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Heatwave leaves California power market reeling

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Kent Knutson's picture
Energy Market Specialist Hitachi Energy USA Inc.

Kent Knutson is a market specialist focusing on energy industry intelligence for Hitachi Energy.  He has more than 30 years of experience designing and developing intelligence products for some...

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  • Aug 25, 2020
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From the full article published in Power Magazine on August 20, 2020

Recent thermal and nuclear plant retirements in California have had an impact

According to data compiled by Hitachi ABB Power Grids’ Velocity Suite research team, there have been more than 13.6 GW of gas-fueled capacity retired since 2013 in California – 67.8% (9.1 GW) in just the past five years.  In 2013, the huge 2.3 GW San Onofre Nuclear Plant shuttered, adding to the rapid reduction of dispatchable generation resources in California.  Between now and the end of 2025, there are 4.6 GW and 2.3 GW of natural gas and nuclear capacity scheduled for retirement across the state, respectively.

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Bob Meinetz's picture
Bob Meinetz on Aug 26, 2020

Thanks Kent, great article.

"Power prices at nodes in the Tahoe area spiked into the thousands of dollars per megawatt hour on Saturday, resulting in electricity prices up to 10X higher than average for this time of the year."

Wonder if Lazard is including the thousands-of-dollars-per megawatthour prices in its calculation of solar and wind's  "competitive" LCOEs (?).

"On a positive front, the Flex Alert program appears to be working, since many of the forecast peaks expected this week have not been reached. Some of the mitigation activities include:
• Setting air conditioning thermostats to 78F.
• Deferring use of major appliances until off-peak hours.
• Turning off unnecessary lights.
• Unplugging unused electrical devices."

Wonder where the thermostat is set in Gavin Newsom's home? I'd tend to believe old Gavin is cool as a cucumber, while Californians who weren't fortunate enough to have their careers financed by Gordon Getty swelter in the dark. For them, the news might appear on a front less positive.

"...recent high demands on the state’s electric system will require additional solutions, including discussions surrounding x, y, and z..."

The only solution that matters now is stopping the premature abandonment of Diablo Canyon Power Plant in 2024-25 (somehow legislators in Sacramento experience a power outage when it comes to speaking those words).

John Simonelli's picture
John Simonelli on Aug 27, 2020

Once again state regulation run amok with policies that fail to grasp the intricacies of reliably operating a complex power system.

Gary Hilberg's picture
Gary Hilberg on Aug 31, 2020

Kent - do your retirement numbers include the proposed extension for some of the older gas fired units mentioned by CAISO recently?  AES plants I believe.  

Kent Knutson's picture
Kent Knutson on Aug 31, 2020

Hi Gary, we have Alimitos 3, 4 and 5 and Huntington Beach 2 (about 1,300 MW total) retiring in 2023 . . . so I believe if they are extended that would put them operating beyond 2023 . . . the largest gas retirement is Ormand Beach (about 800 MW) next year. 

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