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What’s Ailing California’s Electric System?

high voltage signs near electrical facility
High voltage signs are posted on the Department of Water and Power sub station E in the North Hollywood section of Los Angeles on Saturday, Aug. 15, 2020. California ordered rolling power outages for the first time since 2001 as a statewide heat wave strained its electrical system. Photo: AP/Richard Vogel

California made headlines for all the wrong reasons recently with widespread rolling power outages in the middle of a heat wave and a pandemic. These blackouts were not an accident—they were intentionally scheduled by the grid operator, the California Independent System Operator (CAISO), due to a shortage of resources available to keep the lights on.

The California blackouts led to a frenzy of hot takes and finger-pointing based on instant diagnoses of the problems. The situation is like a Rorschach test on which people superimpose their preconceptions about energy. Opponents of renewable energy, including President Donald Trump, blame the outages on California’s use of solar and wind to decarbonize their power supply. Others have jumped to the conclusion that this must be a recurrence of Enron-type market manipulation as in the 2001 energy crisis. Still others have offered silver bullets based on whatever they are selling.

It is important to diagnose the problem correctly so that we don’t administer the wrong medicine. While a full examination should be done, some causes can preliminarily be ruled out. There is no evidence so far that market manipulation was afoot. There is also no evidence that California’s solar and wind generation did not perform as designed. Wholesale markets in other regions of the country are delivering increasing amounts of renewable energy and keeping the lights on.

I think California has four “preexisting conditions” that need to be addressed to avoid this happening again.

1. Lack of clear accountability for having the resources to keep the lights on.

In some regions of the country, electric distribution companies directly invest in power plants under the supervision of state regulators. In others, regional markets use an auction system to buy enough resources to keep the lights on. I personally prefer market structures, but either system can work if it is clear who has the responsibility.

In California, the roles of the CAISO and the state regulators to keep the lights on are quite tangled. CAISO has the job of dispatching power plants but has little authority to ensure they get built. Lining up enough resources is largely under the supervision of state regulators. In other words, the buck stops nowhere. This should be remedied through the actions of the California legislature and the Federal Energy Regulatory Commission, which regulates CAISO.

2. Lack of resources to balance solar and wind power.

California leads the nation in solar generation, and also uses a lot of wind generation. These carbon-free resources help reduce the climate impacts of burning fossil fuels. But unlike conventional power plants, they cannot be turned on and off as needed. By design, their availability depends on the sun and wind at any given moment. They can work well in conjunction with resources that can be turned on as needed, especially in the evening when the sun goes down. These “balancing” resources can be gas-fired plants, pumped water or battery storage, hydroelectric power, or the collective actions of homes and businesses to move their consumption to different times of the day. California does not have enough of these resources. See problem #1—someone needs to be in charge.

3. Closing disfavored resources before opening the new ones.

It is hard to site and build new energy resources, including carbon-free resources, anywhere in the country. Even in regions where there is strong political support for clean energy to fight climate change, it often doesn’t translate to people allowing wind turbines or a high-voltage transmission line to be built anywhere near them.

California has been decisive about what resources it doesn’t want anymore, including many of its gas-fired power plants and its last nuclear power plant. It has been much slower to actually construct resources to take their place. In the past three years, California has closed 5,000 megawatts (MW) of gas generation in anticipation of building 3,000 MW of battery storage that is still on the drawing board. In a heat wave, when every resource is needed, this gap in resources came home to roost.

4. Operating in a silo.

California is a large state, but it is not an island. It is part of a larger region whose resources could help to balance those available in the state, helping both California and the West as a whole. While CAISO and its neighbors have shared resources when they have extra, this does not help when resources are scarce. California would benefit from a regional market that took advantage of different weather, time zones, and resources to keep the lights on at least cost. California legislators have repeatedly considered legislation to change CAISO to allow regional operation, but have preferred in-state control. I believe that decision should be reexamined to take California into the future.

The real cure

When something goes wrong, it is easy to make snap judgments, demonize technologies you don’t like, or suspect foul play. Such false diagnoses about what ails California’s power system only encourage snake oil solutions. Putting in the hard work on big structural issues like the ones I identified is the real cure. California surely does not want to—and should not—back off its climate goals. But it should take a hard look at who is responsible for getting the resources in place to keep the lights on, and then make the tough decisions to do so. Its citizens deserve nothing less.

Cheryl A. LaFleur was a commissioner at the Federal Energy Regulatory Commission from 2010 through 2019, and chaired the commission from 2013-2015 and in 2017. She is currently a distinguished visiting fellow at the Columbia University Center on Global Energy Policy.

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Richard McCann
3 years ago

Unfortunately, this article does exactly what it says NOT to do–jump to a quick diagnoses and offer a pat solution (FERC-directed auctions in this case). In fact, we don’t yet have a complete picture of what went wrong. There’s good evidence that CAISO jumped the gun on ordering blackouts in the first place. And there’s a question of whether California should be planning to avoid outages under such extreme conditions (unprecedented prolonged heat and humidity) given the likely cost. In addition, there was a reasonable solution proposed a year and half ago at the CPUC that the CAISO refused to participate in, and that delayed the procurement of new resources. There’s probably other factors that we haven’t learned about. Suggesting that California should come under FERC jurisdiction during a period when FERC is unwinding the policies needed to fight climate change in other states is a case of either tunnel vision or offering a Trojan horse that will create much more harm than any potential gains.

Craig Lamascus
Craig Lamascus
Reply to  Richard McCann
3 years ago

“question of whether California should be planning to avoid outages under such extreme conditions”….. why is this a question?

That’s a very subtle way to say “get used to being in the dark and having no AC on hot summer evenings”. Eventually, people will have had enough with advocacy such as yours and chose to listen to people who have a more rational and practical approach to electric power. You know, a policy that at least has the goal of keeping the lights on even during extreme conditions.

ziad
ziad
Reply to  Richard McCann
3 years ago

why no rely on Hydro pump storage and Offshore wind?

Gene Nelson, Ph.D.
3 years ago

Nonprofit Intervenor Californians for Green Nuclear Power, Inc. (CGNP)will soon be filing a complaint with FERC to address some of the issues that former Commissioner LaFleur raises in her article. FERC actually can take action to keep the lights on in California. First and foremost, they can order that Diablo Canyon’s voluntary retirement be moved far in the future, even while California’s powerful fossil fuel interests push for Diablo Canyon’s retirement for the purpose of commercial gain.

Richard McCann
Reply to  Gene Nelson, Ph.D.
3 years ago

FERC has no jurisdiction over retiring Diablo Canyon. It would take action by both the NRC and the SWRCB to extend Diablo’s license beyond 2025 and that would require PG&E restarting the now cancelled relicensing process. And it was the environmental groups, renewable developersk, ratepayer groups and CCAs that pushed for closing Diablo–the natural gas generators were only a bit player in the proceeding. Mischaracterizing the situation does not help address the problem.

Duffer
Duffer
Reply to  Richard McCann
3 years ago

You are correct, it is first and foremost PG&E’s decision. Tied to publics environmental consciousness. Looked at that plant on Google recently. It’s a pristine unpopulated part of the coast. Why they built it there was to gain access at a lower cost to the pacific for cooling water. Foolish in the overall scheme of things. Unfortunately, it will be decades before the plant can be dismantled.

Gene Nelson, Ph.D.
Reply to  Richard McCann
3 years ago

Mr. McCann: In summary, you are wrong. Diablo Canyon is a critical “FERC Jurisdictional” generator. As part of California’s bulk electric system,, Diablo Canyon supplies almost 10% of California’s power safely, cost-effectively, and reliably. Solar and wind, which you advocate on behalf of are unreliable and expensive – and less safe than U.S. nuclear power. FERC opened docket EL21-13 in late October, 2020. The reliability concerns that CGNP raises remain under FERC consideration as of February 5, 2021. Furthermore, these reliability concerns are being contested by CGNP before the CPUC in Proceeding R2011003.

Joris van Dorp, MSc
Joris van Dorp, MSc
3 years ago

You are correct that California needs to be opening a lot more fossil fuel plants if it wants to keep the lights on in the future, but this may not be as easy as it sounds, because many Californians have been led to believe that solar panels and wind turbines *substitute* for fossil fuels. Thats why Californians agreed to have their nuclear power plants shut down early: they were promised that these plants would be replaced by renewables, not fossil fuels.

Jay Dickenson
Jay Dickenson
Reply to  Joris van Dorp, MSc
3 years ago

I just reread the article. Nowhere does the author contend California “needs to be opening a lot more fossil fuel plants.”

Duffer
Duffer
Reply to  Jay Dickenson
3 years ago

The direction CA’s utilities are headed is battery storage and a distributed model for supply, which includes businesses and residences. It’s a completely different paradigm and gas plants are being shut down to meet the states mandates, they are not the solution nor are they necessary.

They are tied to the rolling blackouts, because retiring them implies lower cost for the utility. See my post above for details.

Craig Lamascus
Craig Lamascus
3 years ago

Q. What’s ailing California’s Electric System?

A. The sun goes down at night.

Aren’t virtually all of the blackouts on hot summer evenings when solar power production goes offline and the load stays high?

Get some power sources that don’t depend on sun or wind. Or get used to sitting in the dark on hot summer nights with no AC.

Duffer
Duffer
3 years ago

One could write books on this topic. Author makes some excellent points, though all can be debated. In my research into the problem I’d say it’s quite simple, tied a bit to the regulation, but mostly to profits.

Most important is the big three: large Investor owned public utilities, PG&E, SCE, and SDGE. They understand the problem well, have the responsibility for supply agreements and know how to solve it. But they are Investor owned, therefore bottom line profit driven.

Here are the key points to understand why they have chosen not to build / purchase enough excess capacity.

1) They are mandated to shift to green technologies.
2) Though solar and wind are cheap compared to fossil fuel / nuclear solutions, they are not a perfect match for the peaks the State sees on the hottest days of summer, when demand spikes late afternoon do to AC use and solar starts to wain.

3) This means they need something other than renewables to address these peaks.
4) Add to this picture, the price of renewables are rapidly declining and delays of a year or two in adding capacity mean saving billions on cap ex. All due to the rapidly declining cost of solar, wind, and batteries.
5) In particular battery storage, because the cost are dropping 15 to 20% per year and this is what is needed to meet the green mandate by allowing the gas plants to be turned off, and storing solar electricity mid afternoon to feed back to the grid in late afternoon to address the duck curve spikes on hot summer days.
6) The rolling blackout events are infrequent, and happen when imports are not available from other states that are part of the CAISO wholesale market. This only happens during rare 3 to 4 year events where the whole western US is under a heat wave.

The end result, the utility’s work very hard on curtailment programs to lower demand during these peak events through public outreach. They will live with a little negative publicity every few years, or until it gets to a threshold where regulators are pushed by the public to force them to act. And they will do so to maximize profits.

Evidence #1: CAISO has said utilities need to add 4.7 GW of capacity by 2022 to meet demand. The big 3 have plans for 3.3 GW by 2023. The regulators are allowing this to occur because all understand that a few hours of outages for 1 to 2% of customers on 1 or 2 days every few years is livable and it is the best decision for all involved to go green.

Why, because the future model that is in development includes supply from battery storage, including residential storage of V2G and batteries. All tied to automated pricing by smart grid technology. Already exist in small scale today and is just starting to have a significant impact on load balancing across the grid.

This new paradigm completely changes the infrastructure requirements of utilities. And the Utility’s know it.

JAMES CARLYLE
JAMES CARLYLE
3 years ago

As I read this, it assumes for each solution that the State has a functional regulatory group in place to make meaningful decisions. This does not currently exist, as noted. I would address this issue first as a condition to pursuing her other recommendations.

Richard Howard
Richard Howard
3 years ago

Question: in 2001 California did not pay some of the providers of its electricity. Enron clearly didn’t deserve payment, but at least one other provider clearly did. Do you think that this experience caused out of state providers hold back supplies?