CAISO Analysis: What Part do Renewables Play in Solving California's Reliability Issues?

Written by:
Fiona Zhou

5/11/2023

Two months after the unprecedented September 2022 heat wave in California, CAISO posted their analysis, which attributed the success of maintaining grid reliability to their increased Resource Adequacy (RA) procurement. The procurement includes 3,500 MW of battery storage, market enhancements put in place over the past two years, and close coordination with regional utilities, load-serving entities, and other members in the market. The report also cited necessary market enhancements to improve the management of increasingly frequent, extreme, and long heat events. The original summer market performance report can be found on CAISO’s website.

On September 6, 2022, at 4:58 p.m., demand on the CAISO grid reached an instantaneous gross peak record load of 52,061 MW. At 6:58 p.m. the net peak load was 45,141 MW (net peak load is the load after solar production reduces to zero, thus representing the maximum stress on the grid). That day the ISO observed the highest ever hourly average load of 51,479 MW, and demand within the Reliability Coordinator footprint in the West also saw a record load of 130,920 MW. System demand had exceeded 50,000 MW on the ISO grid only twice before: once on July 24, 2006, and again on September 7, 2017.

"During an uninterrupted 10-day stretch of triple-digit heat that saw only minimal nighttime cooling and record use of electricity, the ISO maintained reliability throughout the event without having to use rotating outages to balance supply and demand. The ISO issued Flex Alerts calling for voluntary consumer conservation…regional cooperation also contributed to maintaining reliability…about 6,500 MW of net energy imports from neighboring energy providers and balancing authorities were made available to the grid when it was most strained. Another 1,000 MW of energy was transferred to the grid via the WEIM, a real-time market with participants throughout the western United States."

According to CAISO’s analysis, increasing renewable energy resources such as solar and wind play an important role in meeting electricity demand during the summer months. On August 29, 2022, CAISO noted a record 68.5% of total electricity generation came from renewable energy resources. However, increasing renewables alone isn’t sufficient to solve the challenge CAISO faced over the Summer of 2022. In hours when there wasn’t enough electricity generation to meet peak load, energy storage resources played a key role in meeting peak demand by providing electricity during times of high demand and low supply. Energy storage is particularly helpful during the late afternoon and early evening, when solar energy production is typically lower and electricity demand is higher. Ultimately, energy storage ensures that there is sufficient electricity supply during peaks, which avoids reliability incidents and maintains grid stability.

Figure 145 presents the aggregate state of charge across the fleet of storage resources in the RUC process (day-ahead) and RTD (real-time) market.

Besides meeting the grid demand where renewable generations can’t, battery storage is also the primary resource for demand response program, which is a critical player in balancing the ISO system under tight supply conditions. According to CAISO, the timing and magnitude of market-integrated demand response and non-market resource utilization coincided with the severity of the heat wave. At the start of the heat wave from August 31 to September 4, daily market demand response schedules ranged between 34 MW and 344 MW while non-market resources ranged from 174 MW to 902 MW. The latter half of the heat wave saw larger amounts of resources being called upon with September 6 having the largest amount of market demand response and non-market resources called at 1,267 MW and 1,216 MW, respectively at 6 p.m. Over the heat wave, the largest amounts of these resources were typically called between 6 p.m. and 8 p.m.

Given that demand response programs have proven to be successful in improving grid stability and reliability, CAISO is working to expand the DR program, with a focus on developing new technologies and supporting market structures. CAISO is also exploring ways to increase participation in the program by a wider range of energy consumers, including residential, commercial, and industrial customers. For example, the Demand Side Support Program (DSGS) launched in the second half of 2022 is offering incentives to a wider range of electric customers that provide load reduction and backup generation compared to the traditional DR program. The DSGS program is designed to attract more resources to the state’s energy reserve in preparation for the extreme events in the upcoming years.

Overall, CAISO is committed to expanding the DR program as part of its efforts to transition to a cleaner, more sustainable energy system. Battery storage with its ability to shift demand and supply energy during critical grid needs has an increasingly important role in reducing peak electricity demand, improving grid reliability, and providing greater flexibility to the energy system—ultimately benefiting energy consumers throughout California.

Contacts

Endurant Energy

Ryan De La Cruz
VP, Microgrid Development
rdelacruz@endurant.com

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