Western utility regulators have no time to waste in addressing the region’s looming resource adequacy shortfalls, industry experts said last week.

“Yes, there is a problem, and it’s happening now,” WECC Manager of Performance Analysis and Resource Adequacy Matt Elkins said during the regional entity’s second Resource Adequacy Forum on Wednesday. (See WECC Seeks to ‘Invent’ Future with RA Forum.)

“We saw it in 2020. Our models started seeing this coming a couple years ago. I think everyone started talking about this — ‘Hey, variability is growing’ — and I think we’re there now. I think we need to come together and really figure out how to do this as an interconnection,” Elkins said.

Arne Olsen, senior partner with Energy and Environmental Economics, agreed about the urgency: “It’s a right-now problem, not a five-years-from-now problem.

“All the modeling shows it in California. Our Northwest studies show that the Northwest has a problem. … I don’t know about the Southwest and the Front Range areas, because I haven’t looked at those specifically, but West-wide I think we have a problem,” Olsen said.

“In California … our problem is now and is going to get much worse in the future” with the loss of the 24/7 baseload capacity from the 2,256-MW Diablo Canyon nuclear plant, slated for closure in 2025, said Karl Meeusen, CAISO senior adviser for infrastructure and regulatory policy.

What should a regulator do?

“I guess my first advice would be [to] examine very closely the [integrated resource plan] practices of the utilities that are under your jurisdiction. And if you see one of your utilities with a very large short position, then you should be aware that it’s going to be difficult — and perhaps expensive — for them to fill that position over the next couple of years,” Olsen said.

Over the long run, regulators should be looking at what resources their utilities need to serve load “reliably and at a reasonable cost,” he said.

Olsen said that all resources contribute to RA but do so in different ways. While fully dispatchable resources are rated at their nameplate capacity, dispatch-limited variable resources are rated based on their effective load-carrying capability, a measure of a resource’s ability to perform during intervals with a high loss-of-load probability (LOLP).

“The more you have of a non-dispatchable resource, the more apparent their limitations become,” Olsen said, adding that it is best to pair resources such as wind and solar with battery storage, for example.

‘Summer-needy’ Northwest

John Fazio, senior analyst with the Northwest Power and Conservation Council, said his organization has a mandate to produce a five-year regional power plan for Idaho, Montana, Oregon and Washington, the region covered by the Bonneville Power Administration’s hydroelectric system. The council uses annual LOLP as its RA standard, with an expectation of no more than one shortfall every 20 years — which, Fazio clarified, refers to a need for balancing authorities to take emergency actions, but not necessarily initiate blackouts.

With climate change bringing higher temperatures, “we anticipate that during winter, we will see less demand, which is a good thing, and we will also see more snowfall and rain in the system, which is good thing,” Fazio said. On the flip side, earlier snowmelt means the hydro system will have less water in the summer, leaving the Northwest with less energy to export to California. Meanwhile, retirements of coal-fired plants in the region will translate into an increasing LOLP heading into the next decade.

Fazio said the council’s RA standard counts some imports on top of the resources within the Northwest region. “And we’ve had debates about how much we should rely on that — and that is a policy question; that’s not an assessment of what’s physically available, but it’s a question of how much the region wants to rely on that,” he said.

“The challenges that we’re facing now is that we’re seeing this general trend toward warming temperatures, which means that, even though our summer loads may not be as high as our winter loads, the more important thing for us is the gap between the loads and the resources,” Fazio said. “And it looks like the Northwest is moving toward becoming more of a summer-needy region, which means there will be a challenge in the future because both the Northwest and the Southwest may be competing for the resources at the same time.”

Fazio said the council is shifting from using a historical model in its power plans to one based on climate change trends.

Meeusen said California’s approach to RA entails “making sure that resources are not just there but contracted and offered into the market” through month-ahead and year-ahead contracts.

“We really don’t know until 45 days prior to the month which resources we’re going to be relying on,” Meeusen said.

CAISO relies on a stochastic production simulation that allows the ISO to look at load, wind, solar and outages and “see how they work together” and determine risk “if something drops off.”

“The hard part of this stochastic model is, do we have enough,” and if not, what does the ISO need to procure using its backstop authority?

Olsen said regional reserve sharing has the potential to yield “significant benefits.”

“In effect, we’ve kind of been counting on that regional coordination already as we’ve got resource planning throughout the West, but largely in an uncoordinated manner,” Olsen said. Each system performs its own estimate of how much capacity might be available in the market, but it’s difficult to ascertain whether there’s enough available for everyone in the Western Interconnection, he said.

“And that has gotten us into a little bit of trouble. I think this was a good assumption as long as the system had surplus capacity, which it has had for 20 years, but now as we move towards a system with less and less capacity available and some resources are getting retired … it’s difficult to know how much capacity might be available,” Olsen said.

“Which is to say that the way we’ve been doing things for the past several years, really a couple of decades, may not be sufficient to maintain reliability going forward.”

Olsen said he likes the direction the Northwest Power Pool is moving in developing its RA program, noting that it fits with the region’s system of bilateral trading among largely vertically integrated utilities. (See NWPP RA Effort Quickly Ramping Up.)

“If we had just four of those entities, each of them looking after its own region [in the West], and then they could all get together and talk about how much they can lean on each other on a broad regional basis — under the auspices of a WECC task force, for example — that would feel like a good long-term direction.”