Electricity prices for Californians are spiking, but so is the danger of blackouts—both planned and unplanned.
Exceptional drought forecasts for this summer prompted PG&E to warn earlier this month that it might need to implement more rolling blackouts. The utility added, however, that they would likely last less than last year’s.
Then, last week, the California Independent System Operator issued a so-called flex alert, which effectively means it asked people to use less electricity between 5 pm and 10 pm because of heightened energy consumption during that time of day.
Last year, RealClear Energy’s Robert Bryce wrote this week, electricity prices in California jumped by 7.5 percent. This was the highest price hike for electricity across the States and seven times the average for the country. This means that as of end-2020, Californians were paying 70 percent more for electricity than people living in other states. At the same time, the security of their energy supply is increasingly questionable.
A more severe than usual drought in the state this year has depleted reservoirs and lakes, including the ones feeding some of the largest hydropower facilities. This means lower output from hydropower stations. This may well force the state with ambitious emission-reduction targets to rely more on its remaining natural gas-powered plants for baseload electricity supply.
These problems, which are set to deepen with time, have their roots far in the past, according to a recent New York Times interview with Ed Hirs, an energy fellow at the University of Houston.
According to Hirs, decades ago, California swam in excess generation capacity that sat idle for most of the year because of the mild climate. To reduce this capacity overhang, the state began closing these power plants and replacing them with wind and solar farms—and with imports.
To date, the expert noted, California imports some 35 percent of its electricity.
“That’s a big problem, because now it’s not just California’s grid reliability you have to worry about, it’s your neighbors,” Hirs said. “That’s what happened last August: The heat wave got everybody.”
By Charles Kennedy for Oilprice.com
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