By Hudson Sangree
FOLSOM, Calif. — CAISO’s Board of Governors on Wednesday heard that the ISO could face capacity shortages as soon as next year if steps aren’t taken to address the potential shortfall, including keeping aging natural gas plants from retiring as planned.
In a presentation to the board, CAISO Vice President Mark Rothleder said summer peak demand is shifting from late afternoon to early evening. People now are going home and turning on their air conditioning around 7 p.m., just as solar power peters out, he said.
“The issue is not so much at the peak hour,” Rothleder said. “It’s at the near-peak hour as the sun goes down.”
By next summer there could be insufficient capacity to meet the ISO’s system reliability requirements, which include a 15% planning reserve, Rothleder said.
Imports that aren’t already under contract could fill the gap, but tightening supply in the West makes those imports unreliable. California’s neighbors are using more of their own electricity instead of exporting it, he said.
Rothleder said the shortages could start in the hot summer days of 2020 with a 2,300-MW shortfall at 7 p.m., increasing to 4,400 MW in 2021 and 4,700 MW in 2022. The problem could worsen when Pacific Gas and Electric’s Diablo Canyon Power Plant, the state’s last nuclear generating station, shuts down in phases starting in 2024, he said.
California is on an ambitious push to use carbon-free energy, but to avoid a crisis it may be necessary to prevent older natural gas peak plants from shutting down, Rothleder told the board.
“We’ve got the last tranche of once-through cooling scheduled for retirement” near the end of 2020, Rothleder said. Those plants can generate about 4,000 MW, he said.
Once-through-cooling (OTC) plants are being phased out because they use water from oceans and estuaries, killing billions of marine organisms including fish larvae and shellfish, according to the California Energy Commission.
“We need to get on the track of procurement” to generate more energy, Rothleder said.
Increasing wind and geothermal energy production, and adding more short- and long-term storage, would provide energy after sundown without greenhouse gases, he said.
In public comments Wednesday, speakers encouraged the board to move quickly to address the resource adequacy problem.
“We urge the ISO to continue to work on this expeditiously. Soon. Now. Not later,” said Eric Eisenman, PG&E’s director of FERC and ISO relations.
Board Chair David Olsen responded, “This is obviously our top priority. Front and center for us.”
Edward Randolph, director of the California Public Utilities Commission’s Energy Division, told the board that the commission also is acting on the threat.
“We do take what is being raised here today pretty seriously,” Randolph said.
On Sept. 12, a CPUC administrative law judge issued a proposed decision requiring load-serving entities in Southern California Edison’s service area to procure 2,500 MW of additional resources between August 2021 and August 2023. ALJ Julie Fitch also recommended keeping the OTC plants operating, a decision that’s ultimately up to the state Water Resources Control Board.
“Procurement shall be conducted on an all-source basis, including both existing and new resources, and may include LSE-owned resources when justified,” Fitch wrote.
“The commission should act now to forestall a potential system reliability emergency by 2021 and require ‘least regrets’ actions with respect to OTC deadlines and LSE procurement,” she said.
The CPUC could vote to adopt the decision as early as Oct. 24, it said.