“NV Energy Asks Customers to Conserve Energy Today Between 2 and 9 pm.” Those words, in a heavy black font on a yellow background, were at the top of my local electric utility’s website on the morning of Wednesday, August 19. The West’s electricity grid was stressed: with near- record high temperatures everywhere, there just were not enough power plants to keep up with demand. I turned off my lights and air conditioner.
A lot of Nevadans did the same thing, and we were able to avoid rolling blackouts like those that had occurred in California. But as the immediate risk of blackouts in Nevada recedes, many people are asking what caused the Western power shortage and what policymakers and consumers can do about it.
Extreme heat, everywhere
Usually in the West, when it is hot in one place it is cooler somewhere else. But this mid-August heat wave has been notable for its large footprint: from Seattle to Death Valley, people experienced record or near-record high temperatures. On a day like Wednesday, August 19, when recorded temperatures reached 111 degrees at Las Vegas’ airport, NV Energy would usually be able to call upon other power plants in the region to supplement its own, using the day-ahead energy market. But in the days before August 18th and 19th, the market more or less dried up. All the available power plants in the region were being used in their local areas to cope with the heat-related high-demand for electricity. When demand is high and extra supply is low, the grid is just a bit of bad luck away from a blackout.
Conservation, energy efficiency, and flexible demands saved the day
How did NV Energy cope? They put out that broad call for customers to conserve energy on Monday evening. Spokespeople fanned out to local media to spread the word. The utility activated its demand response programs, where customers get paid by NV Energy to install a thermostat that allows the utility to ramp down air conditioner use on days where electricity market prices skyrocket or when extra capacity is needed. Key account managers, the people who develop relationships with large customers like industrial plants or Strip casinos, exhorted these customers to conserve.
While the above actions were obvious and out in the open, a quieter, long-term effort also had a big impact. NV Energy has for years run energy efficiency programs that make it cheaper for customers, large and small, to choose efficient options, by doing things like buying down the cost of LED lighting in stores, or giving incentives that ensure new commercial buildings are built efficient from the start. Demand would have been higher on Tuesday and Wednesday had this energy efficiency effort not taken place over the years. Even so, NV Energy’s energy efficiency programs have been way too small since the financial crisis. Each year, the utility saves about half of the electricity each year that programs in leading states do. Rather than increasing their efforts, NV Energy is currently proposing to cut the energy efficiency budget by around 10 percent. This was a bad idea before last week—saving energy is in most cases cheaper than building a power plant—and it looks like an even worse idea now, when it appears that customer actions, and energy efficiency programs, provided the flexibility Nevada’s system needed to keep electricity flowing.
What about the next heat wave?
California’s grid operators and energy regulatory agencies will be doing a full root-cause analysis of the state’s rolling blackouts, which, as serious as they were, were much less extensive than those in the 2000-2001 California energy crisis or the Northeast Blackout of 2003. Their preliminary analysis points to the dearth of spare capacity in the West and inadequate replacement of retired power plant capacity. Getting enough replacement capacity to ensure reliability is made harder because of the increased fragmentation, between traditional utilities and California's Community Choice Aggregators, of the responsibility to secure capacity contracts. If California builds more capacity, or takes actions that make it easier for customers to adjust demand in times of stress, it will mean there are more power plants to go around next time.
Even if we adequately address climate change, extreme heat is baked into the West’s future, because of the fossil fuels we have already burned. Grid and electricity resource planning needs to take into account future weather and model how various configurations of the power system cope with combinations of grid disturbances, so we can buy enough supply- or demand-side resources for critical days. A fully integrated Western energy grid would also help, because it would allow easier and cheaper coordination of emergency power system reserves across a Balkanized system.
The experience of last week should bring new respect to energy efficiency, demand response, and demand flexibility. In a well-insulated apartment building like mine, the temperature inside remained basically comfortable even when I turned off the air conditioner. Better insulating our building shells and replacing traditional air conditioners with air source heat pumps, as my colleague Merrian Borgeson discussed in a recent blog, would reduce cooling-related electricity demand—the source of skyrocketing demand on hot days. With better insulation, more customers would be able to turn up their thermostat, turn on a fan, pull down the blinds, and “ride through” a time of grid stress in surprising comfort. Demand flexibility—automatically managing electricity demands like lighting, space conditioning, and water heating so they “turn down” when electricity prices rise and “turn up” when wind and solar resources are plentiful—is a relatively cheap potential technology for ensuring reliability. But it is not being used at scale. States and utilities in the West need to invest in demand flexibility to better manage heat waves like the ones we’ve just seen.
This one was a freebie for Nevada
Nevada is getting through this mid-August heat wave without blackouts, thankfully. But we may not be so lucky the next time if we don’t act. Let this be a demonstration of the extra work we need to do to ensure cheap, clean, reliable electricity in a warming climate.