Despite numerous proposed power generation projects, California faces a seven-year window (2017-2024) in which an adequate amount of natural gas-fired power is uncertain without costly upgrades to an aging fleet of coastal facilities, according to a long-term strategic plan by the California Independent System Operator (CAISO).

The state grid operator’s latest planning document shows that there is an overabundance of proposed generating capacity (68,659 MW) exceeding the state’s all-time peak demand by thousands of megawatts, but only 10,199 MW of the proposals are gas-fired capacity, and much of the existing gas-fired generation is under increasing pressure from climate change and once-through cooling restrictions.

This could become crucial beginning in 2017 when the state would need to rely more on the conventional or gas-fired sources of baseload power to accommodate increasing amounts of renewable energy and decreased out-of-state coal-fired generation. In the CAISO queue of 451 projects seeking grid connection 439 are for renewables, with nearly 40,000 MW of solar and 16,000 MW of wind power.

Further complicating the strategic planning are the current natural gas wholesale prices, which dampen the economics of developing both new renewable and gas-fired generation, CAISO said.

“[A] complication is that current market prices do not cover the cost of operating an existing [gas-fired] power plant, let alone the cost of developing a new facility,” stated the CAISO plan, “Reliable Power for a Renewable Future.” A further complication is that existing plants currently are ineligible to compete for long-term procurement contracts with utilities for new resources. These are the same plants that are needed at this point into the early 2020s, said regulators.

“Many fossil fuel [almost all gas] power plants within the CAISO grid are at the end of their economic and physical lives,” said the report. “Thirteen of these plants, representing about 17,500 MW, and the state’s nuclear facilities, must retrofit, repower or retire by 2020-2024, respectively, to comply with state once-through cooling policy restricting the use of coastal waters for plant cooling.”

Some of the plants, CAISO said, are in areas where various transmission restrictions and bottlenecks exist, which means they are needed to ensure reliability for local power needs.

CAISO’s strategic document suggested that the grid operator would have to work with the state’s energy and environmental agencies to assure the existing gas-fired capability can keep running, including helping find ways to ensure that there is “appropriate financial support for continued availability of existing generation facilities necessary to complement new renewables.”

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