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As heat returns, California seeks more power, conservation to avoid blackouts

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Essential Energy Insights - January 2021


As heat returns, California seeks more power, conservation to avoid blackouts

With another heatwave expected to hit California and neighboring western states over Labor Day weekend, the California ISO is taking precautions to prevent more rolling blackouts as demand for power spikes, including requesting statewide conservation measures and tapping additional generating capacity across the West.

The transmission grid operator for most of California and a slice of Nevada on Sept. 3 asked residents and businesses to conserve electricity use between 3 p.m. and 9 p.m. from Sept. 5-7. The state's first rotating outages in two decades occurred on Aug. 14 and Aug. 15 when early evening peak demand proved too much to handle for CAISO. In subsequent days, dramatic demand reduction across the state staved off additional blackouts.

Because the next heatwave does not appear to be as extreme as the last, the grid operator currently is not forecasting blackouts this time around, an ISO official said. But that could change.

"As we get closer and closer to each day we will know more about the accuracy of our forecasts," Eric Schmitt, CAISO’s vice president of operations, said during a media briefing.

Capacity call

Also on Sept. 3, the grid operator issued a solicitation notice for "any available capacity the ISO can procure under its Capacity Procurement Mechanism," or CPM. The CPM enables CAISO to acquire generation capacity to maintain grid reliability if utilities and other load-serving entities fail to meet resource adequacy requirements or if unexpected conditions create a need for additional capacity, according to the grid operator.

The solicitation seeks both in-state resources and out-of-state capacity that can be imported to the CAISO.

One of the reasons grid operators cited for the August blackouts was lack of import capacity because the heatwave affected much of the Western U.S. Additional imports may be available over the Labor Day weekend, officials said.

The grid operator, in another Sept. 3 notice, cautioned market participants against "under-scheduling of load in the day-ahead market during constrained conditions" because such forecasts can affect the real-time market and "the ISO's ability to serve actual demand."

A grid official stopped short of attributing the practice to market manipulation, which some market observers believe may have contributed to the August blackouts. But the ISO will explore the question of "bad actors versus just inaccuracies in forecasting" in an ongoing root-cause analysis of the outages, according to Mark Rothleder, CAISO's vice president of market policy and performance.

'More work to do'

California's continued capacity crunch comes as the state conducts a sweeping review of its strategy for securing grid reliability as the state transitions to higher percentages of variable renewable power and battery storage while phasing out fossil fuel-fired generation.

On Sept. 1, a state agency approved extended operating lives for four aging natural gas plants in Southern California for one to three years as developers seek to add at least an additional 3,300 MW of resources, mostly energy storage.

"They thought they needed to do this, really, to offset the declining contribution of incremental solar resources" at day's end, Steve Piper, energy research director at S&P Global Market Intelligence, said during a Sept. 3 presentation. "As you add more solar you are having less impact on the net peak demand as it shifts later in the day."

While S&P Global Market Intelligence's reserve margin forecast for California indicates a sufficient capacity cushion, at or above 15% over the next decade, "events this past summer indicate that CAISO may have more work to do," Piper said.