California sticks with coal exit despite grid concerns

OREANDA-NEWS. June 24, 2016. Electricity from coal-fired power plants in other states helped keep the air conditioners running in southern California as the region struggled with record heat. But in a few years, that will no longer be the case.

California law prevents the Los Angeles Department of Water and Power (LADWP) and other municipal utilities from renewing contracts to import power from out-of-state coal-fired plants, which will essentially end coal electricity in the state by the middle of the next decade. Even with recent concerns about grid reliability, lawmakers in the state have little interest in reversing course on coal.

Southern California electricity grids have been stressed by the combination of very hot weather and limited natural gas supply after halting a four-month long gas leak at the Aliso Canyon storage field in February. On 20 June, as temperatures in some parts of the state rose above 100°F and electricity demand stood at 44.5GW, the California Independent System Operator (ISO) and the LADWP warned grid stability in southern California was at risk. As temperatures moderated, electricity demand dropped to 34.5GW today.

During the record heat, consumers were asked to set air conditioners to 78°F or higher and only use major appliances after 9pm "to help avoid power outages."

Utilities also increased coal-fired power purchases early this week. But the gains were short-lived.

Capacity levels at Intermountain Power Agency's (IPA) 1,800MW coal-fired Intermountain Power Project were at 86pc on 19 June and 78pc the next day. By 21 June, the plant was back at 50pc capacity. The plant, which is in Utah, generally sells half of its power to LADWP.

"The units are not necessarily at full load, but the unloaded capacity is available as needed," LADWP said. The utility gets around 17pc of its electricity from coal plants in other states. Two years ago, electricity from coal accounted for 40pc of the utility's mix.

Electricity from IPA's plant is particularly attractive to some California utilities because of the direct-current transmission line that runs from the plant directly to the southern California power grid, which makes the power relatively inexpensive and easy to access.

But even in the wake of the Aliso Canyon gas leak that was discovered in October 2015, California has been steadfast in its commitment to move away from coal.

Some critics see coal as a contributor to the record heat. Coal plants release carbon dioxide in the atmosphere most scientists see as warming global temperatures.

Some coal executives do not agree, and most have asked state and federal governments to do more to foster investment in emissions control technology and other measures to keep coal in the mix.

The California ISO and LADWP earlier this year proposed stepping up use of hydropower resources and curtailing certain physical natural gas and wholesale power sales, among other ideas, to bolster electric reliability this summer, while governor Jerry Brown's moratorium on gas injections and restrictions on withdrawals from Aliso Canyon remain in place.

California's emission performance standard does not outright ban coal generation, but plans to comply with the restrictions will bring coal's share of the state's electric power mix down to 3pc by 2024 and zero shortly after that, the California Energy Commission said. In 2014, coal generation made up 6pc of the state's electricity mix.

The California ISO does not use any electricity from coal-fired power plants. It said it cannot foresee circumstances where electricity generated from coal would be used in its system.

The grid and LADWP said they are investing heavily in renewable energy. Coal is not the only other fuel source to suffer. California utility Pacific Gas & Electric (PG&E) said this week it would close the Diablo Canyon nuclear plant, which serves 3mn customers, by 2025. It said state policies supporting renewable energy, energy efficiency and storage negated the need to extend Diablo's operating licenses.

Natural gas has been playing a bigger role in California power generation as coal has been phased out, accounting for 57pc of the California ISO's energy mix on 10 June and about 39pc of the LADWP's energy mix this year. The state's suspension of gas injections and withdrawals is expected to remain in place well into the end of this year because field owner SoCal Gas has successfully completed integrity testing of only nine of 114 injection wells at Aliso Canyon.

That curtailment of gas supply could lead to rolling blackouts on 14 or more days this summer in southern California if daily gas use exceeds forecasts, state agencies have warned. But the concern is doing little to make state legislators and regulators change their minds on coal. When IPA's last contract with a California utility expires in 2027, coal-fired power sales to the state will be over.