Early in 2012, soon after Japan’s Fukushima disaster, two California nuclear power plants called SONGS 2 and SONGS 3 (stands for San Onofre Nuclear Generating Station) shut down for the foreseeable future. This pulled roughly 2,200 MW of base load generation out of the Southern California supply stack. The California System Operator (CAISO) scrambled for several weeks to bring replacement power into the system, and succeeded admirably. The grid held together and weathered last year’s hot summer. Now as the summer of 2013 starts to come into focus, there are lots of questions about the SONGS units –which are still off line – and what California’s overall power generation load will mean for natural gas demand and prices. Today we survey the measures that made things work last year and examine the most likely market developments expected for Summer 2013.
As shown in Figure #1, SONGS are inside San Diego County, within the boundaries of Camp Pendleton.
Figure #1 (Click to Enlarge)
Since the RBN blog is well known for energy-music metaphors, and we are talking mostly about developments in the power markets in the music-centric Los Angeles basin, it seems particularly appropriate that we frame this blog in the context of music content – singles, albums and hit records. So please forgive us if it gets too hokey for you. Now to the topic at hand….
CAISO’s Big Hit in 2012
Due to its population, climate and culture, the LA basin is (unsurprisingly) a huge consumer of power. So much so, it has a lot of its own generation, its own special rules from the CAISO and lately its own unique problems. Let’s think of CASIO as the rock stars of this genre. They had a top selling album in the Summer of 2012 titled “A Summer Without SONGS”, lamenting the series of unfortunate events last year. In January 2012, SONGS Unit 2 went down for maintenance. Several weeks later, Unit 3 was taken offline in an emergency shutdown after tube vibration caused a steam generator rupture. It turns out the same tube vibration problems showed up in Unit 2 as well. Back in 2011, both units were overhauled with new Mitsubishi steam generator (which houses the tubes) technology, hence these findings were somewhat of a surprise. Of course, all of this is happening just a few months after Fukushima, so everyone was thinking super-caution. After several informative filings with the Nuclear Regulatory Commission (NRC) and FERC, CAISO realized they would be without 2200 MW of base load generation within the LA Basin. By the time spring rolled around, they started to put in place solutions to make sure the grid operations were sustainable through the Summer of 2012. Continuing to press our metaphor, the song titles on CAISO’s 2012 hit album included:
- Huntington Unit 3 & 4: These two aging units in the LA basin totaling 450 MW were reactivated. Just before SONGS 2 &3 went offline, these units were decommissioned and were being prepared for dismantlement. They were quickly brought back into service.
- Barre-Ellis Transmission: This was a transmission line serving the LA basin that was already in progress, but CASIO accelerated the work so it would be completed by mid-June.
- Sunrise on My Mind: Another new transmission line called ‘Sunrise’ was also being installed and was expedited. The completion of this work was a major priority to complete by Summer 2012 knowing two SONGS units would not be available.
- Refine Outage Planning: CAISO made sure that any non-essential outages planned for the summer were shifted to further out on the calendar
- Fund Flex Programs: CAISO was implementing a couple of demand response programs called Flex Alerts and CPUC 20/20 that allow end users to turn off when warranted by market conditions. These programs were kicked into high gear.
- Demand Side Management: Similar to Flex Fund, CAISO broadened their demand-side management programs which allow CAISO to curtail deliveries to some customers when necessary. An example of such agreements, CAISO worked with the US Naval Ships down in San Diego, where they would unplug docked ships from the grid and use the onboard generators (similar to when they were out to sea) for their power source.
The combined impact of all of these responses which had to be pieced together in very short order was enough for CASIO to dodge the bullet, and the grid in Southern California weathered the hot summer. This achievement is even more remarkable when you consider that the whole program had to be implemented with effectively one arm tied behind the back of the market. That’s because of something called SCE_PCT_IMP_BG. Catchy name, right?
Back in the fall of 2009, CAISO implemented a constraint called the Southern California Edison (SCE) Percent Import Branch Group (thus SCE_PCT_IMP_BG). The fundamental premise of this constraint is to make sure at least 40% of localized generation is used to meet SCE’s load to ensure the power grid remains stable. Localized meaning within the LA basin. That means that no matter how hard demand pulls on the grid, outside power can only be used to supply 60% of the requirement. Since both SONGS sit within the SCE_PCT_IMP_BG boundary, the loss of 2,200 MW was a major hit. That’s why so much of the focus of CASIO’s 2012 album had to within the Southern California region.
CAISO’s Summer 2013 Album Almost Ready for Release
Things settled down after the summer as California’s demand settled back into more comfortable winter and shoulder-season patterns. But CAISO was working hard to be ready for the 2013 summer season with a new album of what will again hopefully be hit singles.
- Gone are the Huntingtons: Neither Huntington Unit will be producing energy this summer. Instead, synchronized condensers will be put into each unit for voltage support.
- More Gen More Gen: Two new highly efficient gas fired generation plants are coming online soon. These are the Walnut Creek and Sentinel Power Plant. The former is a 500 MW combined cycle unit located in Industry, CA. Its expected start-up date is still not set in stone but some are estimating late summer. The latter is a peaking unit within the SCE_PCT_IMP_BG territory that is also expected to be online by this summer.
- SONGS Unit 2 On My Mind: This is a big swing factor, but it is possible that SONGS Unit 2 could be back in service. Over the past few months, there have been several ongoing discussions between SCE and NRC regarding the potential operation of SONGS Unit 2 at 70% for the summer months. As it stands right now, the target date per SCE would be sometime in early June.
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