Energy experts in California are urging state officials to think twice about using a revised electricity supply and demand analysis to order more electricity procurement for summer 2022.
Investor-owned utility representatives and scientists this month told the California Public Utilities Commission there is insufficient evidence that California could experience a generation-capacity shortage of more than 4,000 MW next summer during an extreme regional heat wave.
The IOUs and scientists oppose attributing a need to order more procurement solely to the California Energy Commission's revised summer 2022 stack analysis that found the state could be a whopping 4,350 MW short of meeting demand next summer—i.e., more than the capacity of the Diablo Canyon Power Plant. The shortage would occur in a "worst-case scenario" on an extreme heat day and could cause officials to tap into contingency measures, such as backup diesel generators or battery energy storage equipment, to meet demand, the CEC said in a September presentation (see CEM No. 1658).
The CEC's revised summer stack analysis should not be used to order more than 4,000 MW of additional procurement for summer 2022, Pacific Gas & Electric representatives said in an Oct. 7 filing to the CPUC. The revised stack analysis is "insufficient to justify additional emergency reliability procurement for the summer of 2022, especially considering the significant amount of procurement already ordered for that summer," the utility representatives said in the filing.
"PG&E urges caution when solely using the Summer Stack Analysis to derive conclusions about the state of reliability," they said.
The CEC's analysis is a helpful starting point and could be used alongside another CEC forecast known as the "stochastic Loss of Load Expectation analysis," PG&E representatives said.
CEC staff in an Oct. 13 email to California Energy Markets said that during extreme climate-driven weather events, such as extended drought conditions or extreme heat events, additional energy supplies are more likely to come from contingency resources than from additional procurement, as overprocurement could lead to increased costs for ratepayers and environmental impacts.
"The major factor leading to less available resources is the impact of a continued drought on hydro resources," CEC staff told CEM. "The Department of Water Resources anticipates the drought continuing through 2022 and the data they provided to the CEC for the 2022 Summer Stack Analysis reflects a decrease in their hydro projections."
Other experts in the proceeding also urged the CPUC to think deeply about the need to order more energy procurement for next summer based on the revised stack analysis. The stack analysis is not the appropriate tool for identifying resource shortfalls and procurement needs for summer 2022 because it includes controversial assumptions, such as that no economic imports will be available at all to the state, Union of Concerned Scientists senior energy analyst Mark Specht said in an Oct. 7 filing to the CPUC.
Economic imports beyond resource adequacy were not assumed since there is some uncertainty surrounding the availability of imports during a Westwide extreme heat event, CEC staff told CEM.
"Competition for resources becomes increasingly challenging in a west-wide extreme heat event," staff said. "In addition, wildfires could also pose risk to import available as evidenced in July 2021."
Specht suggested that the CPUC should use the CEC's probabilistic midterm reliability analysis to assess grid conditions in summer 2022. The midterm reliability analysis determines whether the state's grid will meet a loss-of-load-expectation industry standard of 0.1 days per year with unserved energy, he said. The analysis studied many grid-reliability scenarios that included different levels of new resource procurement, he said.
The midterm reliability analysis showed that the grid will meet demand in 2023 through 2026, but in 2022, the grid could need about 1,400 MW of capacity to meet the 0.1 LOLE standard, Specht said.
Additionally, the CEC should provide the data that it used in the revised 2022 summer stack analysis, PG&E representatives told the CPUC. PG&E employees found discrepancies between the CEC's stack analysis and its final 2022 net qualifying capacity list: Next summer, the net qualifying capacity list shows about 41,950 MW of "drought adjusted" resources available in July; about 41,602 MW in August; and 40,724 MW in September. However, the CEC's summer stack analysis found less than 40,000 MW of resources available in August and September 2022, PG&E representatives said.
"While this difference is concerning, the lack of available underlying data supporting the Summer Stack Analysis makes it impossible to assess the source of that difference," the utility's representatives said.