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California system operator issues call for 10,000MW of new capacity by 2026

April 06, 2021

S&P Global Market Intelligence ($):

To keep California reliably powered amid its clean energy transition, the California ISO, the state’s primary transmission grid operator, is calling for at least 10,000 MW of new capacity to enter service between 2023 and 2026.

“Critically, this capacity should be effective after sunset,” attorneys for the grid operator said in March 26 comments to the California Public Utilities Commission that the regulator published April 1.

The vast majority of California’s current fleet of solar power plants, totaling more than 14,100 MW of large-scale resources and over 10,000 MW of distributed small-scale systems at homes and businesses, is not equipped with energy storage that would allow the plants to function after dark. While solar helps to power the nation’s largest state economy with more than 80% renewable energy resources at times during the middle of the day, California remains heavily dependent on fossil fuels when demand for power spikes in the evening.

Poor planning to meet this challenge of matching increasingly wide supply and demand swings contributed to California’s first rotating outages in two decades in August 2020, according to a joint report from CAISO and state energy regulators. Since then, several large-scale lithium-ion battery peaker plants have come online, foreshadowing a possible important new asset for stabilizing the state’s grid.

CAISO’s request for regulators to “take immediate action” came in response to an administrative law judge’s call for feedback on midterm reliability issues and proposed resources additions. The grid operator cited PG&E Corp. subsidiary Pacific Gas and Electric Co.’s planned retirement of its 2,240-MW Diablo Canyon nuclear plant, the state’s largest source of zero-carbon electricity, by the end of 2025 as well as the ongoing phaseout of aging natural gas-fired power plants that rely on seawater for cooling by 2023 as creating a dire need for new resources.

“At this point, all existing resources — including existing thermal resources — will continue to be needed for reliability purposes unless there are sufficient incremental resources to provide adequate replacement capacity and energy,” CAISO attorneys said. The grid operator recommended that the “accelerated procurement” begin with a minimum of 3,150 MW of incremental capacity by Aug. 1, 2023, to allow the aging gas plants to retire as planned.

[Garrett Hering]

More ($): Calif. grid operator calls for 10 GW of new capacity ‘after sunset’

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