Trends in Electricity Consumption, Peak Demand, and Generating Capacity in California and the Western Grid, 1977-2000

1. Trends in Electricity Consumption, Peak Demand, and Generating Capacity in California and the Western Grid, 1977-2000 Jolanka V. Fisher Timothy P. Duane University of California, Berkeley

2. Purpose of the Study • Debate about California crisis in 2000-2001 focused on internal supply-demand balance • Availability of imports is critical to the operation of the western (WSCC) grid • Temporal and spatial (co)variation in WSCC supply and demand are important • What is the temporal relationship between the regulatory regime and new capacity?

3. Data Collected and Analyzed • annual consumption, installed capacity, peak demand, gross state product, population, and utility vs. non-utility installed capacity for each state: 1977-1998 • summer/winter peak demand: 1995-2000 • PWP-085 addendum (December 2001) for California: all of the above for 1998-2000

4. Limitations of PWP-085 Study • coarse spatial and temporal variation in peak demand and consumption patterns • operating characteristics and fuel sources of installed capacity are not distinguished • only California data for 1998-2000 period • no data for critical 2001 period in crisis • only a descriptive study offering limited exploratory insights; no statistical analysis

5. Primary WSCC Findings • annual consumption grew 64% in 1977-1998 (from 350,000 GWh to 570,000 GWh) • non-coincidental summer peak demand grew by 10% (13,000 MW) in 1995-1999 • temperature-driven variation in demand • new utility capacity additions dropped off throughout the WSCC in 1988-1989 • the ratio of new installed capacity to new annual consumption declined about 10%

6. Primary California Findings • far fewer kwh per $ GSP and per capita • 1.7%/year growth vs. 3.5% (rest of WSCC) • decreasing share of summer peak demand • increasing share of winter peak demand • non-utility = half of new installed capacity • new capacity/new annual consumption ratio increased about 10% (still below WSCC’s) • consumption: 3.7% (1999) + 5.0% (2000)

7. Detailed changes in peak electricity demand and capacity

8. Peak demand changes

9. Summary of peak demand changes • Between 1982 and 1998, the Southwest experienced phenomenal growth in peak demand. Its share of the peak rose by 50%. • In recent years, the Southwest has exhibited significant growth in peak summer demand, rising nearly 40% in just 5 years. • The Northwest also experienced large absolute increases in peak summer demand. • The Southwest had significant increases in peak winter demand, rising by over 30% in 5 years. • California exhibited a surprisingly large increase in peak winter demand, accounting for nearly half the increase (though its share of the peak is only a third).

10. Peak incidental demand by region, 1982-1998 Source: Western Systems Coordinating Council

11. Peak annual incidental demand by region (megawatts) Source: Western Systems Coordinating Council

12. Peak summer incidental demand by region (megawatts) Source: Western Systems Coordinating Council

13. Peak winter incidental demand by region (megawatts) Source: Western Systems Coordinating Council

14. Capacity changes

15. Summary of capacity changes • Capacity additions dropped off for most states around 1989. • Looking only at utility capacity, California’s installed capacity per annual consumption ratio decreased over the last 2 decades. • The inclusion of QF capacity doubles the total capacity increase of California over the last 2 decades. • When QF capacity is included, California’s new installed capacity per new annual consumption ratio was greater than every state except Montana, Utah, and Wyoming.

16. New utility capacity by state, 1977-1997 Source: Department of Energy

17. New utility capacity during five-year periods by state, 1977-1998 Source: Department of Energy

18. Utility and QF capacity in California, 1977-1998 Sources: Department of Energy and California Energy Commission

19. New utility and QF capacity in California, 1977-1997 Sources: Department of Energy and California Energy Commission

20. Non-utility capacity by state, 1998 Sources: Department of Energy and California Energy Commission

21. New installed utility capacity per new annual consumption ratio by state, 1977-1998 Sources: Department of Energy and California Energy Commission

22. Supply < Demand = Crisis? • “California didn’t build any new power plants in the 1990s”: 5,058 MW added • California constrained demand growth to half the annual WSCC rate in 1977-1998, but its consumption jumped in 1998-2000 (decline in 2001 puts growth back on track) • Excess capacity throughout the WSCC was eaten up by increased demand everywhere • Temporal changes altered exchange patterns

23. Implications for the WSCC • managing demand growth is essential due to increasing summer peak demand in the Pacific Northwest and Desert Southwest • shifts in timing of sub-regional demand (winter/summer) reduce complementarity • operation of existing installed capacity and need for new capacity is now different than historic arrangement due to these shifts • transmission system plays a different role

24. Future Research Topics • cause of California’s increasing winter peak • demand-management options in other states • fuel sources, availability, and operating characteristics of existing and new capacity • transmission system constraints on trades given emerging new sub-regional balances • greater spatial and temporal resolution • using the above to model 2000-2001 system