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Are There More Blackouts in California’s Future?

Rising electricity demand from air conditioning will exacerbate problems during heat waves.

The Bay Area has definitely felt dystopian recently. Our Covid cases are high, we’ve had heat waves and rolling blackouts, wildfires are only partially controlled, our air quality is bad, our roads are terrible – the list goes on. I’m lucky enough to be healthy, I haven’t had to evacuate and I didn’t experience an outage. But, it’s uncomfortable in my house when the air quality is bad and it’s hot outside. I don’t have air conditioning, so if I open the windows, it gets really smoky inside, but if I keep them closed, our house really heats up.

So, is this the new normal? We’re all hoping Covid fears go away soon, but what about some of the other things? Are they here to stay?

With power outages and heat waves, I fear that the answer is yes, this is likely the new normal. As climate change leads to more heat waves and people like me eventually get air conditioning – both because it is hot and because the outside air is bad – heat waves will lead to higher and higher peak electricity demand. So, unless California regulators step up their games to do something about this, we will have more outages.

Mid-August Outages Exacerbated by Air Conditioning Load

As Severin mentioned last week, California suffered rolling blackouts on August 14 & 15. The short summary is that we didn’t have enough supply to meet demand. We had a heat wave (95 degrees in Berkeley is HOT!) and a lot of Californians turned on their air conditioners. That’s not super unusual, but what pushed California’s system to the brink was the fact that the heat wave extended throughout the West, so California couldn’t import as much power from other Western states as it usually does. Usually when there’s a heat wave in California, the Pacific Northwest or Arizona has a bit of spare power to send our way, but this didn’t happen two weeks ago. 

So, as the sun began to set, the rooftop and grid scale solar stopped generating, driving supply down. Meanwhile, air conditioners kicked into high gear, sucking up electricity to try to cool the homes that had been baking in the sun all day, driving demand up. 

Californians Are Going to Buy More Air Conditioners

As much as air conditioning drove the blackouts, it seems that there are a good number of Californians in the same boat as me – we don’t own air conditioners, at least not yet. Nationwide, 87% of households own air conditioners, while in the Pacific area, including Alaska, California, Hawaii, Oregon and Washington, this number is considerably lower – only 66% of households do (both stats are from the EIA). I haven’t found recent estimates from California, but this paper uses the relationship between temperature and load shapes to infer which households have air conditioning, and puts the estimate at 69% for Los Angeles.

You’ve heard the Twain-ism about cold summers in San Francisco, so historically we haven’t really had much of a reason for AC. With climate change, though, our weather will look more like other parts of the country. Research that I’ve done with Lucas Davis, Paul Gertler and Stephen Jarvis, indicates that higher incomes and hotter weather are big drivers of air conditioning adoption. Median Californian incomes are quite high, so as climate change leads to more frequent and more intense heat waves, more of us will invest in air conditioning.

This is on the residential side. I have not found statistics on the commercial side, but I know of at least one non-residential establishment that does not currently have air conditioning: UC Berkeley. I have heard that is likely to change in the coming decade, and, as I recall from pre-COVID days, when I used to teach and try to do work in hot buildings, there were more and more days when it was pretty uncomfortable. 

Zooming out, research by my colleague Max Auffhammer and Energy Institute alums Patrick Baylis and Catie Hausman shows that increasing temperatures associated with climate change will lead to higher peak demands. While they are not implicating air conditioning directly, it must be the biggest driver of peak electricity demand.

For my household, the main driver to get air conditioning is likely to be poor air quality. Until last week’s series of days with 150-plus Air Quality Index days (“unhealthy”, if you don’t know AQI’s intuitively), I had been lobbying my husband for a whole-house fan to suck in the cool evening air. If that air is smoky, though, we might as well get air conditioning so we can keep our windows closed and rely on the AC’s filters. I suspect that my preferences are more general, but I have not seen research to support that conjecture. This paper suggests that people in Singapore use more electricity when pollution levels are high, although it addresses use rather than adoption of new air conditioners. 

So, I see more AC units in California’s future.

Stretching the Duck’s Neck 

The thing about air conditioning demand is that it ramps up late in the afternoon, just as solar electricity is fading away. The graph below, from the wonderfully titled paper on, “Stretching the Duck: How Rising Temperatures will Change the Level and Shape of Future Electricity Consumption,” makes this point for Ontario, Canada. As more and more people get air conditioning in response to climate change, by the end of this century the projected daily minimum demand will go up by less than 10%, but demand at 6PM at night will go up by almost 25%.

Source: Shaffer and Rivers, Stretching the Duck: How Rising Temperatures will Change the Level and Shape of Future Electricity Consumption

 

A stretched out duck’s neck – if we take the analogy too seriously – starts looking like a swan, graceful and serene. But California with more heat waves and more air conditioning will be anything but. 

This is not an insurmountable problem. Air conditioning load can be flexible, for example, and with time-varying pricing, as Severin was advocating for, customers would have an incentive to pre-cool their homes. But, California regulators will need to closely monitor and anticipate these trends and act before outages become a normal part of California’s summers.

Keep up with Energy Institute blogs, research, and events on Twitter @energyathaas.

Suggested citation: Wolfram, Catherine. “Are There More Blackouts in California’s Future?” Energy Institute Blog, UC Berkeley, August 31, 2020, https://energyathaas.wordpress.com/2020/08/30/are-there-more-b…lifornias-future/

Catherine Wolfram View All

Catherine Wolfram is Associate Dean for Academic Affairs and the Cora Jane Flood Professor of Business Administration at the Haas School of Business, University of California, Berkeley. ​She is the Program Director of the National Bureau of Economic Research's Environment and Energy Economics Program, Faculty Director of The E2e Project, a research organization focused on energy efficiency and a research affiliate at the Energy Institute at Haas. She is also an affiliated faculty member of in the Agriculture and Resource Economics department and the Energy and Resources Group at Berkeley.

Wolfram has published extensively on the economics of energy markets. Her work has analyzed rural electrification programs in the developing world, energy efficiency programs in the US, the effects of environmental regulation on energy markets and the impact of privatization and restructuring in the US and UK. She is currently implementing several randomized controlled trials to evaluate energy programs in the U.S., Ghana, and Kenya.

She received a PhD in Economics from MIT in 1996 and an AB from Harvard in 1989. Before joining the faculty at UC Berkeley, she was an Assistant Professor of Economics at Harvard.

48 thoughts on “Are There More Blackouts in California’s Future? Leave a comment

  1. Why did CAISO order blackouts BEFORE their own reserve triggers were met? Per NYT, “the first-stage alert began at 6 p.m., when California ISO’s operating reserves stood at 12 percent, said David Marcus, an energy consultant and former adviser at the California Energy Commission. Its standard for the first stage had been 8 percent, according to the grid operator’s 2019 resource assessment. The second stage began at 6:25 p.m., when its operating reserves stood at 9.59 percent, Mr. Marcus said. California ISO listed that stage in its assessment at 6 percent. “The final stage, 3, the rolling blackouts, began at 6:30 p.m., when operating reserves dipped to 8.9 percent but still above the 3 percent level that the operator listed last year, Mr. Marcus said.”
    Regarding the future, no one has mentioned that replacing your gas furnace with electric heat pump space heating also gets you air conditioning–with a highly energy efficient heating/cooling system. I got rid of my home gas hook-up in 2018, and was rewarded by a wonderfully cool house and clean air during the heatwave…

  2. As you suggest, Shaffer and Rivers (Stretching the Duck) may be taking the metaphor too seriously. The Duck cartoon illustrates net demand. This one is just demand, with a minimum around 6 a.m. and a max around 7 p.m. Climate change induces a much bigger increase in the max than the min, implying steeper mean ramping. Presumably, variance increases as well, implying a (partial derivative) natural gas increase in the optimal energy mix after accounting for pollution.

  3. We seem to ignore the fact that California is importing its shortfall in firm capacity.
    The shutdown of dispatchable plants in CA, such as SONGS, Diablo Canyon, Inland Empire, etc. does not imply that we can run the grid purely on renewables and some peakers. Instead, we are simply leaking that capacity out to other, less restrictive states and re-importing it daily, either from hydro resources in the north, Palo Verde in AZ, or coal and gas pants elsewhere.

    For those in California, taking a hard look at our electricity bills and asking why our retail rates are only second in cost to Hawaii, should give us an indication of whether we are headed in the right direction with extremely high penetration of renewables, both in terms of physical infrastructure and economics. Why are we paying such prices for a progressively more unreliable grid?

    • Why are we paying so much? Because the Legislature and the CPUC sold us out to the utilities and have failed to hold them accountable for signing too many of the wrong kind of power purchase agreements. And the CPUC has never held the utilities accountable for their mismanagement of the nuclear construction projects. That largely explains the costs of generation.

      But that’s only half of the cost problem. The utilities also have mismanaged their distribution and transmission systems to drive up costs. We have very poor oversight of our utilities, which is why pushing for even more centralization in those utilities is a recipe for even higher costs.

      • “And the CPUC has never held the utilities accountable for their mismanagement of the nuclear construction projects. That largely explains the costs of generation.”

        Given the capital cost of Diablo Canyon will be paid off by 2025, that’s great news. Costs for clean nuclear electricity will drop precipitously, right? Time to fire up re-licensing again, before it’s too late!

    • “For those in California, taking a hard look at our electricity bills and asking why our retail rates are only second in cost to Hawaii, should give us an indication of whether we are headed in the right direction with extremely high penetration of renewables, both in terms of physical infrastructure and economics.”

      Yeah! If wind and solar are so cheap why are California’s electric rates so high? It doesn’t seem to make sense.

      • Robert: The reason why wind and solar add considerably to California power bills is the “hidden” cost of renewables integration. Why is renewables integration so costly? Part of the answer is the increased natural gas consumption required.: “Staff Paper – Thermal Efficiency of Natural Gas-Fired Generation in California 2019 Update,” California Energy Commission, June 9, 0220.
        https://efiling.energy.ca.gov/GetDocument.aspx?tn=233380&DocumentContentId=65895
        The sentence “Ramping and cycling result in increased fuel consumption.” is found on page 19 of 36 in the paragraph below a heat rate trends chart describing how intermittent solar and wind cause ramping and cycling in the natural gas fired generation that firms those generation means. The analysis in the reports from earlier years is not as forthright.
        See also this 2016 article. “Turns out wind and solar have a secret friend: Natural gas,” by Chris Mooney, August 11, 2016, The Washington Post, http://tinyurl.com/Natural-Gas-Secret serves as an introduction to:
        “Bridging the gap: Do fast-reacting fossil technologies facilitate renewable energy diffusion?” by Elena Verdolini, Francesco Vonab, and David Popp, Energy Policy 116 (2018) 242–256, https://doi.org/10.1016/j.enpol.2018.01.058
        ______________
        A note to Mr. McCann: Your Diablo Canyon cost study you reference below likely included billions of dollars for un-needed cooling towers. Diablo Canyon’s once-through cooling system is already designed to minimize sea life entrainment. The economic value of the entrained sea life is a few hundred dollars per year, since most is eggs and larval forms. Most of the mortality of this sea life is from the filter feeders such as barnacles and mussels that line the 10 foot by 10 foot intake tunnels. The filter feeders grow so well that the intake tunnels must be closed off and scraped clean every nine months or so. This loss of eggs and larva does not harm the biological productivity of the coastline, as it is comparable to the actions of filter feeders on a mile or so of rocky California coastline. The federal 316(b) regulations for once-through cooling provide 1. That any biological benefits must be commensurate with any mitigation costs. 2. They also recognize that nuclear power does not increase air pollution like the natural gas combustion to firm solar and wind power does. The mitigation precedent established by SONGS was also adopted by DCPP. The mitigation is to pay a few million dollars each year to construct artificial reefs to compensate for any claimed biological harms. As a consequence of the accelerated depreciation PG&E has been taking after their application to close DCPP was approved on January 11, 2018 by the CPUC, costs to operate DCPP will diminish sharply after 2025. As noted below, DCPP is needed to maintain California grid reliability. DCPP produces the equivalent of more than five (5) Hoover Dams of electricity safely, reliably, and cost-effectively – without any air pollution. SONGS also needs to be recommissioned. The nonprofit Californians for Green Nuclear Power, Inc. (CGNP) continues its legal fight to keep DCPP running past 2025. Stay tuned for details.

        • For both Carl Wurster and Gene Nelson:
          As I explained California’s high electricity rates are explained entirely by decisions and contracts signed a decade and more ago. It is composed entirely of nuclear power plants (i.e., Diablo Canyon) and pre-2015 renewables contracts. These alone amount to over $3.5 billion a year out of PG&E’s $5 billion portfolio cost. Another $1 billion is hydropower which produces at less than $60/MWH. The remaining $500M is composed of conventional PPAs and UOG plants. This latter component is where the costs for renewable integration is buried (and its a tiny portion of this cost component because the fuel costs have been declining for the last decade as renewables have increased.) At the extreme outerbound (and even that is amount probably an order of magnitude to high) your claimed integration costs can only explain 10% of the overall portfolio costs, and only 5% of the overall rates. On the other hand, Diablo Canyon explains 30% of the portfolio costs.

          Dr. Nelson, you’re opinion about the importance of water quality regulation on the California coast is irrelevant. The fact is that the State Water Board has chosen to address this environmental impact and impose these requirements on power plants. You cannot change that decision here and as with all other environmental regulations, you must include those regulations in conducting your cost analysis. The CPUC has NO jurisdiction over this environmental issue and must comply with SWRCB regulations, so it appropriately assented to inclusion of compliance when considering PG&E’s cost assessments.

          • Richard, you continue to maintain this fiction based on no publicly available information, and after being commissioned by the very entity which seeks to raze the plant ASAP. The fact you attempt to assign debt from pre-2015 renewables / hydropower contracts, conventional PPAs, and UOG plants to Diablo Canyon Power Plant hardly lends credibility to your analysis.

            FYI Diablo Canyon is a nuclear power plant on the Pacific Ocean, not a hydroelectric dam. (8-0

            Re: Gene’s comment: whether SWRCB or CPUC picked up the ball to aid fossil fuel interests, corrupt legislators, and their analysts is irrelevant.

            SWRCB decided in 2014 that Diablo Canyon’s OTC system was a “chronic stressor to the state’s coastal aquatic ecosystems,” despite a Bechtel analysis concluding the system, which circulates 2 billion gallons of water/day, was responsible for 710 lbs. of entrained fish per year. The study estimated a price tag for the two cooling towers at $9.9 billion; so assuming each fish weighs 1 pound, that meant PG&E would have had to spend $9.9 billion to save 2 fish/day.

            Obviously, the OTC ruling had nothing to do with preserving the state’s coastal aquatic ecosystems – and just like the every manufactured threat from the plant’s inception, it had everything to do with Shell, Sempra, and Chevron’s domination of California electricity.*

            *Some money may have been set aside for duping renewables advocates, but they’re cheap.

      • “Yeah! If wind and solar are so cheap why are California’s electric rates so high? It doesn’t seem to make sense.”
        A question to which no wind, solar, battery, efficiency, V2G, G2V, gas-to-hydrogen, or compressed-air/flywheel/gravity-storage advocate has an answer.

        Though the short answer would eliminate the premise: “The full cost of integrating wind and solar on an electric grid is not cheap, it’s crazy-expensive”, it flies in the face of decades of pro-renewables indoctrination. So assuming the advocate remains to learn and hasn’t disappeared in an apoplectic rage (stay with me), the question becomes “Why are wind and solar crazy-expensive?”

        The short answer to that question is entropy, requiring the advocate to invest at least 45 minutes reading its Wikipedia entry. Granted, entropy and thermodynamics are not easily grasped by laypeople, especially those who have managed to avoid a class in high school physics. So an analogy may be in order.

        The elegant explanation of a physicist-friend went something like this: “It is theoretically possible to survive, and even prosper, financed by coins found at the beach. But though a sufficiently-inspired and determined beach prospector will find an endless supply by scouring the landscape most frequented by visitors with heavy equipment modified to sift for coins, it’s not hard to understand why he/she will never become rich. ‘The juice ain’t worth the squeeze.'”

        Similarly, it’s theoretically possible to carpet vast swaths of California desert with solar panels, and string them together with thousands of miles of transmission, and erect forests of wind turbines, and store energy in massive banks of batteries, and generate enough electricity to reliably power the CAISO grid – but it will never, ever happen. And if it still doesn’t seem to make sense to your advocate, you can confidently assume it never, ever will.

      • California’s rate are so high because PG&E and SCE mismanaged their procurement by front loading acquisition of renewables and signing for terms that were too long. The utilities blew away their opportunity to gain from the declining technology costs that they initiated by locking in extremely high priced PPAs prior to 2015. Along with signing for 30 year terms instead of 10 or 20 that would have been sufficient, and rolling out staged annual auctions reflecting incremental requirements, they staged a few auctions from 2009 to 2013 that met all of their needs through 2030. In addition, they ignored those of us who pointed out that their demand had stagnated since 2006 (I have filed such analyses in both utilities rate cases since 2009), and PG&E explicitly and expressly ignored the rise of CCAs (evidence for this came from memos revealed in the PCIA OIR case). These PPAs constituted the majority of the stranded costs that drive these utilities’ high rates. And thanks to AB57 passed in 2002, these utilities have not been held accountable for mismanagement and the CPUC has not put in place the incentives that were authorized under AB57. I write more about this in the case of PG&E here: https://mcubedecon.com/2019/10/28/pge-has-cost-california-over-3-billion-by-mismanaging-its-rps-portfolio/

  4. Catherine, If California families like yours and mine are considering air conditioning, we should encourage them to spend the small premium to have it be double duty AC that cools them in summer and heats them in winter. This two way air conditioning is often referred to as an air source heat pump. By selecting these heat pumps they can decarbonize most or all of their winter heating too (depending on the electric portfolio carbon-free policies of their portfolio manager). Here’s a guide that might help folks plot out their home health, comfort, safety and decarbonization plans. https://fossilfreebuildings.org/wp-content/uploads/2020/04/SF-Guide-4-10-2020.pdf ( I got my window heat pump 2 years ago after learning about it from page 38. )

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