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Daily on Energy: California scrambles to keep the lights on as heat wave crests

Washington Examiner logo Washington Examiner 9/1/2022 Jeremy Beaman, Breanne Deppisch
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CALIFORNIA BRACES FOR HEAT WAVE: California’s Independent System Operator declared an “energy state of emergency” yesterday and issued its first of two “flex alerts” asking residents to voluntarily curb power use during peak demand hours, as regulators brace for a record-breaking heatwave expected to last through next week.

The flex alert system asks residents to voluntarily conserve electricity by turning up their thermostats to at least 78 degrees and to avoid charging electric vehicles or using large appliances between 4 and 9 p.m., when solar power generation decreases and the grid is most strained.

Regulators warned consumers could face a string of voluntary power cuts in the coming days, when the heat wave is expected to bring triple-digit temperatures to many parts of the state. Demand is expected to peak on Monday, when electricity demand is slated to exceed 48,000 megawatts.

“This is going to be a sustained event that's going to take sustained focus and sustained participation,” CAISO CEO Elliot Mainzer told reporters on a call yesterday. “We are going to be pulling out all of the stops … to develop a number of contingency measures and new sources of supply."

MEANWHILE, ON THE SUPPLY SIDE: California lawmakers also passed legislation yesterday to extend the life of Diablo Canyon, the state’s last remaining nuclear power plant, by another five years. In a speech hours earlier, Gov. Gavin Newsom told lawmakers that keeping Diablo online was a crucial part of a strategy to “future-proof” California.

“This is critical in the context of making sure we have energy reliability going forward,” Newsom said of Diablo Canyon, which provides roughly 9% of the state’s electricity.

Extreme heat touched off rolling blackouts just two years ago: Though the state has since added roughly 4,000 MW of capacity, regulators warned yesterday that they are not out of the woods yet amid persistent threats from high heat and drought conditions, which have a twofold impact of both increasing the state’s electricity demand while also limiting the amount of power that can be generated by hydroelectric dams.

Drought conditions also exacerbate the risk of wildfires, which can damage transmission infrastructure and can prompt operators to shut off power. California narrowly avoided such a blackout last summer, after the Bootleg Wildfire on the California-Oregon border damaged interstate transmission lines and temporarily halted some imports.

California is “import dependent” for energy supplies and receives about 25% of its electricity from other states, Severin Borenstein, a professor at UC Berkeley's Haas School of Business and a member of the CAISO board of governors told Breanne. That’s a problem, he said, because the “starting to see these West-wide heat waves” that impact states’ ability to sell power to California.

“We used to be able to pretty reliably count on some part of the West having excess capacity they can sell, and that is not as true anymore,“ Borenstein added.

In order to augment strained capacity, California lawmakers passed a bill this summer giving the state the authority to extend the life of existing fossil fuel-powered plants or to build new temporary power plants in the event of a supply emergency, such as the one declared yesterday.

“Paying to keep old resources around as backup for bad days is like buying insurance,” Mark Dyson, a managing director of the carbon-free electricity program at RMI, told Breanne. “You hope you never have to use it.”

Ultimately, he said, “it’s a matter of delivering megawatts to customers during peak events. And the economics of doing that with different kinds of resources should be the primary driver of the decisions to keep or not keep these assets.”

Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email or for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.

INTERNATIONAL INSPECTORS ARRIVE AT ZAPORIZHZHIA: A U.N.-led team of international inspectors arrived today at the Zaporizhzhia nuclear power plant in Ukraine, operators of the state-run nuclear plant confirmed, where they will begin carrying out safety and security inspections for the first time since the facility fell under Russian control in March.

The group, led by Director-General Rafael Grossi, decided to carry out the inspection despite renewed shelling in the area. Earlier today, Ukraine’s state nuclear operator Enerhoatom said Russian shelling had taken one of its two working reactors offline.

“There has been increased military activity, including this morning until very recently,” Grossi said, noting that the group decided to carry out its mission after being briefed by Ukraine’s military. In “weighing the pros and cons and having come so far, we are not stopping,” he said.

Grossi told reporters this week that a top priority at the plant will be to set up a permanent monitoring mission of IAEA officials. Doing so is “indispensable to stabilize the situation, and to get regular, reliable, impartial, neutral updates of what the situation is there,” he said.

But it is unclear whether the two countries will allow that amid heavy fighting in the area. Ukraine has accused Moscow of using the facility as a “cover” to protect troops and launch attacks.

EUROPEAN COMMISSION WEIGHING ENERGY PRICE CAP OPTIONS AHEAD OF EMERGENCY MEETING: European Commission officials gathered in Brussels to begin weighing options to cap soaring energy prices and reduce demand within the bloc before leaders convene in Brussels later this month for an emergency meeting.

Such steps could include a bloc-wide gas price cap, as advocated for by Italy, Belgium, and the Czech Republic. (Other countries, including France and Greece, are pushing for a plan that decouples the price of electricity and gas.)

Mechthild Woersdoerfer, the deputy director general of the European Commission's energy department, told Reuters that leaders are also weighing a potential bloc-wide effort to tax companies’ windfall energy profits, though such a step would require approval from all 27 member countries.

The Commission could also take steps to restructure its electricity market design, though Woersdoerfer described that step as a “longer-term” measure. "There is work on emergency measures on electricity prices. There might be also something on demand reduction for electricity," Woersdoerfer said at a meeting of the European Parliament's energy committee.

European Commission President Ursula von der Leyen will outline leaders’ ideas on capping energy prices at a speech on Sept. 14.

DAY 4 OF CRISIS – JACKSON RESIDENTS TOLD TO SHOWER WITH MOUTHS CLOSED: The situation in Missippi’s capital is quite bad, with the latest being that officials are telling residents to keep their mouths closed while showering and to avoid giving pets water from the tap, according to CNN.

The water crisis is in its fourth day after flooding damaged the main water treatment plant and caused it to fail.

Republican Gov. Tate Reeves said yesterday the state is trying to prevent more damage and to keep the water flowing, even though it is dirty: “Our immediate priority is to have running water, even temporarily sacrificing some quality standards where we absolutely have to, to fulfill basic sanitary and safety needs.”

SHADY AND DISTURBING – LUKOIL CHAIRMAN DIES AFTER FALLING OUT WINDOW: Ravil Maganov, the chairman of Russia's second-largest oil producer Lukoil, died today after falling from a hospital window in Moscow, Reuters reported, citing sources familiar with the situation.

The sources said it was highly unlikely that the 67 year-old committed suicide.

Several Russian energy industry figures have died suddenly in the months since the invasion of Ukraine.

The day after the invasion, Gazprom executive Alexander Tyulakov was found dead in his garage near St. Petersburg.

And in April, Sergei Protosenya of the liquefied natural gas producer Novatek (NVTK.MM), was found dead with his wife and daughter in a horrific scene at a villa in Spain.

STITT DISMISSES CREDITS FOR WIND POWER: Republican Gov. Kevin Stitt of Oklahoma, one of the top wind power producing states, says he doesn’t favor the credits for wind power included in Democrats’ Inflation Reduction Act, although he acknowledged they would likely spur new business.

“Do those federal tax credits tip the scale? Absolutely. There’s going to be all kinds of industries that pop up to chase those tax credits and those dollars,” he said in an interview with the Financial Times. “But if you ask me do I think we need those tax credits, no I don’t.”

Oklahoma produces the third most wind power of any state. But it’s also a major oil producer and a deep red state.

LAST COAL PLANT IN HAWAII SHUT DOWN: The AES Corporation coal plant, Hawaii’s last coal-fired plant, closed Thursday after 30 years in operation, the Associated Press reports.

Hawaii’s legislature passed a law banning coal power in 2020, and the state has a mandate for 100% renewable energy by 2045.

Closing the coal plant without renewable alternatives in place, though, is expected to mean that the state will burn more oil in the meantime, which is more costly and not much less dirty.

The Rundown

New York Times Portugal could hold an answer for a Europe captive to Russian gas

Bloomberg Surging copper demand will complicate the clean energy boom

Financial Times US climate law imposes first greenhouse gas fee on oil industry

Washington Post Jackson, Miss., shows how extreme weather can trigger a clean-water crisis



1 p.m. The White House, the EPA’s Office of Water, and the American Association for the Advancement of Science (AAAS) hold a virtual discussion titled. "Regional Reflections on Green Infrastructure and Nature-Based Solutions: Southwest." Register for the virtual event here.


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Original Author: Jeremy Beaman, Breanne Deppisch

Original Location: Daily on Energy: California scrambles to keep the lights on as heat wave crests


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