A few weeks ago, the CEO of California’s grid operator, CAISO, said the agency was “cautiously optimistic” that the state could meet summer electricity demand and avoid the types of rolling blackouts that plagued consumers last year. This week, a heat wave spreading across the U.S. West is imperiling that hope.
Record temperatures expected across much of the Western U.S. mean that measures California put in place in recent months could still fall short of preventing outages. CAISO and Texas’ grid operator, the Electric Reliability Council of Texas (ERCOT), both asked residents to use less electricity this week.
As residents across the region power up air-conditioning that has already pushed electricity demand to a record high in Texas, state grid operators are scrambling to cope with constrained supply while also striving to prevent disastrous power outages.
That problem could increase as climate change progresses and temperatures continue to warm.
“The most significant risk factor for grid reliability remains extreme heat, particularly heat that spreads across the wider Western United States. And it continues to get hotter every year,” CAISO CEO Elliot Mainzer told state lawmakers in May.
As renewable energy resources replace fossil fuels, electricity production is also becoming more variable. At the same time, the reserve capacity available from natural-gas-fired power plants has shrunk, exacerbating the challenges of extreme electricity demand.
The power challenges in California and Texas
Californians experienced their first grid-operator-instituted blackouts in nearly two decades last August, when the state had inadequate power supply to meet demand in the face of a record-breaking heat wave. In Texas, widespread outages during a February winter storm impacted millions of electricity customers and more than 100 Texans died amid freezing temperatures and no power.
The two states dealt with the aftermath of those crises somewhat differently. CAISO sped up procurement of extra resources to plug anticipated gaps in supply. California’s large investor-owned utilities contracted for nearly 2 gigawatts of new batteries to balance out their renewable power. And though the state is working toward 100 percent carbon-free energy, some of the additional capacity California will rely on this summer includes natural-gas plants that were slated to retire.
California can also rely on power imports from other states in certain circumstances. Texas, however, manages its own independent, deregulated grid, which is “the main challenge” the state faces when supply is constrained, said Holly Jetter, Schneider Electric’s director of operations for energy and sustainability services.
This winter, Texas had very little imported power to fall back on when its own power plants went offline. And unlike California's policy levers, high power prices are Texas' main mechanism to encourage generators to build more plants.
Texas has seen a significant uptick in planned battery projects due to market dynamics. ERCOT expects the volume of energy storage on its system to jump from 225 megawatts at the end of 2020 to 1,771 MW by the end of 2021, with nearly 1,400 MW expected to be online by the end of August, according to a new report from S&P Global Market Intelligence.
After its February storm, Texas lawmakers put some additional contingency measures in place, such as requiring power plant weatherization, but they did not institute sweeping changes to the market.
This week will test the state again: Texas must deal with record June electricity demand coinciding with a significant number of forced outages for state electricity generators. On Tuesday, ERCOT said customer conservation is helping with those constraints.
But how each state copes in the coming months will test the grid’s preparation for a future where such events are more likely.
"This is a vital time for companies and grid operators to reassess their planning scenarios," BloombergNEF analyst Brianna Lazerwitz said in an email. "The power market now thinks about risks in terms of severity relative to other 'normal' years. [...] Climate change is blowing up that concept."
California’s solar-heavy grid makes it particularly vulnerable to heat waves that last through the evening, when solar power is ramping down for the day. Texas — the country's biggest wind market — is also adding a stunning amount of solar power, though renewable resources proved relatively resilient during that state’s February storm.
This week, the longer summer days helped maximize the time during which solar could meet Texas' load compared to during February's freeze, said Wade Schauer, research director for power & renewables at energy consultancy Wood Mackenzie.
“ERCOT solar helped quite a bit this week,” said Schauer in an email. “The solar added since this time last year probably avoided some shedding after the higher-than-expected thermal outages and low wind output that occurred" in Texas.
California’s drought has also significantly reduced reservoir levels this year. That hinders the state’s power supply by reducing the availability of hydropower, which is down by 40 percent compared to June 2020, according to Bloomberg data. Meanwhile, wildfires present a consistent challenge for the state’s grid infrastructure.
Hotter temperatures are also constraining California's ability to import electricity from other states, due to increased electricity demand in those locations — another variable that has the potential to cause outages across the region.
As climate change continues to drive up temperatures and worsen drought and wildfires, it is also expected to exacerbate these challenging trends for state grids. That means grid operators will have to consider new thresholds when assessing reserve margins and design capacity, said Schneider’s Jetter.
“Climate change drives volatility [and] unpredictability,” said Jetter. “These grids have been designed for worst-case scenarios based on how the climate behaved even 50 years ago. […] That’s essentially what we’re seeing: the stress put on grids because they weren’t designed for [these] types of weather events.”
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