Summer Assessment shows continued improvement for resource availability

The California Independent System Operator has published its 2024 Summer Loads and Resources Assessment and our analysis once again shows an improved picture on the grid as we head into hot weather and our most challenging time of the year.

In our analysis of the ISO grid, conditions look significantly better going into the summer of 2024 than they have in the past few years. For example, our analysis focuses on meeting a standard in the electricity industry that a bulk power system should experience no more than one event every 10 years where we need to call on emergency plans to avoid loss of load. Last year’s Summer Assessment showed there was enough capacity to leave us with a modest surplus of resources needed to meet that 1-in-10 standard.

This year, thanks primarily to significant amounts of new resources added to the grid, including more than 5,400 megawatts (MW) expected to have been brought online in just the first six months of this year, we meet the 1-in-10 industry standard with 2,550 MW to spare. For additional context and to show how far we have come and how quickly, our 2022 Summer Assessment found the grid 1,700 MW short of meeting that standard.

California continues its transition to a carbon-free grid with increasing renewables and energy storage resources on the system. The addition of new supply to the CAISO system will help the ISO manage challenging grid conditions typically experienced in evening hours in summer months.

Average to slightly above average hydro conditions and a softening of the load forecast for peak demand identified in the California Energy Commission’s 2023 Integrated Energy Policy Report (IEPR) also contribute to the more positive outlook. Together with new resources added to the grid, this is more than enough to offset a reduction in supply from generator retirements and generating plants moved into the state’s Strategic Reliability Reserve.

Our findings provide a solid factual basis for going into the summer with optimism for maintaining reliability as the weather – and demand for electricity – begin to heat up between now and September and into October.

Publishing our Summer Assessment and sharing the results with state regulatory agencies, industry participants and stakeholders is one of the many activities the California ISO undertakes each year to be transparent and to prepare for summer system operations.

In response to changing conditions and feedback we have received from the state and others, our analysis has evolved and now includes two distinct products:

One is a probabilistic assessment of existing and planned resources for 2024 that I have already touched on. It is based on the California Public Utilities Commission’s Preferred System Plan adopted in February 2024 and adjusted to reflect current expectations.

The other product is what’s known as a multi-hour stack analysis which examines sufficiency of the available energy fleet on peak days for each summer month. Results for that stack analysis were also encouraging, showing that expected resources are sufficient to meet forecasted demand, plus an 18.5 percent reserve margin for unexpected contingencies, for all summer months.

The stack analysis also indicated that there is a surplus of at least 3,500 MW over forecasted demand, with that 18.5 percent reserve margin, during what we call the peak net load hours of 6 p.m. until 10 p.m. in the month of September. That’s when California can experience some of its hottest weather and highest demand for electricity. It’s also the time of day when available solar energy is ramping down as the sun sets but demand is still high due to high temperatures.

As our Summer Assessment also notes, the state continues to build up its efforts to make emergency resources available to our grid operators with enhanced demand response programs, implementing the Strategic Reliability Reserve and other initiatives.

This is all encouraging news, but as we all know, Mother Nature often has her own ideas.

As our Summer Assessment notes, weather conditions such as temperature, cloud cover and precipitation variables affect the ISO market and system operations, including hydro and renewable production and demand. During summer, temperature is a key driver of load conditions, particularly when we have extreme and widespread heat events, like the 10-day record heat wave we experienced in September 2022.

For June through August 2024, forecasts continue to show the probability of above normal temperatures across the West, with the highest probabilistic chances across the Desert Southwest, and lower chances of above normal temperatures in coastal locations, especially Southern California. Forecasts also show an increased chance of above normal temperatures across the Desert Southwest this August and September.

We do a good job predicting the weather, but of course we can’t control it. Any power system can be vulnerable to extreme and prolonged weather emergencies. But based on our extensive 2024 Summer Loads and Resource Assessment and all the hard work and analysis that went into it, we are heading into this year’s most challenging months in decidedly better shape than we have in years past.