wind forecast is weak through Sept. 6, averaging about 2.78 GW and then increasing to around 4.4 GW Sept. 7, while solar output is dropping off faster at this time of year, Greenberg said. The solar forecast averages 9.88 GW Sept. 5-7, according to ISO data. In comparison, wind averaged 3.2 GW in August, while solar averaged 10.2 GW, according to Cal-ISO data.

However, the renewables build out as part of the energy transition in the state is not to blame for tight supplies during heat waves, said Surya Panditi, CEO of Enel X North America.

"The root cause is really around our lack of progress in fighting climate change," Panditi said, adding advances in technology have helped solar and wind forecasts be more accurate.

Ironically, it was natural gas-fired power plants that suddenly went offline during the August heat wave and contributed to the need for rotating outages to maintain grid stability, Panditi said.

"I think there has been a strong wake up call for all parties involved," Panditi said about the need to change the current resource adequacy program in California.

Enel X North America, combined with other energy companies, worked with commercial and industrial customers at thousands of sites to curtail up to 200 MW during the August heat wave and were part of conservation efforts that prevented power outages Aug. 16-19, Panditi said.

Demand response like that, coupled with distributed energy resources such as storage combined with renewables and the participation of electric vehicles through curtailments and injecting power back onto the grid, is how Panditi sees the future of the power grid.

"I do think the future needs to have a couple different elements," Panditi said, adding Enel X has the software, employee knowledge and operational capacity to reach that future.

Several notices issued

Cal-ISO issued statewide flex alert from 3-9 pm PT Sept. 5-7 due to excessive heat. A flex alert is a call to voluntarily conserve electricity when there is a predicted shortage of energy supply, especially if the grid operator needs to dip into reserves to cover demand.

The ISO also declared restricted maintenance operations from 6 am PT Sept. 5 to 10 pm Sept. 6, which requires generators and transmission operators to postpone planned outages for routine equipment maintenance to ensure all grid assets are available for use.

In addition, the grid operator is seeking any available capacity through its Capacity Procurement Mechanism.

The ISO may suspend convergence bidding again to avoid having a lot of virtual supply clear, Greenberg said, which it did for several days during the August heat wave.

The Sacramento Municipal Utility District is asking customers to limit the use of household appliances and to raise thermostats to 80 degree Fahrenheit during the hours of 3-9 pm PT, according to a news release from the electric service provider.

"High temperatures, especially over consecutive days, can drive increased air-conditioning needs, which can result in higher customer usage and energy bills," according to SMUD. "Heat wave weather can also stress the electric grid."

SMUD has enough power resources to meet demand, barring a regional or state grid emergency, but has additional crews available to quickly restore power in the event of unplanned power outages.

In the Pacific Northwest, the Bonneville Power Administration requested a "no touch" order for the Columbia nuclear generation plant again this month due to increased demand for electricity due to high temperatures, according to an Energy Northwest news release. The order limits any maintenance activity that would either require a reduction in power or pose a risk to sustaining 100% generation.

Spot prices climbed

Cal-ISO spot prices climbed in reaction to spiking demand and rising temperatures.

SP15 on-peak day-ahead for Sept. 5 traded in the $330s/MWh on the Intercontinental Exchange during Sept. 3 trading, a jump of 315% day on day. On-peak weekend for Sept. 6 traded around $450/MWh, while off-peak for Sept. 5-6 traded above $215/MWh, and off-peak for Sept. 7 was bid at $95/MWh and offered at $175/MWh.

SP15 on-peak day-ahead locational marginal prices set a record high of $697.91/MWh Aug. 18.

NP15 on-peak day-ahead for Sept. 5 traded around $175/MWh on ICE, a jump of 169% day on day, as on-peak weekend for Sept. 6 traded in the $220s/MWh. NP15 on-peak for Sept. 7 traded around $175/MWh on ICE, with off-peak bid at $50/MWh and offered at $120/MWh.

Palo Verde on-peak for Sept. 7 was bid at $100/MWh and offered at $300/MWh on ICE. Palo Verde on-peak set a record high of $1,643.25/MWh Aug. 19.

August heat wave

Cal-ISO forced power outages Aug. 14 and 15, the first time since 2001, when demand surpassed available resources.

Gov. Gavin Newsom proclaimed a state of emergency following the outages and sent a letter Aug. 17 to Cal-ISO, California Energy Commission and the California Public Utilities Commission seeking details on what led to the outages.

Cal-ISO was on restricted maintenance operations from Aug. 14-21 due to the heat wave and again Aug. 24-25 due to weather uncertainty from wildfires. The ISO also issued numerous flex alerts and entered stage 2 and 3 emergency status after the loss of gas and wind generation left more demand than available resources.

In addition, the ISO solicited any available capacity using its CPM authority in order to address system needs caused by the current heat wave.