NCEL Blog

Why Renewables Did Not Cause California’s Rolling Blackouts

November 17, 2020 | This blog was written by Dylan Macy, NCEL’s Communications Fellow. Dylan is a recent graduate of Pitzer College with a B.A. in Environmental Policy and Media Production.

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Overview

During the week of August 15, California experienced a record-breaking heatwave, spiking energy demand as residents turned up their air conditioning for relief from the scorching temperatures. As the need for electricity intensified, so did the stress on California’s electrical grid, causing the state’s energy grid operator — California Independent System Operator (CAISO) — to call for rolling blackouts in fear of simply not being able to meet the increased demand. The August rolling blackouts were the first supply-related power outage of this magnitude since the 2001 energy crisis. Questions and theories rightfully arose as to what led to this unprecedented stress on the Golden State’s energy grid. 

One of the immediate victims of political and industry finger-pointing was California’s increasing dependence on renewable energy. But, as follow-up investigations of the blackouts are showing, renewable energy is not inherently unreliable or the central issue that led to California’s energy supply shortages. Rather, the state’s current transitional energy infrastructure, intricate market forces, and miscommunications between power supply stakeholders converged to exacerbate electrical supply shortages brought on by record heat

What Caused the Blackouts?

In a statement issued to California Governor Gavin Newsom, the heads of California’s top energy agencies plainly stated that the dependability of renewable energy was not to blame for the blackouts. In CAISO’s Root Cause Analysis report, three broad causes are linked to the August blackouts:

  • a record-breaking climate-change-induced heatwave that caused an upsurge in electricity demand,
  • California’s clean energy goals have outpaced construction and energy storage, and
  • incorrect day-ahead energy market predictions which exacerbated shortened supply conditions.

Climate Change and Energy Supplies

Regional heat waves, similar to the one in August, are increasing in frequency and intensity due to climate change. This trend, caused by the burning of fossil fuels for energy, highlights the need for clean energy to reduce emissions and worsening heat conditions. California, along with 10 other states, has taken the important step of committing to 100% fossil-fuel-free energy by or before 2050. But construction of renewable energy infrastructure, such as wind and solar farms, and energy storage facilities still lags.

Beyond storage capacity, the heatwave affected more traditional energy sources. While there were unexplained reductions in wind energy output, natural gas plants also struggled to keep up — they literally couldn’t take the heat. Large natural gas plants have cooling systems which are sensitive to hot weather, and at least one plant “tripped” during the heatwave. A scheduling miscommunication caused another natural gas plant to ramp down production just as demand was increasing. Between gas plants going offline, scheduling errors, and some output reduction from wind, California’s fleet collectively lost enough electricity that would have powered up to 3.1 million homes.

Day-Ahead Energy Market Activity

Some experts have argued that energy supplies were more than sufficient, but that market predictions were flawed. Analysis by state energy agencies has revealed that energy providers under-scheduled electricity demand, despite warnings from CAISO that supply shortages were likely. The CAISO report also found that “convergence bidding”, a process by which traders such as large banks and electric utilities bet on the difference between day-ahead and real-time power prices, played a role in misrepresenting the impending supply shortages. Traders, which included the nation’s largest electric utility company Pacific Gas and Electric Co. (PG&E), estimated that demand would be much lower than the estimates outlined by grid operator CAISO. This miscalculation of California’s electricity demand the day before the first rolling blackout by the power market played a large role in electric utility companies under-scheduling demand, leading power plants to sell and export what they believed to be surplus energy to other states. Unfortunately, one of California’s primary strategies for dealing with electricity shortages — importing energy from neighboring states — was rendered useless as other Western states struggled with increased demand due to the region-wide heatwave. 

Miscommunication and misrepresentations of energy supplies between grid operators and market-based interests echo the 2001 Enron energy crisis, in which market-manipulation caused state-wide rolling blackouts. California’s demand response protocols were insufficient to prevent the crisis. Demand response programs incentivize customers to reduce energy consumption when supply is low and demand is high. When smart technologies are enabled, utilities or commercial entities can remotely reduce power to smaller appliances. Though California does use demand response, the recent blackouts indicate that more updated methodologies, such as buildings that can interact with the grid through a process called demand flexibility, are worth exploring.

Preventing Rolling Blackouts in the Future

There were many contributing factors to the August blackouts. At a fundamental level, a record-breaking, region-wide heatwave worsened by climate change led to tightened energy supplies in California. But what further induced immense stress on the Golden State’s electrical grid was poor scheduling and a deflated estimate of demand from the power market, sending mixed signals to utilities and energy providers as to how much electricity they would need to avoid power outages. More renewable energy infrastructure and storage would have mitigated the supply shortages, but renewables themselves surely were not the root cause of the August rolling blackouts. 

The heatwave, and subsequent rolling blackouts, offer a warning to electrical grid operators, especially in the age of climate change. As populations grow, the climate continues to change, and more people rely on air conditioning to keep them cool during intensified heatwaves, states should consider how their climate adaptation plans can support grid stability. Market reform may also be needed to maximize communication between energy agencies, power providers, and consumers.