In Episode 130 of The Workplace podcast, California Chamber of Commerce President and CEO Allan Zaremberg, and California Independent System Operator President and CEO Elliot Mainzer discuss the challenges facing California’s power grid, and how business and regional partnerships are helping the state keep the lights on during extreme weather events.
Challenges to State Power Grid
The state’s power grid sees the most stress in the summertime. August and September are the most vulnerable months for the power grid as the sun doesn’t shine as long in the months of September and October as it does in June, Zaremberg tells podcast listeners.
In addition, California has made a decision to rely more on solar power than in certain fossil fuels. While this gives California an opportunity to be a leader in green technology, it is also creating a situation where we need to ensure that we have sufficient generation of power.
The California Independent System Operator (CAISO) is the entity that operates about 80% of the transmission grid and energy market in the state, and it is the entity that at the end of the day is responsible for supplying enough energy to meet demand, Mainzer explains.
In California, he says, we have the confluence of three major challenges. One of those challenges is the policy decision the state has made to move from fossil fuels toward cleaner energy generation technology. In response, CAISO has removed a lot of fossil fire generation and some types of gas plants from the system. More solar and wind resources have also been brought in, but these sources behave differently than the traditional resources.
Another major challenge, Mainzer says, is the acceleration of “climate change signals.” For example, on July 9, we saw very high temperatures in areas of California, and in Oregon, a wildfire took out the major power transmission lines coming into California. Lastly, the grid is being stressed in new ways, particularly after sunset, in what is referred to as the “net peak period.”
CAISO is in the process of having to accelerate the deployment of new clean energy generation technology and transmission to catch up with this change in climate signals and changing pattern of load and demand, which takes a lot of focus and energy, he tells Zaremberg.
There’s an incredible sense of urgency and accountability at CAISO, with the Governor and agencies throughout the state to make energy affordable and reliable so that Californians don’t live on the edge for the foreseeable future.
How Businesses Can Help
What, Zaremberg asks Mainzer, can the business community do to help?
Many members of the business community have provided valuable demand response solutions to the state for years, Mainzer says. Just this summer, CAISO was able to avert rotating outages by tapping into several hundred megawatts thanks to large industrial customers reducing their electrical consumption. These companies were operating under programs administered with their local utilities. The programs are valuable and while these programs are not administered by CAISO, they are a tool the entity has been using during emergency conditions and will continue to rely on for the next couple of years at least, Mainzer says.
Over time, the model for “load optimization” is to work with business and residential consumers who have flexibility to move their demand from peak periods to off peak periods—that is, from sunset to earlier in the day. Mainzer says CAISO is in the process updating the model so that it can be done with advanced technology and automation so as to avoid grid emergencies.
Businesses that want to help and sign up for these programs should contact their host utilities, the California Energy Commission or the California Public Utilities Commission. These agencies are responsible for administering and designing the bulk of these programs.
California also recently released information on the programs, with a customer template and claim forms for commercial customers that reduce load or utilize backup generation during emergency events. A program overview is available at dof.ca.gov/Programs/California_State_Emergency_Program/.
Peak Demand
The time period that is most problematic for the power grid is between 4 p.m. and 9 p.m. — particularly in the summer as we simultaneously have very hot weather in California and hot weather in the Northwest, Intermountain West and Desert Southwest, which are places we import energy from, Mainzer explains.
Currently, CAISO issues Flex Alerts and heat bulletins to give advanced notice, but over time the goal is to get away from having to issue these communications, he says.
Any additional voluntary participation or enrollment from businesses or residents in emergency load reduction programs would be very helpful as we navigate through these challenges in the summers ahead, Mainzer urges.
Hydropower, Battery Storage
The drought in the West is impacting hydropower and is adding another dimension to the state’s power challenges, Zaremberg says.
After the rotational outages California experienced in August 2020, Mainzer said, CAISO took a number of actions, such as procuring additional capacity and new battery storage, becoming well-equipped to store energy during the day and then reinject it into the grid after sunset.
While a number of positive steps were taken, the unprecedented drought across all the Western states this year is really taking a toll on hydropower production in California.
Due to critical low water levels, the Lake Oroville hydropower plant recently stopped producing electric power and other adjacent areas in the West where California imports energy from are also experiencing below average water conditions, Mainzer says. This year, we have 50% as much hydro production as we did in 2015, which was California’s last decent water year.
Better battery storage technology is going to play a big role in sustaining power supply during the peak usage hours, but it’s going to be only a part of the solution, Mainzer says.
In the coming years we’re going to see the retirement of the Diablo Canyon nuclear power plant and the retirement of gas units. So, it’s going to take a portfolio of resources, such as battery storage; renewable energy production; around-the-clock, dispatchable capacity; technology such as geothermal; and other resources to provide reliability to the grid.
Another challenge is getting the transmission grid reinforced to get new electricity supplies to where the demand is, and that has not been an easy equation inside of California, he says. So, what is absolutely essential is that agencies throughout the state embrace transmission construction and development. We need to make sure that our permitting and siting processes don’t slow down construction to such an extent that we’re unable to get resources onto the power grid.
Importance of Regional Partnerships
Zaremberg asks Mainzer whether CAISO is cooperating with Western states as well, given that California’s power generation is tied to theirs.
Mainzer says that cooperation, collaboration and partnership is critical, whether it pertains to the importation of resources from other states, enhanced transmission, or looking for additional ways to extend power into longer time horizons.
Many of the issues of water scarcity and shortage that California is grappling with are shared across the Western United States, he says.
“Which means that we all need to be coordinating and sharing resources and being aware of each other’s situation and supporting each other to the maximum extent possible,” Mainzer says. “We are all part of an interconnected grid in the West and if one of us has major reliability problems, it affects the rest of us.”
