[ad_1]
(Bloomberg) – Signs of a problem with California’s power system appeared a full day before the power cuts.
Trader Dov Quint sat in his basement outside of Boulder, Colo., Scouring the state’s electricity market for opportunities to take advantage of the California heat wave. He saw something strange: The prices for electricity to be delivered the next day – the day of the blackouts – were around $ 1,000 per megawatt hour, more than 26 times the average for last year.
The last time this happened, in July 2018, demand forecasts were much higher. Something was wrong – were the energy supplies below normal?
In Folsom, Calif., Grid operators in the state’s vast power grid were looking at the same numbers – and predicting a significant power shortage from 6 p.m. on Friday, August 14.
They had a whole day to act. And yet, as Friday night arrived, nearly 2 million Californians were plunged into darkness in the first power outages to hit the state since the energy crisis of 20 years ago. Without warning, utilities cut power to blocks of communities in a bid to save the state’s power grid from cascading blackouts amid the worst heat wave in generations.
There’s a lot to blame, from the state grid operator who failed to prevent the crisis despite market signals portending it, to regulators who for years ignored calls from power generators to align more emergency resources, to a human-led climate. crisis that produces extreme and unpredictable weather conditions. Widespread blackouts have resulted in an electrical emergency that could have implications for how the state handles electricity from now on.
This Friday morning, network operators were not panicking yet. While the heat was certainly pushing up demand, they had seen much worse days, such as in July 2006 when demand hit an all-time high of 50.3 gigawatts during a deadly heat wave.
The independent California system operator, which manages most of the state’s grid, asked neighboring utilities if they had any extra energy to spare, said John Phipps, director of real-time operations at ISO, at a public meeting the following Monday. But there was none. If the utilities had extra supplies, they kept them to themselves in case they needed electricity as the heat increased. ISO has therefore launched an alert asking residents to keep.
108 degrees
But as temperatures climbed, peaking at 108 degrees Fahrenheit (42 Celsius) in Sacramento, demand soared and supply seemed increasingly insufficient.
Gas users have started extracting fuel from the Aliso Canyon storage facility, operated by Sempra Energy’s SoCalGas utility, which supplies gas-fired generators. It was an unusual move for the time of year, traders said, but supplies likely cushioned the shock on electricity prices in Southern California.
At 2:56 p.m., a gas-fired power plant went off unexpectedly, sucking 475 megawatts of electricity from the grid. The state has ordered electricity providers to turn on standby gas units to make up the difference, Phipps said.
But there was not enough reserve gas production for everyone. The state, guided by one of the most ambitious climate policies in the United States, had withdrawn 9 gigawatts of gas capacity – enough to power 6.8 million homes – over the past five years. The state is also seeking to shut down Aliso Canyon, which was operating at reduced capacity after the largest gas leak in U.S. history was discovered in 2015.
ISO had been warning state regulators for years that there were not enough power supplies during the net peak period in summer and that it was facing a potential shortfall of 4.7 gigawatts in power stations. evening hours from 2020, said Steve Berberich, head of the network. operator. While the California Public Utilities Commission, which is responsible for ensuring that large state investor-owned utilities buy enough electricity, has approved 3.3 gigawatts of new capacity, which will only come online. ‘in 2021.
READ: California’s next electricity headache is a looming shortage
The commission rejected Berberich’s comments, saying utilities and other electricity distributors had provided the resources to meet demand forecasts on Friday and Saturday, according to spokeswoman Terrie Prosper.
“It is a shared responsibility and we are working with our sister agencies to better understand why this has happened,” she said.
Solar sets
Late Friday afternoon, when the state’s significant solar output began to drop at sunset, California’s ISO grid operators in its control room in Folsom knew they were in trouble.
The renewable supply was dwindling and there was not enough gas to replace it. The only recourse left was to import electricity from neighboring states. Sadly, imports on a major transmission line connecting northern California to resources in the Pacific Northwest had been curtailed, with network operators in the region lining up their supplies due to the extreme heat, the analyst said. Wood Mackenzie, John McMahon and ISO.
Another problem also arose: In order to import energy through the Energy Imbalance Market, which schedules deliveries to regions in real time, California had to pass what is known as a flexible ramp sufficiency test – a way to prove that it is not excessively dependent on imports to meet demand.
The ISO failed the ramp test every 15 minutes from 5:30 p.m. to 7:00 p.m., according to data reviewed by Bloomberg. This reduced imports by about 446 megawatts during rush hour.
The grid operator had previously warned against imports, saying in June that the state could be vulnerable to power outages if there was a regional heat wave that limited supplies to neighboring states.
“We have told regulators time and time again that imports are drying up and more imports should be taken out,” Berberich said. “It was pushed back.
The commission has changed the way it plans imported energy that will take effect in 2021, Prosper said.
Progressive power outages
Electricity prices rose, making Friday the most profitable day ever to sell electricity from a gas-fired power plant to the grid – until the following Monday, when prices rose even more , according to McMahon.
With no more resources to tap, the Folsom team manager declared a Level 3 emergency at 6:36 p.m. – meaning the state had to use DC outages to prevent the entire grid to crash. This was the first time California had to use such an extreme measure since the energy crisis of 2000 and 2001, when hundreds of thousands of homes and businesses fell into obscurity, electricity prices soared. a record and the state’s largest utility was forced into bankruptcy.
Utilities Pacific Gas & Electric Co., Southern California Edison Co. and San Diego Gas & Electric Co. shut off power in minutes, using software that alternates block outages across their service territories. . They had little time to warn customers of what was to come.
In Santa Clarita, the Salt Creek Grille’s ventilation system went off and the restaurant quickly filled with smoke, killing 70% of that night’s business. Forty miles away, 82-year-old Bob Proulx and his wife found themselves trapped in a house over 90 degrees Celsius when their air conditioner unexpectedly turned off and the garage door did not open. Further south, Yasmine Hairat looked up from her laptop to find that all the lights in her neighborhood had gone out.
“We had no notice,” said Jennifer Chadwick, sales and marketing manager for Salt Creek Grille. “We looked at each other and said, ‘Oh my God, something else. Can something else happen? ”
The lights were only off for a few hours, but the blackouts weren’t over yet – and they added to a long list of miseries for Californians already struggling with the most coronavirus cases in the country, the worst unemployment rates in the West; and rampant forest fires displacing tens of thousands of people.
Second round
Saturday, it happened again.
Network operators started the day confident they could avoid another round of blackouts. Demand was lower than the previous day and supplies seemed sufficient. But shortly after 5 p.m., a 1 gigawatt wind farm suddenly broke down. An hour later, a natural gas unit shut down. Almost a million people have lost electricity.
Over the next few days, as the heat wave persisted, the risk of further power outages was great. At one point, ISO warned it could have to lose 4.4 gigawatts, bypassing up to 10 million people. But by then, heavy electricity users had started to cut back on their energy use in response to personal calls from members of Governor Gavin Newsom’s office. It was enough to end the blackouts, for now.
In a letter sent to Newsom on Wednesday evening, heads of agencies that oversee the state’s electricity system said they would investigate what was wrong. A question comes up several times. Why has this happened when California has seen much warmer days and much higher demand? Simply put, experts say, this has been a problem for years – from destroying gas factories without replacing them, to designing a market focused more on combating manipulation than incentivizing generation. rescue.
Regulators, network operators, utilities and industry experts have all seen this moment coming. They just didn’t think it would happen so quickly.
“I thought it would be a problem for 2021, 2022 and 2023,” said Quint, who previously worked as a senior market engineering specialist at ISO. From there, “the ramp will just get steeper and it won’t go away.”
For more articles like this please visit us at bloomberg.com
Subscribe now to stay ahead with the most trusted source of business news.
© 2020 Bloomberg LP
[ad_2]
Source link