May 10, 2021

California Faced with Big Decision on Grid Reliability in 2021

2 min read

California has to make a crucial decision in the next few days on whether it go ahead and back the large-scale power plants as well as batteries to avoid a repetition of the rolling blackouts in August 2020 with the summer coming or opt for the use of behind-the-meter resources like batteries as well as the demand response.

The California Public Utilities Commission (CPUC) has taken bold steps in discovering supply-side solutions. Still, the stakeholders, including Google Nest and Enel X, among others, are calling for the same efforts to be made in the bid to allow for the behind-the-meter flexibility.

A ruling was made last week by CPUC requesting the three leading utilities owned by investors in the state to inflate their supply-side capacity by August of 2021. This effort by CPUC was rolled out to prepare for the likelihood of a heatwave hitting the whole region and pushing the state’s grid past its limits. To avoid this, the CPUC is faced with options like the expansion of the power plants already available, stockpiling new utility-scale battery capacity, or contracting resources from outside the state.

There has been a show of worry from the critics to the supply-side approach as they are of the notion that the large-scale plans by the CPUC will not be functional by the August deadline given by the CPUC. This failure to meet the deadline would prompt the use of utilities in the state known for its aggressive objectives of going green to contract natural-gas-fueled power facilities to expand their role in meeting demand. The downside to this is that the facilities would be overworked during the heatwave, which is the same problem that caused several gas-fired facilities to go offline last August.

During an interview, Ed Smelof, the director in charge of the grid integration at the Vote Solar, stated that there is still uncertainty on whether the utilities will go on to use highly polluting resources like the back-up generators instead of sourcing for carbon-free resources as stipulated in the CPUC’s loading order regulations. Mr. Smelof further cited the lack of specification in the cost statements, the contract term’s operating characteristics, and whether the project was set for 2021 only or other coming years.

New approaches have been made available by the emergency reliability order at CPUC to acquire the value of demand-side flexibility, and a good example is coming up with an Emergency Load Reduction Program, which is meant to offer out-of-market compensation for resources that will be availed during a crisis like the ones faced during last August’s heatwave.

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