CAISO credits additions, new programs with maintaining power reliability in US heat wave

The California Independent System Operator attributes the grid's reliability during the 10-day September heat wave that set an all-time peakload record to additional capacity, new state programs, enhanced collaboration and customer conservation, according to a recently released analysis of the event.

Imported electricity from neighboring balancing authorities and market enhancements made since August 2020 also played key roles in maintaining reliability, according to a CAISO statement Nov. 2 on the analysis.

"I think the fact that we all worked collectively together, both in California and across the West, to get through the September heating event -- I think it was a real validation of a lot of hard work here in the last couple years," CAISO President and CEO Elliot Mainzer said Oct. 31 during an interview with S&P Global Commodity Insights. "I think it really demonstrated our interconnectedness. We were able to simultaneously maintain reliability in California, and we also provided support to adjacent states -- we were able to maintain our wheel throughs to Nevada; we were able to provide energy to other parts of the West that were struggling during the heat."

Record event

The ISO issued Flex Alerts calling for voluntary consumer conservation for a record 10 consecutive days -- Aug. 31 through Sept. 9. Consumers responded to the flex alerts, conserving as much as 1.5 GW Sept. 6, the biggest single-day response, according to the analysis.

CAISO set a new all-time peakload record of 52.061 GW Sept. 6 when record temperatures were reached all over California and the West. Peakload broke a 16-year record of 50.27 GW reached on July 24, 2006.

Record high prices were reached at NP15, John Day and NOB, while many other locations climbed to one- and two-year highs. NP15 on-peak day-ahead locational marginal prices reached $375.87/MWh Sept. 7, according to California Independent System Operator data. John Day and NOB on-peak day-ahead reached $555/MWh and $750/MWh, respectively, according to S&P Global Commodity Insights pricing data.

CAISO credited regional cooperation with maintaining reliability, because, as the peakload record was reached, about 6.5 GW of net energy imports from neighboring energy providers and balancing authorities was available to the grid. Another 1 GW of energy was transferred to the grid via the Western Energy Imbalance Market, a real-time market with participants throughout the western US.

"Considering how extreme system conditions were including drought impact on hydro capacity, it is remarkable that the ISO was able to avoid firm load curtailments," said Morris Greenberg, senior manager for North American power analytics with S&P Global. "Clearly, every source of incremental supply (including voluntary conservation) was critical in achieving this objective. I'm impressed with how quickly they identified and moved to fix operational problems."

The August 2020 outages likely focused attention on resource adequacy and system operations, reducing the likelihood of outages in this more extreme event, Greenberg added.

Capacity additions

Since the beginning of 2021, CAISO has added roughly 9.5 GW of new capacity, with over half of that from batteries, followed by about 3.8 GW of wind and 750 MW of wind.

Specific factors that supported reliability cited in the report included:

• increased resource adequacy procurement since 2020, including 3.5 GW battery storage;
• improved coordination and communications with California utilities and state agencies;
• market enhancements put in place in the past two years;
• use of new state programs to provide non-market resources;
• close coordination with load-serving entities; and,
• emergency assistance energy flowing into and out of the ISO grid.

"It also demonstrated the fact that load flexibility is an important part of our future," Mainzer said. "It's great to have that event behind us with a successful resolution. Right now, it's all hands on deck getting ready for next summer and beyond."

Market enhancements needed

Some software changes identified in the report have already been completed. The report cited needed market enhancements to improve how increasingly frequent, extreme and long heat events are managed, including the clearing of energy exports in the market and real-time testing for resource sufficiency.

"Expanding the role of demand response, including the vehicle-to-grid supply," Greenberg said about what more can be done to ensure reliability. "Also, as resource mix shifts to reliance on storage, providing price incentives for optimal charging and discharging will become even more important."

A stakeholder call is scheduled for Nov. 17 to review details of the analysis and answer stakeholder questions.