California ISO Survives the Summer with No Blackouts; Battery Energy Storage Beginning to Play Larger Role

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Stoel Rives - Renewable + Law

The California ISO held its final Summer 2021 Readiness Update call on September 24.  As reported on the call, the California ISO managed to get through summer 2021 without any load-shedding events, in contrast to last summer, when load-shedding events occurred on two days in August.  The California ISO; California energy regulatory agencies, including the California Public Utilities Commission (CPUC) and California Energy Commission (CEC); and the Governor’s office have spent considerable effort to avoid any outages for both this summer and summer 2022.  However, as California ISO Senior Vice President and Chief Operating Officer Mark Rothleder explained, California experienced less extreme weather this summer, which helped the state avoid outages.  Although July was challenging, due to a West-wide heatwave and transmission impacted by the Bootleg Fire, August and September were more mild.  In 2020, load peaked at 47,121 megawatts (MW) on August 18, at 15:57.  In 2021, load peaked at 43,982 MW on September 8, at 17:50.  By comparison, the California ISO’s highest peak was 50,270 MW in 2006.

As illustrated by the timing of the load-shedding events last year, the California ISO’s greatest challenge is meeting load in the late afternoon and early evening, when solar generation comes off the system as the sun goes down.  Battery storage can be an important part of the solution—charging during the day when there is plentiful solar generation and energy prices are low, and then discharging during the evening peak, when solar is no longer available.  California ISO now has about 1,500 MW of battery energy storage on line, and expects battery energy storage to grow to 3,000 MW by the end of the year.  Battery energy storage is also participating in the California ISO markets as expected, charging during the day and providing energy in the evening when it is most needed.  However, much more energy storage is needed, and likely to come on line.  The CPUC’s current draft Preferred System Plan estimates that 14,751 MW of energy storage will be needed by 2032 to meet California’s climate goals.  The California ISO’s interconnection queue currently has approximately 147 gigawatts (GW) of battery energy storage in the queue, an increase from 68 GW in the queue in 2020.

Although the California ISO has made it through this summer with no load shedding, significant challenges still remain.  California is now entering its wildfire season, with its attendant public safety power shutoffs.  The California ISO has indicated that it will continue to accept Capacity Procurement Mechanism offers for the period through the month of October, in order to procure any available additional capacity.  And, the CEC’s latest stack analysis shows the potential for a shortfall of between 200 MW and 4,350 MW next summer under extreme weather events.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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