Monday, November 23, 2020
Nov. 23, 2020

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Report: A combination of factors caused California’s rolling blackouts in August

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A report from three key state groups analyzing what caused a pair of blackouts in mid-August largely conformed to reasons previously cited by California’s grid operator that a combination of factors, including a sweltering heatwave, pushed the state’s power system to its edge, leading to the first statewide outages in nearly 20 years.

“The extreme heat storm in August was an extraordinary 1-in-35-year event that, with climate change, is unfortunately becoming more common,” Marybel Batjer, president of the California Public Utilities Commission, said in a statement.

After two straight days of rotating outages on Aug. 14 and 15, Gov. Gavin Newsom ordered the utilities commission, the California Energy Commission and the California Independent System Operator to deliver a preliminary root-cause analysis.

The system operator, a nonprofit known as the CAISO for short, manages the electric grid for about 80% of California. The energy commission’s duties include advancing California’s energy policy while the public utilities commission’s job includes setting reliability requirements.

On Aug. 14, 491,600 electricity customers of California’s three big investor-owned utilities San Diego Gas & Electric, Southern California Edison and Pacific Gas & Electric lost power between 6:30 p.m. and 7 p.m. for anywhere between 15 minutes to 2 1/2 hours.

The next evening 321,000 customers statewide were cut off, with downtimes ranging from eight to 90 minutes.

If not for emergency measures that brought in extra energy sources and everyday consumers consciously reducing their electricity demand, there would have been more blackouts Aug. 17-19. Another heatwave over the Labor Day weekend nearly led to the CAISO initiating other rounds of rotating outages.

The rolling blackouts in August were the first in the state since the California energy crisis in 2001, which led to the ousting of then-Gov. Gray Davis.

What happened

The 121-page report released Tuesday said there was “no single root cause of the outages, but rather, a series of factors that all contributed to the emergency.”

A stubborn heatwave led to California experiencing four of the five hottest August days since 1985. Death Valley recorded a 130-degree high on Aug. 16. The heat led to customers across the state to crank up their air conditioners, putting demand on the grid.

In addition, extreme heat caused some power sources such as natural gas plants to run less efficiently, reducing output.

Normally, California imports power from neighboring states to help make up the difference but the August “heat storm” also settled over states across the West and they held on to their resources instead of sending them to the Golden State. In addition, the report said a major transmission line in the Pacific Northwest was down due to weather.

If it’s not as hot in the early evening as it is in the afternoon, why did the blackouts on Aug. 14 and 15 occur at that time?

During the day, California has plenty of solar energy production. But the report said August’s “heat storm” kept customers running their air conditioners well into the evening hours. That posed problems because solar production quickly dissipates as the sun sets and grid operators have to find other sources to replace it in real-time to keep the system operating smoothly.

On Aug. 14, demand on the system hit its peak of 46,802 megawatts at 4:56 p.m.

In the past, operators worked on the principle that if you had enough capacity to meet “peak demand,” there would be enough to cover all the other hours of the day.

But with an increase in solar penetration in recent years, the report said this is no longer the case. The bigger challenge for grid managers comes later when demand is not at its peak but is still relatively high and solar generation drops dramatically what is called “net demand peak.”

On Aug. 14, the net peak demand of 42,237 megawatts occurred at 6:51 p.m. almost two hours later than peak demand when solar and wind generation decreased by more than 5,400 megawatts in the same time period.

The report also brought up another reason: Some of the day-ahead energy market mechanisms put in place by the CAISO to meet supply and demand appear to have actually exacerbated the problem.

Coordinators with the various “load-serving entities” an industry term for energy providers such as utilities and private companies that supply electricity load under-scheduled their demand for energy by about 3,400 megawatts on Aug. 14 and 15.

That did not reflect the actual need on the system and skewed the energy market. That led to a program designed to steady electricity prices called “convergence bidding” to signal that exports were available when in fact California needed every megawatt it could hold onto during the heatwave.

The report did not specify which entities under-scheduled demand and how many megawatts were lost. CAISO officials said they noticed the problem on Aug. 16 temporarily suspended convergence bidding the following day.

The grid operator said it has seen no evidence so far of market manipulation, unlike in 2000 and 2001 when energy traders, including those at Enron, spiked prices that led to shortages and rolling blackouts in California.

Other items that contributed to this year’s outages, the report said, included a drop in production from large hydroelectric dams because of a dry winter and issues with a pair of natural gas plants.

At 2:57 p.m. on Aug. 14, problems at the Blythe Energy Center in Riverside County knocked 475 megawatts of power offline. The next day, a miscommunication between the CAISO and the Panoche Energy Center in Fresno County led to the unintentional ramp-down of 248 megawatts at 6:13 p.m., just 15 minutes before the grid operator ordered the rotating outages.

What the state plans to do now

The report said the construction of new sources of generation can help alleviate problems in the near-term. By next summer, about 2,100 megawatts of clean-energy storage and 300 megawatts of solar and wind resources will be added. The CPUC will track the projects to reduce the risk of delays.

“Our planning processes may have been a year or two off on when we needed to have the resources available,” Ed Randolph, director of the CPUC’s energy division, told the Los Angeles Times. “We’ll absolutely need more steel in the ground.”

The CAISO pledged to “adjust market processes” to ensure energy exports don’t leave the state when the system is constrained.

Energy officials also promised to increase reliability requirements and update reserve margins to take into account extreme heatwaves.

Looking beyond 2021, the report mentioned developing new resources that can ensure reliability during all hours of the year, including the “net demand peak” period.

Reducing stress on the grid can also be shaped by “time-of-use” pricing for utility customers a program in which prices are lower during the day when solar and other sources on the grid are abundant but more expensive during the 4 p.m. to 9 p.m. hours when solar drops off the system.

The CPUC has directed the state’s big power companies to implement time-of-use pricing plans. SDG&E has already implemented it while Southern California Edison and PG&E will start migrating their customers to the program next year.

Changes on the grid are crucial because California has committed to derive 100% of its electricity from carbon-free sources by 2045. Following the blackouts and slew of wildfires blistering the state this summer, Newsom signed an executive order last month requiring that by 2035, all new cars and passenger trucks sold in California be zero-emission vehicles.

In addition, the state’s last operating nuclear power plant goes offline starting in 2024. The 2,240-megawatt Diablo Canyon nuclear power plant near San Luis Obispo by itself accounted for 8% of California’s in-state electricity generation last year.

The CPUC’s Batjer said the three organizations who wrote the report “will absolutely adjust our planning, procurement, and market policies to meet these changing circumstances and ensure our energy future is clean, reliable, and affordable for all Californians.”

Gary Ackerman, a utilities and energy consultant with more than four decades of experience in power issues affecting states in the West, said the analysis included “a lot of political hand-waving” that is, something that appears to be consequential but really is not.

Ackerman said the report’s “three general categories of ‘fault’ point to a lot of work that must be done by all three agencies that authored the piece and I wonder how much any of those recommendations will be or can be put in place by next summer.”

The CPUC, the energy commission and the CAISO will submit a final report to the governor at the end of this year.

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