Gas capacity dogs California grid amid heat

OREANDA-NEWS. July 13, 2015. A recent statewide call for power conservation in California underscores the state's continued reliance on natural gas for power generation even as it works to increase its use of renewable energy to 50pc by 2030.

The California Independent System Operator (ISO) last week issued the first Flex Alert in two years as the western US baked under triple-digit heat, citing natural gas capacity issues in southern California. Up until that point, the state had avoided the gas availability and pipeline delivery problems that other US power grids, mainly in New England and the midwest, had experienced during extremely cold weather.

The ISO issued the conservation call for 30 June and 1 July when the above-normal heat was projected to push peak-hour electric demand above 44,700MW, up 12pc from the 40,040MW peak set on 29 June, but 5pc below the grid agency's summer peak forecast of more than 47,000MW.

As temperatures rise above 90°F (32°C), it takes more megawatts to serve the same number of homes, leading to strain on generators. The grid also faced a limited supply of power imports from Pacific northwest states because of extreme heat there, reducing its projection for a healthy summer surplus.

The heat, coupled with a warning posted by SoCalGas early on 30 June of an emergency localized curtailment affecting certain electric generators in the Los Angeles Basin, prompted the issuance of the Flex Alert, said ISO spokesman Steven Greenlee.

SoCalGas "told us they had congestion and capacity issues," said Greenlee. "That also played a role" in the decision to issue the public call for conservation.

Officials from SoCalGas did not return calls for comment.

"We positioned our fleet accordingly," Greenlee said, in case SoCalGas was forced to curtail gas delivery to power plants in parts of Orange and San Diego counties.

Day-ahead wholesale power prices, which rose 51pc in northern California and nearly 44pc in southern California leading up to 30 June, tumbled when the Flex Alert was issued.

Gas prices had increased nearly 3pc at SoCalGas Citygates and 4.4pc at PG&E Citygates and state border points into the SoCalGas system, but fell on 2 July.

A break in the weather, implementation of demand-response programs by the state's utilities and public conservation kept power demand well below the 44,000MW level forecast by the ISO, Greenlee said, but gas demand was high.

Pipeline flow at SoCalGas Citygates on 30 June and 1 July was 3.3 Bcf, up by 35pc from the 30-day average of 2.45 Bcf, according to Ventyx data.

Flow at the PG&E Citygates was 2.5 Bcf on 30 June and 2.6 Bcf the next day, 25pc above the Ventyx 30-day average.

Government data shows utilities across the west withdrew 1 Bcf (28mn m?) of gas from storage to satisfy power demand in the week ended 3 July, a period when they typically injected 11 Bcf into storage, according to the US Energy Information Administration.

As solar and wind generation expand in California, the need for gas-fired generators to respond quickly is critical to balance rapid changes in renewable output. Solar output tends to peak early in the afternoon before power use peaks hours later.

During the peak-hour on 1 July, gas supplied 62pc of California's electric load while wind and solar supplied 14pc of demand.

"We got lucky in that there was some monsoon cloud cover from the desert southwest that came into California and kept temperatures lower, but it also added to the variability of solar resources that we had to contend with," said Greenlee.

SoCalGas canceled the localized curtailment watch on 2 July.