Energy Central Community Deep Dive: Massive heat wave causing power demand surge & wildfire risks in the Western U.S. What are you seeing, thinking, and doing?

In the wake of the blackouts, I’m mainly concerned with avoiding future ones – and specifically overcoming the barriers to energy storage playing a bigger role in preventing more blackouts and providing more value to the grid overall. California’s recent blackouts weren’t triggered by public safety concerns but rather by a resource shortage that was years in the making; what this incident shows is that CAISO and the utilities need to fully utilize all resources available on the system, including customer-sited solar and storage. Recent analysis commissioned by Stem and solar developer Sunrun found that customer-sited solar and storage could provide roughly 9 GW of capacity in California – about one-fifth of CAISO’s current peak load – to help maintain reliability. But today, most behind the meter (BTM) energy storage systems are only allowed to discharge energy to the specific customer(s) they’re attached to and prevented from sending energy back to the grid (export) even during emergencies. The key lesson is that BTM storage should be allowed to and compensated for exporting energy to the grid. And if California is serious about avoiding future blackouts, it needs to dramatically increase grid connected storage installations. This can be done in two ways: by allowing BTM storage to provide its full suite of potential grid services and compensating it appropriately in wholesale markets; and by accelerating the incorporation of front of meter (FTM) storage in planning, procurement and market design for an ultra-high renewables grid. For interested readers, my blog post on these topics is available here: https://www.stem.com/how-storage-helped-california-reduce-the-
blackouts-and-how-it-can-help-avoid-them-in-the-future/.

As I wrote in a recent article published to Energy Central, perhaps this is motivation to give a more serious look at dynamic pricing:

Experts from all facets of the industry – ranging from grid operators, utilities, and regulators to academics, researchers, consultants, and private industry -- have opined on the subject. They have proffered the following solutions:

• Don’t mess with demand, just build more supply
• Introduce capacity markets in wholesale markets to improve resource adequacy
• Don’t mess with retail markets, just focus on wholesale markets
• If you must do something in retail markets, spare the residential customer (even though it was their effort that prevented additional blackouts). Just focus on commercial and industrial customers because residential customers don’t want to be bothered (but it’s apparently OK to bother them totally by cutting off their power).
• If you have do something with residential customers, do it through curtailments and not through prices because customers don’t respond to prices 

In other words, these experts are telling us that residential customers can’t and won’t respond to dynamic pricing. And even if they do respond, their response is unpredictable, inconsequential and not worthy of our attention.

Is that true? Customers encounter dynamic pricing or some version of time-of-use pricing in several walks of life. E.g., the prices of groceries vary seasonally. The prices of airplane tickets, hotel rooms and rental cars vary dynamically. Movie theaters use time-of-use pricing as do some restaurants. Operas and sporting events use dynamic pricing. So price variation by time is not a foreign subject for consumers.

...

Why not use dynamic pricing to ride through power shortages? Let customers choose whether they want to pay higher prices when shortages are suddenly encountered or choose not to buy the amount of power they would normally have purchased. Either way, they would be better off than having someone just cut off their entire power.

Read the full article here. 

Hi Matt:

You received many responses, and I considered not adding mine, but since I'm in the epicenter of the situation and frequently write on this subject, I suppose I really need to comment. First two links:

https://www.energycentral.com/c/ec/fires-and-storms-%E2%80%93-part-1-rev-b

The first is a recent post on the initial event that caught CA-ISO unprepared. They can be forgiven, because I have never seen an event like this in 30 years of living in Northern California. Is this something we will see more of with climate change? Be sure to read my follow up comment to this post.

The second post describes what we are dealing with now - our classical northern high, dry wind event.  This is described about half-way through section 3 (beginning of page 5) of this paper. The good news is that our current event seems to be weak-to moderate. This did not stop PG&E from issuing many public safety power shutoffs (once burned...).

We are also in the midst of another heat wave. This is not as long as the one described in the first post above, and there are no dying tropical storms that I'm aware of, so it's dying with a whimper (today). CA-ISO's capacity seems to be fine, but they issued a Flex Alert, and the public is responding. 

Finally, renewables did not cause out problems, we have plenty of dispatchable generation to mitigate their variability. We are also adding many very-large battery energy storage systems in recent and in the next few months (future post).

-John

Here's our summary of the story so far:

 

Hello All:  As per usual, I have a bit of a different take on this issue.  I do not have an immediate solution to recommend, but I do have a recommendation on two long term solutions that need to be seriously considered.  The overall answer is not to do incremental fix it when it breaks.  It is far past time to fundamentally rethink how we supply electricity across the United States, and for that matter, around the world. Our present problems have illustrated our ongoing problems clearly. It is time for a new approach made possible by our evolving energy technology.

1) All buildings and homes, in particular, need to add solar on their roof (or even small wind where feasible) and an adequate energy storage system in their garage with a multi-day capability.  These systems could be paid for under a public/private joint venture using a Power Purchase Agreement with ultimate ownership in the hands of the utilities who can perform the necessary O & M responsibilities.  This is the utility company of the future.  There needs to be a comprehensive and national effort to make every building energy self-sufficient. In the process, we would significant reduce the dependence on the grid. The insitutional endowment community (pension funds, higher education, religious groups, etc.) control over $100 trillion in capital that could be invested in such an effort with a rate of return far beyond what they acheive now.

2) As part of the hoped for upcoming national infrastructure revitalization program, it is time to rebuild the entire national grid and the last mile electrical distribution system to be completely resilient.  Yes, I am talking about under-grounding everything.  We spend billions every time a puff of wind comes through and blows down the power lines, and we expose our national grid to internal and external sabotage by those with evil intent. A fully underground national electrical system would address so many of the issues that result in problems today.  Yes, this will cause trillions of dollars, but that expense will be far cheaper than doing nothing, and we will get reliable, safe, and resilient electrical supply. It will also create 100's of thousands of solid middle class jobs.

Please see attached article LINK that sums things up quite well as it relates to generation. As many of you know our grid is still in need of work. There are many congested transmission lines in California which limit our ability to deliver power from the cleanest and or least expensive sources of generation. SCE is having great success by swaping out ACSR and ACSS conductors with high-capacity, low-sag ACCC Condutcor which helps mitigate congestion and also serving to reduce line losses by roughly 30%. This effectively frees up generation capacity that is otherwise wasted. 

As I wrote here, there’s a lot of history here, both nationally and in California. First, the rapid expansion of shale gas drilling and harvesting has taken the price of Henry Hub natural gas, which has historically set the price of electricity, from $19.34 per MMBTU in 2005 to $1.77 in 2016 and around $2.45 currently. Conventional wisdom, now embraced even by many participating industry CEOs is that the IPP model has been handicapped, despite the creation of “YieldCos,” spinoff companies that securitize generation assets and receivables to separate—and insulate—them from other parts of the power business. Yet we still depend largely in FERC-regulated markets on merchant generators.

And in California, the political climate and environmental activism has also expanded renewable generation significantly, while not sufficiently backing up utility-scale wind and solar with fast-ramping gas generation, as it’s been done in other states. The closing of the San Onofre nuclear plant, several plants that use once-through cooling, and the denial by the California Energy Commission to site, build and operate new peaking plants contributed to the insufficient power supply on the weekend of August 14 and 15.  

See the rest of my thoughts in this full article: 

It may be said that some of the worst impacts of this situation came from a lack of proper preparation. As I wrote in a recently submitted article to Energy Central:

CAISO was aware of the heat wave and began planning – but for a number of reasons now under investigation – it failed to have sufficient resources to meet the load. Temperatures turned out to be hotter than expected, cloud cover in the desert – where the bulk of the utility-scale solar power plants are – reduced solar generation. Making matters worse, neighboring Western states were also impacted by the same heat wave with little surplus power to sell. On top of it all, it didn’t get much cooler after the sunset, which meant that AC units were running into the night when there is no solar output. It was the perfect storm. 
 
A visibly annoyed Gov. Gavin Newsom acknowledged that the state had failed to predict and plan for the energy shortages. He said, “I am not pleased with what’s happened," adding, "You shouldn’t be pleased with the moment that we’re in in the state of California,” adding that he would ask the California Public Utilities Commission (CPUC) and the CAISO to investigate. 
 
“These blackouts … are unacceptable and unbefitting of the nation’s largest and most innovative state. This cannot stand. California residents and businesses deserve better from their government.”

The rest of my thoughts can be read here in the full article.  

I shared a recent link on this topic on Energy Central here: https://energycentral.com/c/pip/california%E2%80%99s-electric-grid-near-collapse-california-globe

My takeaway is that the collision of politics and reality is playing out in California. Killing nuclear generation and depending on solar and wind looks like it is leading to disaster for California citizens.

There is a very sightful article available analyzing the root cause of the CA blackouts that I highly recommend: https://www.linkedin.com/pulse/buried-caisos-public-data-clue-rolling-blackouts-california-dov-quint/?trackingId=eB3ENh2ovM60b7iG4bikoA%3D%3D

This is precisely why the wholesale markets need to replace "plain old capacity" purchases with essential grid services at granular durations and locations using an always on  capacity exchange (AOCE) approach.

Great questions Matt... What am I seeing, thinking, doing? I'm living and breathing microgrids! 

Seeing:

California continues to be on the wrong side of energy policy history. The CPUC has a chance to revolutionize the power sector with the open rulemaking on microgrids and instead of proposing bold action to commercialize the market, our regulators are paralyzed with fear of "cost shifting" and completely ignoring the plethora of benefits and opportunities for ratepayer savings that will come with widescale deployment of mcirogrids. The current proposals are a timid toe in the water when we need to unleash the power of California innovation and technological advancement. 

I see microgrids as the solution to many many of our problems. Environmental, economic and societal. I see microgrids as having a triple bottom line effect on all communities, and especially in California with our severe reliability and resiliency issues stemming from PSPS events, wildfires and now rolling blackouts. 

Thinking: 

"As if we didn’t have already enough reasons to commercialize microgrids…" 

Doing:

Educating policymakers on all the benefits that microgrids can provide us, especially during these unprecedented and historic times. 

-Microgrids can provide capacity to the grid when it is needed most

-Microgrids can reduce strain on the grid by supplying customers with their own capacity and load shed during a shortfall. This reduces the overall capacity needed to maintain reliability and less power needing to be purchased at high rates from out of state resources that are often not clean, which results in lower costs for ALL customers. 

-Microgrids provide resiliency so customers do not suffer the immense costs of power outages which are further compounded during the Pandemic. The value of lost load for Californians is estimated to be $160-320 per day. That is for residential customers. C&I customers face significantly higher costs with more severe consequences for their business and the economy that usually go unquantified. https://www.manhattan-institute.org/managing-california-wildfire-risk ​​

Questioning:

How many more lives and billions of dollars in losses is it going to take for California to make bold, sweeping changes for the better? The power has gone out, California policymakers. What are you going to do to help your constituents? Are you going to continue the status quo, at the expense of many more dollars and lives? Or are you going to be on the right side of energy policy history this time? 

Commercialize microgrids with bold action. We are in an emergency. It's time policymakers start acting like it. 

The situation in California underscores the need for energy diversity and for baseload energy.  When coupled with clean energy priorities, nuclear energy has to be a key element of the mix (not to the exclusion of renewables), but both Germany and California show the shortcomings of a heavy move away from nuclear energy.  The facts cannot be ignored.

By balancing the portfolio with a variety of clean energy technologies, multiple goals can be achieved.  But an 100% renewables strategy simply cannot work in a large, industrialized economy.  Baseload is needed.  Intermittency must be considered, as well as the total system costs of electricity.  Without taking a complete look at these issues, energy security is compromised.

Addressing climate change is important, but it cannot ignore the realities of electricity generation and grid management.  For a large portion of the environmental community to ignore the benefits of nuclear does a disservice to climate change efforts and efforts to have clean growth strategies.

Much of the U.S. energy system predates the turn of the 21st century. Most electric transmission and distribution lines were constructed in the 1950s and 1960s with a 50-year life expectancy, and the more than 640,000 miles of high-voltage transmission lines in the lower 48 states’ power grids are at full capacity.  This fact coupled with the retirements of base load coal and nuclear plants and new renewable generation being placed miles away from urban load centers we have the perfect storm.  Without greater attention to aging equipment, capacity bottlenecks, and increased demand, as well as increasing storm and climate impacts, Americans will likely experience longer and more frequent power interruptions.

Click here to learn more about America's report card on energy.  

This moment is yet another call to action for regulators - the energy landscape has changed, and now the rules must change...but like...for real. As is laid out by MIT's Technology Review in this article, this issue could be solved with existing technology like voluntary demand response: https://www.technologyreview.com/2020/08/18/1007212/california-heatwave-rolling-blackouts-grid-climate-change/

How infuriating is this to those of you in California? The problem could be solved as simply as providing an unconstrained incentive for people to proverbially "turn the lights out and the AC down a few degrees" and there would be no need for rolling blackouts. Scheduled outages for unnecessary C&I processes alone could save billions of dollars and the lives of vulnerable human beings. It's not hyperbole - it's real! And what's more, the solution I'm recommending is free-market based. Should be a no-brainer.

I'd start the discussion under one mantra:

ALL resources should be adequately compensated for the value that they could offer the grid.

The DER Task Force lays out the tenants of what that might look like as a part of Connecticut's current Grid Mod proceedings, here:

I think we're all looking for opportunities to improve the landscape, and I know this is a *charged* topic...so bring your best tire-kicking shoes. Let's find a real solution here.

Hi Matt, 

Great question. Over the past year, the California Public Utility Commission (CPUC) chartered the Vehicle-Grid Integration (VGI) working group to address electric vehicle managed charging. The VGI working group submitted a large number of technical and policy recommendations for the CPUC to consider that addressed not only minimizing grid impacts, but even better, helping to enhance and stabilize the California grid. Some of those technical and policy recommendations had to do with renewables penetration, while others had to do with wildfires and the Power Safety Power Shutoff, or PSPS program. Future use of EVs via managed charging can greatly minimize the impacts of a PSPS event by providing local power when the utility must shut down power to a community due to a wildfire. About 80 experts from a variety of interests (utilities, OEMs, vendors, NGOs, etc.) participated in the VGI working group from July 2019 to June 2020. The final report (June 2020) is available from CPUC.

In my own opinion (not speaking on behalf of my employer BPA)  this is a direct result of the push to replace fossil fueled generation sources with renewable energy. I’m assuming that just like here in WA/OR, California also has an energy policy that gives preference to renewable generation sources. (Environmental regulations are the driver behind the policy, but that’s just a scapegoat) Therein lies the problem; If 50- 100% of the time, some of these fossil fuel generators are offline due to renewables having preference, then they aren’t making money. Therefore they can’t pay for maintenance costs, capital projects, etc. So they instead are essentially forced to shut down or mothball their extra generators, or close the entire plant down completely. 

Policy makers that make these policies either blatantly ignore the facts or don’t choose to learn. There are many historical graphs that show when the ambient temperatures are at the extreme (hot or cold) and therefore the demand for power is highest, wind power dies off dramatically. And of course solar has its own set of “unreliable” characteristics, frequency response issues, and a plethora of other problems it presents to the grid. See my attached graph (this is our (BPA’s) Balancing Authority area), so not California, but it doesn’t matter, it shows what I’m saying and you can find all sorts of statistics specifically for CA. 

Point is; California has backed themselves into this corner of not enough generation supply for the peak demand, by encouraging relatively unreliable renewable sources and “shutting down” ultra reliable fossil fueled generation sources. These rolling blackouts should be a huge eye opener. If the “push” continues to go to all renewable sources, this kind of thing will become the norm.

The COVID-19 pandemic is a government-mandated shutdown of some commercial business operations and a reduction in others' operations. The results are lower energy demand in the commercial sector and a slight increase in energy demand in the residential sector. The net effect is reduced overall electricity demand and reduced overall peak electricity demand. In Los Angeles, the heatwaves are a few degrees hotter this August than they were in August 2018, and peak demand is cumulatively lower this August than it was in August 2018 -- because of COVID-19 policies. At a glance, we might expect to see fewer outages this year than in 2018; however, customer loads are not evenly allocated in circuits across the distribution network. Some circuits are more likely to have both higher economic-based usage and higher weather-based usage, which means higher outage probabilities on those circuits. Nevertheless, if it weren't for the COVID-19 reductions in demand, we would probably be experiencing more outages overall.

In their 2019 Integrated Energy Policy Report, the California Energy Commission published a map of substation vulnerabilities to heatwaves throughout Los Angeles County based on recent advancements in research and development. The study cited used residential and commercial sector demand patterns from before the COVID-19 pandemic. Utilities should be implementing some version of this new AI software that will make good use of new high-resolution data available for more reliable operations and better grid resilience.

I wrote on the topic of how the transmission lines are threatening Northern California during this crisis for Energy Central recently. See the full post here, and copied here is a key excerpt:

But PG&E, the embattled utility that was found responsible for all but one of the fires that October, has buttressed their transmission system to ensure this doesn’t happen again, right? Sort of. They have made some relatively low-cost, low-intrusion changes to mitigate fires since 2017: Synchrophasers come to mind. But the comprehensive changes needed to protect Northern Californians are a distant dream. And so here we are yet again, biting our nails as temperatures in Sonoma flirt with the three digit mark.

Making matters worse, residents of the region need electricity more than ever because of Covid-19. They aren’t going to their offices that may have micro-grids or generators. So if power is out, so are their jobs. 

Matt,

Living in Northern California, I can say that the single most important measure that is not addressed adequately with respect to wildfire management is vegetation management in and around power lines. Living in a suburban neghborhood, I can walk 1 mile in any direction and find power lines running through or very close to trees.  The situation must be far worse in foothills, mountains, and other wooded terrain.  PG&E needs to put greater effort toward this measure.  Past fire seasons tell us what happens when the vegetation around power lines are poorly or not maintained.  PG&E ended up in bankruptcy court as a result.  PG&Es bankruptcy combined with the fianancial impacts from COVID19 make this a dangerous situation.   I would welcome any comments on this situation.

Bill Buchan, P.E.

Agreed with others who note that there is blame being passed around. Here's an excerpt from a recent article I wrote on the topic for Energy Central:

From northern Montana to southern California, some 56 million people are under excessive heat warnings or heat advisories.  Utilities are asking customers to conserve energy as they battle high temperatures.  Sacramento, California, saw its hottest August day on record Sunday, of 112 degrees. Los Angeles, Las Vegas, Seattle, Phoenix and Salt Lake City all broke daily temperature records, some as high as 115 degrees. California Independent System Operator (ISO) Chair Steve Berberich said "it is near certain" that utilities will have to cut off power to "millions" of people this week.  However, Gov. Gavin Newsom is investigating that action, saying, “Residents, communities and other governmental organizations did not receive sufficient warning that these de-energizations could occur. Collectively, energy regulators failed to anticipate this event and to take necessary actions to ensure reliable power to Californians. This cannot stand.”

Full article text

To the extent that a lack of air conditioning drives people to crowded beaches or other areas where it is cooler, it may increase the spread of this virus. It may hinder social distancing and because wearing a mask is uncomfortable some people will not wear one. Cooling centers may have reduced capacity due to respecting recommendations on social distancing. This could add to this concern.

1. Rotating Load cuts increase the damage and affect some people greatly - for example the elderly. Would it be better to close some, or even many,  businesses and offices early? That way you select people who might experience the least damage. 
2. This is an instance where reliability interacts with the pandemic. 
   1. The coronavirus is forcing some people to stay indoors where a lack of airconditioning could be more serious
   2. If loads are cuts in certain mostly poorer districts advice to "find a tree" is useless
3. Generation Fails. That cannot be cited as a reason for this. Reliability analysis should consider load forecasting errors if it does not. The consideration should look at the records of forecasting errors over history.
4. The following chart shows that renewable energy output dropped from 13000 Mw to 3000 MW on Aug 14 a drop of 10000 MW.  I do not have to loads to see what the net loss was.​
5. I have been told that the incentives for solar panels encourage a placement maximizing output during the noon hours and that a more west-facing placement for some of the panels would spread the output out, lowering the peak capacity and shifting some of the power to times where this problem is occurring. Careful calculations would be needed to optimize this. Has this been done?
6. For greenhouse gas emissions the focus should be on retention of baseload non-fossil resources. Gas-fired peaking resources have a relatively low energy output and would not add significantly to greenhouse gas emissions but would improve reliability..
7. Not all of the consequences of load cuts are quantifiable.
8. It should be born in mind that the costs of having too little reserve likely exceed the costs of having 'too much' reserve.

A key question in this situation is figuring out the causes and who might be to blame. Yesterday utilities blamed regulators in California for not allowing them to secure additional supply. Some argued this is a staged show to save 3 gas power plants slated to be closed and yet some blamed government policies with call for recalling California Governor Gavin Newsom.

But what is the root cause and can this mess be fixed?

Here are my take (with more details included in my full post to Energy Central on the topic)

1. Most of the green enthusiast have no formal background in electrical engineering and physical characteristics of the grid.  You can not re-purpose a ship to make a sleek car!

2. Chronic shortage of man power, let aside talented, utilities are far short of man power who can actually work in the field and maintain network. 

3. Unbiased assessment of the real value delivered by Solar and wind to the grid and what part of the grid don't have alternatives yet. 

4. Decouple utility planning from O&M

5. Decentralize grid

6. Social and behaviors need to change.