California and Load Management in the Age of Renewables

Northern California power consumers are not out of the woods yet. Last week, PG&E cut electricity to around 31,000 households and businesses across NorCal. In mid-October, the trifecta of dryness, heat, and high winds put the region at risk for more fires. Following a summer of unparalleled land loss, the embattled utility was left with no choice. 

Obviously, this latest round of power disconnections has little to do with load management and everything to do with disaster mitigation. However, to the customer there is little difference between rolling blackouts because of supply and demand mismatches and the outages employed to prevent fires. At the end of the day, their homes or businesses don't have light. And while almost all of California's outages this summer fell into the risk management category, PG&E walked a thin line when it came to load management. 

Save some land management innovation in the West, the risk of wildfires is almost certain to force utilities in the region to cut power for many summers to come. The big question for utilities, however, is whether they’ll be able to keep up with increasing demand while hitting carbon cutting goals. 

The Golden State’s summer and fall really should have taught us not to underestimate the consumption potential of residential customers. Until now, market-based demand response programs in the industry have generally focused on commercial consumers. It’s pretty intuitive: Commercial operations just consume much more power—or so we thought. Whether due to COVID-19 and the swarms of people it’s forced to work from home, or some other trend I’m unaware of, CAISO ended up having to focus their load management efforts on households to keep up with demand. The operator escaped by the thin or its teeth using limited tools like flex alerts. Although residential consumption is likely to decline as the world opens up next year, many workers, especially in affluent places like the wine country of California, will stay remote. Moving forward, utilities and operators will want to improve residential response programs. 

However, there’s a deeper root cause CAISO faced this year, and it's something other regions are setting themselves up to contend with too. When consumption shot up in California, the operator struggled to meet demand with the slew of unscalable renewables available to it. 

California has very ambitious clean energy targets, shooting for 100% carbon-free power by 2045. Over the past decade, the state has loaded up on renewables, which has drawn praise from the usual suspects—well intentioned but ignorant commentators who don’t really understand how the grid works. CAISO was left scrambling for extra generation as demand soared this summer, and their renewable sources didn’t always come through. Batteries will improve and mitigate this problem, but not fast enough. 

Despite the problems we saw in California this year, progressive states around the country are pushing ahead with plans to replace scalable energy sources with renewables. Take New York, for example. This past Thursday, the New York Public Service Commission expanded the state’s Clean Energy Standard, allowing for greater renewable use in NYC and paving the way for further wind growth. This latest development is part of last year’s much publicized Climate Leadership Protection Act, which pledges to reduce the state’s carbon emissions by 40 percent by 2030 and 85 percent by 2050.

At the same time as legislators are pushing to get their states to 100% renewables, the private sector is trading in gas powered vehicles for electric ones. All the big truck companies are developing and hyping up electric models, the most recent being the Kenworth T680E. Amazon, with the stated goal of being carbon free by 2040, is gearing up to phase in electric delivery vans in 2021. How will states without access to deep scalable energy sources be able to keep up with the demand created by hoards of electric amazon delivery trucks and the likes? 

The situation I described is a load management nightmare. Yet maybe our operators will be spared. No, not by the intelligent adoption of renewables alongside increased investment in nuclear power. Rather, it's possible the coming transportation revolution will actually decrease demand on the grid, even if the vehicles themselves are electric. Stephen Baker, a co-author of the book Hop Skip Go: How the Mobility Revolution is Transforming our Lives (Harper Collins, 2019), touched on this point in an interview he gave me last year:

 “...people tend to assume that new technologies will simply follow the patterns of the old. For example, today you drive around in a gasoline-powered machine, tomorrow it will be electric, and a decade from now autonomous. But you’ll keep following the same itineraries.

This isn’t this case. In the next stage of networked mobility, transportation should be far more efficient. Most of us have cars that are only in service 5% of the time. The rest of the time they’re parked. The idea for networked (and eventually autonomous) cars is to squeeze much more production out of them, most likely as a shared resource. This could dramatically reduce our consumption of energy. Then again, if transportation is cheap and efficient, we might use it much more capriciously, perhaps sending an autonomous car across town for tacos or croissants.”

For the sake of dependable electricity, let’s hope Mr. Baker is right.