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Faced with out of control wildfires and high summer temperatures, Gov. Gavin Newsom ordered further reductions of energy use at peak times on the grid by expanding and expediting programs already underway. The July 31 executive order also waives pollution limits on diesel and other fossil fueled generation, and on heated wastewater expelled from gas-fired power plants cooled with sea water. He also called for accelerating new clean energy projects.

This directive is similar to his order issued just two weeks ago when the grid operator called for conservation to keep the grid flowing in the face of the expanding Bootleg Fire in Oregon and intense heat. At that time, Newsom also waived air quality protections placed on power generation and allowed ships to unplug and their engines to burn diesel while in port. The ports are surrounded by struggling, heavily polluted communities.

Newsom stated that “strict compliance” with laws and regulations “would prevent, hinder, or delay appropriate actions to prevent and mitigate the effects of the conditions of extreme peril.” But his directive also acknowledged the need "to end the vicious cycle in which generating energy contributes to the very climate-impacted emergencies that threaten energy supply."

Air pollution restrictions were suspended two hours prior to any designated grid emergency and for the following one hour.

The California Air Resources Board is directed to develop a plan by Nov. 15 to mitigate the health and environmental impacts of increased emissions resulting from the pollution waivers.

“We will be carefully watching to see if mitigation is done in a meaningful way," Bill Magavern, Coalition for Clean Air policy director, said.

Backup incentives for the big energy users

To incentivize reductions at large industrial plants and agricultural and pumping facilities, the governor directs the Department of Finance to pay providers $2 per kWh during emergencies and 75 cents per a kWh for arranging supply curtailments a day ahead of time. The 0.75 cents/kWh is to be paid for being on standby, regardless of whether the grid operator calls an emergency.

Industrial facilities in the Base Interruptible Program can comply and simply fire up their backup systems, many of which are fossil fired. But demand response providers say their offers, which are cleaner, are not valued and have been largely ignored.

After last summer’s rolling blackouts, demand response providers complained bitterly about hurdles to market involvement and inadequate compensation, leaving offers of megawatts to help shore up the grid in never-never land.

Averting a 3,500 MW shortfall

The governor’s latest order is directed at the California Public Utilities Commission, California Energy Commission and California Independent System Operator. It tells them to accelerate approvals of new clean energy supplies, in an attempt fill the 3,500 MW shortfall in supplies on roasting days as the sun is setting.

But there are big doubts as to whether this order will actually help keep the grid balanced at moments of peak stress.

On yet another occasion earlier this year, the utilities were ordered by the CPUC to bring on more supplies this summer using gas power plant upgrades, power supply contract expansions, and delays in the retirement of aging gas plants.

In late June, the CPUC and CEC warned that the drought has caused a loss of 1,000 MW of hydropower and that 300 MW of gas plants expected to be online wouldn’t be operating. Making matters worse is that there will be delays in the incremental resources expected to come online as part of the CPUC’s resource adequacy program this summer. “The CPUC recently received notice that several new project will be delayed by one to several months, and in some cases will push online dates past the summer window,” it stated.

In response, CAISO will again procure additional capacity under its tariff authority for July and August 2021.

Resulting new resources?

The CPUC and CAISO said it was too early to estimate the amount of new megawatts the governor’s order might prompt.

CPUC Spokesperson Terrie Prosper said in an email that the commission anticipates “getting significant support from demand response, energy efficiency programs that are aimed at net peak, battery storage, and, if needed, additional fossil resources that can continue to bridge the gaps as cleaner resources are developed.”

In terms of transmission, “key is unlocking a more diverse fleet of resources to meet our needs, and aligned with where development activities are actually moving forward,” CAISO Spokesperson Anne Gonzales said in an Aug. 3 email. How much comes to fruition will depend on the resource mix pursued, she added.

The investor-owned utilities support the governor's efforts.

Pacific Gas & Electric is expanding its programs to reduce energy demand during critical hours, according to Ari Vanrenen, utility spokesperson. While she too declined to estimate the negawatts gained from the new executive order, she said that PG&E is working to “optimize our hydroelectric generation this summer to generate electricity when it is most needed during the peak hours on the peak demand days,” and increasing the efficiency of its natural gas units to increase output on the hottest days.

Southern California Edison said it will have approximately 1,000 MWs of utility-scale energy storage online this summer. “This is more than 15 times the amount of in front-of-the-meter energy storage than SCE had online during the summer 2020," Paul Gallagher, utility spokesperson said.