There’s no doubt about it: California’s decade-long efforts to expand the use of solar, wind, and other renewable energy and improve energy efficiency have enabled the state to significantly reduce its consumption of natural gas for power generation. But the Golden State’s rapid shift to a greener, lower-carbon electricity sector — and its push to shut down gas-fired power plants — has come at a cost, namely an increased risk of rolling blackouts, especially during extended heat waves in the West when neighboring states have less “surplus” electricity to send California’s way. The main problem is that while solar facilities provide a big share of the state’s midday power needs, there’s sometimes barely enough capacity from gas plants and other conventional generation sources to take up the slack when the sun sinks in the late afternoon and early evening. Today, we discuss recent developments on the power front in the most populous state, and what they mean for natural gas consumption there.
The biggest news out of California these days, of course, is the wildfires that have devastated parts of the state and blanketed much of the region in an eerie orange haze. And there’s COVID-19 — no small matter. As if these weren’t enough, another leading concern of state officials, businesses, and individuals alike is the heightened potential for power interruptions. In the midst of a prolonged heat wave last month, the state’s electric grid operator, faced with sky-high power demand and insufficient power supply, ordered rolling blackouts for the first time since 2001. The impacts may not seem huge from the outside looking in — a few hundred thousand customers without electricity for an hour or two at a time — but tell that to the manager of an affected factory, Home Depot, or supermarket, or to parents wanting to prepare dinner on an electric range in their normally air-conditioned home when it’s 104° outside. More importantly, the rolling blackouts confirmed the fears of many that California’s plan to de-carbonize the power sector, while well-intentioned, may be too aggressive and may fail to adequately ensure grid reliability.
As shown in Figure 1, California’s electric utilities, independent power companies, and other power generators have reduced their consumption of natural gas by leaps and bounds over the past eight years as the state ratcheted up its efforts on energy efficiency and renewables. The state’s “power burn” — i.e., gas consumed by combined-cycle, peaking, and cogeneration plants to produce electricity — varies by season and by year, mostly due to weather and air-conditioning needs, but average gas consumption by the electric sector has been declining steadily. Since 2012, when California’s power burn averaged 2.34 Bcf/d in 2012 (blue bar to far left), the electric sector’s gas consumption there has fallen by more than one-third, averaging 1.58 Bcf/d in 2019 and 1.28 Bcf/d in the first half of 2020 (blue bar to far right).
To access the remainder of California Dreamin' - State's Plan to Shift to Renewables Hits a Snag, and Gas-Fired Power Rebounds you must be logged as a RBN Backstage Pass™ subscriber.
Full access to the RBN Energy blog archive which includes any posting more than 5 days old is available only to RBN Backstage Pass™ subscribers. In addition to blog archive access, RBN Backstage Pass™ resources include Drill-Down Reports, Spotlight Reports, Spotcheck Indicators, Market Fundamentals Webcasts, Get-Togethers and more. If you have already purchased a subscription, be sure you are logged in For additional help or information, contact us at email@example.com or 888-613-8874.