If you can’t take the heat…



Over the past several days (June 19th, 2016 – June 22nd, 2016), California has experienced a perfect storm of events causing stress to the electrical grid. A California heatwave has broken record highs, according to the National Weather Service, with temperatures as high as 122 degrees Fahrenheit. Approximately 5,500 commercial and residential electricity customers have experienced blackouts in the Los Angeles area due to peak demand reaching 6,080 megawatts, which is more than 50% greater than a typical June day. This increase in demand spread through the state. Additionally, gas leaks at SoCal Gas’ Aliso Canyon storage facility have left a shortage of fuel for many natural gas generators while extreme drought in the area has depleted hydro reservoirs and increased fire danger. All of these conditions drive prices individually, however their combined impact on generation, transmission and demand have compounded the effects on system-wide nodal prices.
 
The heatwave throughout California can be anticipated in summer months, though the temperature severity in recent days was unexpectedly high. The animation in Figure 1 depicts hourly temperatures in California from June 19th, 2016 through June 21st, 2016. During this same time California Independent System Operator (CAISO) declared a “Flex Alert” requesting consumers to turn off all unnecessary lights, only use major appliances after 9pm and set air conditioners no lower than 78 degrees. Utilities like Southern California Edison (SCE) are also helping to reduce demand by initiating demand response programs which are designed to give additional credit on electricity bills for a curtailment in usage during high demand periods. The heat’s impact on demand can be seen in Figure 2, which shows hourly June demand in the SCE zone year-over-year. Peak demand in the SCE zone on June 20th was 30% higher in 2016 compared to 2015 and was 3,138 MW higher than SCE’s previous June peak record of 20,426 MW from 2013.
 

Figure 1 – Animation of hourly temperatures in degrees Fahrenheit for June 19th, 2016 – June 21st, 2016 – ABB Velocity Suite
 
SCE-TAC Zonal Load - ABB
Figure 2 – Hourly June demand in SCE year over year – ABB Velocity Suite
 
As a result of the aforementioned drought, hydro generation in CAISO fell by roughly 5% from 2010 to 2016. CAISO’s generation needs have shifted to a greater reliance on solar and natural gas to compensate for this decrease. Figure 3 illustrates regional drought conditions throughout the lower 48 United States. Drought conditions also led to an increase in fires in the Southern California region; notably the Sherpa Fire west of Santa Barbara which has affected both infrastructure and generation. Figure 4 highlights the fire’s burn area and notable facilities in the vicinity. This all reduces the generation supply, especially in the Southern California Edison zone.
 
Drought Map - ABB
Figure 3 – Palmer Drought Severity Index for June, 2016 – ABB Velocity Suite
 
Sherpa Fire w Pipes - ABB
Figure 4 – Sherpa Fire Burn Area with Southern California Edison zone and natural gas infrastructure – ABB Velocity Suite
 
The issues are multifaceted though. Recently, the second largest natural gas field in the Western United States, SoCal Gas’ Aliso Canyon facility, stopped operations in February due to a gas leak leading to even more strain on power generators’ gas supply. Aliso Canyon ordinarily supplies 17 local gas-fired power plants, hospitals, and refineries. This increase in demand and decrease in supply has caused the California Public Utilities Commission (CPUC) to consider rotating power outages as the solution.
 
The combined impact from these events can be seen system-wide. Day Ahead Locational Marginal Prices throughout CAISO saw a significant increase due to a spike in the energy component from the normal $40/MWh high price up to $82.06/MWh on June 20th, 2016. Combined heat and other regional issues also pushed the DLAP_SCE-APND zonal congestion prices from its norm of virtually no congestion to over $32/MWh in congestion costs for some hours. Figure 5 shows these price spikes in the Southern California SCE zone during the timeframe of these events. Figure 6 explains the more granular real time pricing impact on specific areas of Southern California. Real time prices rose above $1,200 for various 5-minute intervals at price nodes closest to the Sherpa Fire.
 
DLAP_SCE-APND DAH Components - ABB
Figure 5 – DLAP_SCE-APND Hourly, componentized, day ahead, nodal pricing for June 5, 2016 – June 23, 2016 – ABB Velocity Suite
 
DLAP_SCE-APND RT5 LMP - ABB
Figure 6 – GOLETA_6_N004, GOLETA_2_LN001, DLAP_SCE-APND real time 5-minute LMP prices for June 19th, 2016.
 
California has had its fair share of significant events this year, and the Velocity Suite offers a multitude of methods for analyzing the data related to the energy industry. By being able to visually represent the load, generation and pricing data alongside weather patterns on a time-scale, it’s easy to identify the root cause of significant outliers within the data itself. This has many applications for making decisions within the energy industry, whether it be site-selection, investment opportunity or development potential. All of the charts presented within this report were created using data available within the Velocity Suite. For additional information or questions on how to use tools within the Velocity Suite, please contact Customer Support.
 
 
Author: Velocity Suite Data Analysis Team
 
Sources:
 
Blackout risk raises concerns for Southern California refiners
 
122 degrees: Palm Springs breaks record — and it could get hotter