What’s Ailing California’s Electric System?
California made headlines for all the wrong reasons recently with widespread rolling power outages in the middle of a heat wave and a pandemic. These blackouts were not an accident—they were intentionally scheduled by the grid operator, the California Independent System Operator (CAISO), due to a shortage of resources available to keep the lights on.
The California blackouts led to a frenzy of hot takes and finger-pointing based on instant diagnoses of the problems. The situation is like a Rorschach test on which people superimpose their preconceptions about energy. Opponents of renewable energy, including President Donald Trump, blame the outages on California’s use of solar and wind to decarbonize their power supply. Others have jumped to the conclusion that this must be a recurrence of Enron-type market manipulation as in the 2001 energy crisis. Still others have offered silver bullets based on whatever they are selling.
It is important to diagnose the problem correctly so that we don’t administer the wrong medicine. While a full examination should be done, some causes can preliminarily be ruled out. There is no evidence so far that market manipulation was afoot. There is also no evidence that California’s solar and wind generation did not perform as designed. Wholesale markets in other regions of the country are delivering increasing amounts of renewable energy and keeping the lights on.
I think California has four “preexisting conditions” that need to be addressed to avoid this happening again.
1. Lack of clear accountability for having the resources to keep the lights on.
In some regions of the country, electric distribution companies directly invest in power plants under the supervision of state regulators. In others, regional markets use an auction system to buy enough resources to keep the lights on. I personally prefer market structures, but either system can work if it is clear who has the responsibility.
In California, the roles of the CAISO and the state regulators to keep the lights on are quite tangled. CAISO has the job of dispatching power plants but has little authority to ensure they get built. Lining up enough resources is largely under the supervision of state regulators. In other words, the buck stops nowhere. This should be remedied through the actions of the California legislature and the Federal Energy Regulatory Commission, which regulates CAISO.
2. Lack of resources to balance solar and wind power.
California leads the nation in solar generation, and also uses a lot of wind generation. These carbon-free resources help reduce the climate impacts of burning fossil fuels. But unlike conventional power plants, they cannot be turned on and off as needed. By design, their availability depends on the sun and wind at any given moment. They can work well in conjunction with resources that can be turned on as needed, especially in the evening when the sun goes down. These “balancing” resources can be gas-fired plants, pumped water or battery storage, hydroelectric power, or the collective actions of homes and businesses to move their consumption to different times of the day. California does not have enough of these resources. See problem #1—someone needs to be in charge.
3. Closing disfavored resources before opening the new ones.
It is hard to site and build new energy resources, including carbon-free resources, anywhere in the country. Even in regions where there is strong political support for clean energy to fight climate change, it often doesn’t translate to people allowing wind turbines or a high-voltage transmission line to be built anywhere near them.
California has been decisive about what resources it doesn’t want anymore, including many of its gas-fired power plants and its last nuclear power plant. It has been much slower to actually construct resources to take their place. In the past three years, California has closed 5,000 megawatts (MW) of gas generation in anticipation of building 3,000 MW of battery storage that is still on the drawing board. In a heat wave, when every resource is needed, this gap in resources came home to roost.
4. Operating in a silo.
California is a large state, but it is not an island. It is part of a larger region whose resources could help to balance those available in the state, helping both California and the West as a whole. While CAISO and its neighbors have shared resources when they have extra, this does not help when resources are scarce. California would benefit from a regional market that took advantage of different weather, time zones, and resources to keep the lights on at least cost. California legislators have repeatedly considered legislation to change CAISO to allow regional operation, but have preferred in-state control. I believe that decision should be reexamined to take California into the future.
The real cure
When something goes wrong, it is easy to make snap judgments, demonize technologies you don’t like, or suspect foul play. Such false diagnoses about what ails California’s power system only encourage snake oil solutions. Putting in the hard work on big structural issues like the ones I identified is the real cure. California surely does not want to—and should not—back off its climate goals. But it should take a hard look at who is responsible for getting the resources in place to keep the lights on, and then make the tough decisions to do so. Its citizens deserve nothing less.
Cheryl A. LaFleur was a commissioner at the Federal Energy Regulatory Commission from 2010 through 2019, and chaired the commission from 2013-2015 and in 2017. She is currently a distinguished visiting fellow at the Columbia University Center on Global Energy Policy.