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NewsData's "People in Power" is an exciting new biweekly podcast that explores issues in the energy industry, featuring expert guests from a wide range of backgrounds. Hosted by veteran energy journalists Jason Fordney and Abigail Sawyer of California Energy Markets and including appearances by writers from sister publication Clearing Up, People in Power will explore trends such as development of a Western wholesale electricity trading market, the transition to a more electrified world of new infrastructure and transportation, renewables integration and reliability, wildfire response and mitigation, and many other topics. "People in Power" draws from an unprecedented pool of expertise and insight in a way never seen before! It's available on all major podcast platforms as well as at www.newsdata.com.
Intro:
Welcome to NewsData's Energy West, a podcast about the energy
industry today and where it's going tomorrow.
Dan Catchpole:
Hello, I'm Dan Catchpole, reporter with NewsData's Clearing Up.
And with me is my co-host, the editor of NewsData's California
Energy Markets, Jason Fordney.
NewsData covers the energy sector in California, the Northwest
and beyond like no one else.
And we're looking at some of our top stories.
But first, Jason, how are you doing?
Jason Fordney:
I'm great, Dan. How's it going today?
Dan Catchpole:
Pretty good. Pretty good.
Nothing really special going.
We had a heat wave up here, and it's cooled down.
I've spent a few days just trying to keep the kids cooled off.
We don't have AC up here because we don't get that hot that
often.
But, you know, if summers keep getting these heat waves, I might
have to rethink that at some point.
Jason Fordney:
Yeah, it spells trouble for the power grid when we have those
west wide heat waves so.
Keep your fingers crossed for summer.
Dan Catchpole:
Yeah, and that changing climate trends, that's changing climate
trends are part of what's driving a lot of long term volatility
and interesting times ahead for the energy markets, the
wholesale market, especially in the West, in northwest
California and the West.
And we recently hosted a conference on the wholesale power
markets along with CJB
Energy Economics.
I have to say the speakers had some really fascinating insights
here about volatility in the natural gas markets is not
leaving anytime soon, and that is just going to be something
we're going to have to live with.
And things like the Enbridge pipeline explosion in 2018 really
exposed how brittle the West's aging delivery infrastructure
is. Beyond that, the Northwest hydropower system, it's been this
kind of just solid, reliable thing,
and it still is.
But the reality is it's getting tighter and tighter and tighter.
And we've heard it time and again that the Northwest is moving
from a surplus industry or
sector to having to rely on exports a lot or imports a lot more.
So, you know, as one speaker said, where's that new flexibility
going to come from?
You know, there's a lot of talk about things like energy storage
and batteries, but that's great for a few hours.
And also the price declines and batteries have kind of flattened
out a bit, as another speaker
mentioned. So, I mean, this is just some of the, so just hitting
like a small handful of the
insights. It was a really fascinating conference.
But one of the things that we talked about, or they talked
about, of course, was resource adequacy.
And you've got some news coming out of the California Public
Utility Commission about that.
Jason Fordney:
Yeah. CPUC at their meeting last week took some actions to
maintain grid reliability at the local level,
along with some other measures aimed at resource adequacy.
CPUC at the meeting approved a proposed decision from
administrative law judges regarding resource adequacy.
Local capacity allocations for 2023 to 2025.
Also addressed in the rule making are flexible capacity
requirements for 2023.
Refinements to the state's RA program and the adoption of
Southern California Edison's 24 hour slice reform track
framework with modifications.
The California Independent System Operator, which conducts a
local capacity requirement study that serves as a basis
for the RA program, estimates that the capacity needed for all
local areas to ensure long term reliability is
25.4 gigawatts for 2023 and then climbing slightly for
2024. In the proposed decision, the ALJs found that modifying
the RA measurement hours to align with CAISO's
revised availability assessment hours is reasonable.
The availability assessment hours are intended to correspond
with the hours in which high demand conditions typically occur
and thus when RA risk resources are most critical to
reliability.
That's the proposed decision from the CPUC.
Dan Catchpole:
Yeah, you know, as I mentioned earlier, with hydropower, that's
been kind of the backbone of resource adequacy here in the
Northwest. And I do have some good news about that.
We've talked so much about drought in recent years and we'll
come back to that at the end, towards the end of this.
But for right now, the Northwest Bonneville Power Administration
is looking at to have some a really strong secondary
sales market revenue this summer.
We've had a late wet spring here, above average snowpack and
especially in Canada and the upper areas of
the Columbia River Basin.
So far they recently increased their estimate for revenue
forecasts from the secondary market
to 566 million, which was a boost of about 110
million.
Jason Fordney:
Wow.
Dan Catchpole:
So not a bad, not a bad tweak there.
So yeah, hopefully, hopefully good times ahead for BPA on the
secondary market.
Of course, you know, we've all got a, you've got a story about
the reality of supply chain problems here that's affecting
everybody.
Jason Fordney:
Yeah, I took a look last week at the Uyghur Forced Labor
Protection Act.
Uyghurs, an ethnic group found in northwestern
China, and it's spelled U-Y-G-H-U-R.
But last week the US began enforcing a new law meant to prevent
imports of materials produced with forced labor in China, which
is another complication for the solar industry that's been
dealing with supply chain issues, especially in California.
This really comes at a kind of a bad time for the industry in
that regard.
So evidence of forced labor used to produce solar components in
Xinjiang region of China is more than
anecdotal. There was a July 2021 study by the US State
Department, Department of Homeland Security and
other agencies that found People's Republic of China is
committing genocide against Uyghur Muslims and other ethnic
groups, listing the solar industry as one that has forced labor
in its supply chain.
Vast majority of solar modules in the US of course, are
imported, with about three quarters of imported equipment coming
from Southeast Asia.
According to this report by the US agencies, Chinese government
has placed more than 1 million people in internment camps where
detainees are subject to a really harrowing list of abuses.
Yep, forced labor in every stage of the solar production
process.
I think this is something that the industry has been aware of
for some time as trying to correct.
Dan Whitten, who's vice president of public affairs for Solar
Energy Industries Association, told us, quote, "The use of forced
labor is abhorrent, and we support policies that ensure there is
not forced labor in the solar supply chain,." Unquote.
He said the plan by US Customs and Border and Department of
Homeland Security is one that allows solar companies to
demonstrate that forced labor is not used in the production.
So yeah, things coming from this region will now have to show
that they were not used with forced labor.
So we'll see if the Chinese government tries to get around that,
but rather serious issue there with solar equipment.
Dan Catchpole:
And just to be clear, this is separate from the Department of
Commerce's investigation that's been affecting solar development.
So, I mean, this is just like one-two punch here for solar
development.
But I mean, you know, this is the reality of China.
It's something that we talk about so much, just China in and of
itself.
And they put a lot of effort into presenting a public face that
really hides
what's going on. And the reality is, it is a totalitarian state
that is massacring people.
I mean, that's the ugly truth.
There's a lot of it looks like a western cities, and there's
affluence and
some freedoms. But at the same time, then you've got like
curtailing freedoms in Hong Kong and what's been going on to the
Uyghurs and stuff in Tibet.
I mean, it's yeah.
It's easy to look the other way and just ignore it.
But, speaking of renewables, as we were, Portland General
Electric is considering
speeding up its procurement of renewable energy to meet Oregon's
2030 clean energy goals.
This would be faster than its plan laid out in the Integrated
Resource Plan.
The utility says it still plans to acquire 150 average megawatts
of renewables with capacities in the 300 to 500
megawatt range, along with 100 megawatts of renewables for its
Green Future Impact Program and about
388 megawatts of emission free capacity resources that it needs
to meet its 2025 capacity
needs, which as the plan was originally laid out in the 2019
IRP.
But it's latest request, it says changing market conditions and
intense competition from utilities indicate, around the
rest, indicate that it might be more cost effective to acquire
those additional renewables now rather than later in the decade
as originally planned.
So, I mean, we're talking about moving things up several years,
which is interesting given the concerns about the supply chain
and inflation. But PG&E sees this, I guess, as more beneficial
to spend now rather than wait
for what prices are going to be like later on.
And at the same time, the Idaho PUC approved Idaho Power's
request to speed up its depreciation for coal-fired
Jim Bridger Power Plant.
So yeah, across the Northwest, utilities are speeding up plans
to get away from fossil fuel
resources and get into renewables.
Jason Fordney:
Oh, yes, that's a trend we're seeing quite a bit, of course,
around the West.
And I guess we'll finish with a little bit of drought news.
We had some brief good news for the June 16th to June 23rd
report from the US Drought Monitor.
There was marked improvements in drought conditions in the
northern portion of the western US.
Conditions across the Pacific Northwest to the northern Great
Plains were improving and the weather pattern included a
persistent storm track and near to below, near to below normal
temperatures.
Drought conditions improved by one category from the Pacific
Northwest to Montana.
Improvements in Montana, results of a seven day precipitation
surpluses.
That's the latest Drought Monitor report and our reporting by
Linda Daly Paulson that you can read in CEM.
That's about it for a drought in the West.
Dan Catchpole:
But I'm sure there will be more to come in the months and years
ahead.
Well, thanks for joining us.
That's all from me. Dan Catchpole, thank you for listening.
And as always, please rate and review this podcast in Apple
Podcasts, Spotify or wherever you listen and let other people
know about it. Energy West is edited and produced by our
colleague Sarah Wootten at Pioneer Utility Resources and Lucas
Smith at Lucky Sound Studio.
You can find me on Twitter.
I'm at @DCatchpole and my co-host Jason Fortney is on Twitter.
He's at @FordneyEnergy.
That's Fordney F-O-R-D-N-E-Y Energy.
Jason Fordney:
Yep. Thanks for the plug.
You can read more of our coverage at NewsData.com.
Nobody covers energy in the West like we do.
You can follow us on Twitter.
CEM is @CEMNewsData.
That's letters C-E-M NewsData.
Our sister publication Clearing Up is at @CUNewsData That's the
letters C-U NewsData.
Thanks for listening. We'll see you back here next week.
Intro:
You've been listening to NewsData's Energy West, a podcast about
the energy industry today and where it's going
tomorrow.