More demand or less supply?
NERC is predicting California (and therefor Internet data centers in the region) may be subject to almost daily rolling blackout throughout the summer. Although most major Internet data centers have backup generators, the historical reliability data everyone uses is based on "normal" power conditions in the USA, not daily rolling blackouts. Is California really out of power? News reports indicate California is consuming less power than the same time last year. http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2001/05/03/MN202545.DTL
Energy consumption was down 9.2 percent, or 2,967 megawatts in March compared with the same time last year. In February, the number was 8 percent, or 2,578 megawatts, and in January it was 6.2 percent or 2,091 megawatts.
So why are there power shortages in California? http://www.latimes.com/business/reports/power/lat_suit010518.htm
A Times analysis of state data found that, throughout the last two months, about 12,000 megawatts of production was offline, more than a third of the peak power used in California on a typical day. That has been about evenly divided between scheduled and sudden plant shutdowns. By contrast, shutdowns in the same period of 1999 and 2000 took only 3,300 to 5,700 megawatts offline.
Why is 2 to 3 times more capacity offline this year compared with previous years? I don't know. It appears the "supply" shortage is not due to increased demand, or even the lack of new power plant capacity; but due to the shutdown of existing capacity by generation companies at a higher rate than normal. Normally, when demand drops you would expect prices to fall. Consumption is down between 6.2% and 9.2%. However, in California generating companies have shut down power plants faster than demand fell, creating shortages and prices have been rising. It will be an interesting summer.
There's an interesting sidebar in an old "America's Network" magazine about why there was a shortage. It's too long to include here (and likely too far off-topic), so here's a link. They don't include this sidebar in their online edition, and I typed it in after a similar debate over at the datacenter list: http://www.inch.com/~spork/calpower.txt Charles | Charles Sprickman | Internet Channel | INCH System Administration Team | (212)243-5200 | spork@inch.com | access@inch.com On 18 May 2001, Sean Donelan wrote:
NERC is predicting California (and therefor Internet data centers in the region) may be subject to almost daily rolling blackout throughout the summer. Although most major Internet data centers have backup generators, the historical reliability data everyone uses is based on "normal" power conditions in the USA, not daily rolling blackouts.
Is California really out of power? News reports indicate California is consuming less power than the same time last year.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2001/05/03/MN202545.DTL
Energy consumption was down 9.2 percent, or 2,967 megawatts in March compared with the same time last year. In February, the number was 8 percent, or 2,578 megawatts, and in January it was 6.2 percent or 2,091 megawatts.
So why are there power shortages in California?
http://www.latimes.com/business/reports/power/lat_suit010518.htm
A Times analysis of state data found that, throughout the last two months, about 12,000 megawatts of production was offline, more than a third of the peak power used in California on a typical day. That has been about evenly divided between scheduled and sudden plant shutdowns. By contrast, shutdowns in the same period of 1999 and 2000 took only 3,300 to 5,700 megawatts offline.
Why is 2 to 3 times more capacity offline this year compared with previous years? I don't know. It appears the "supply" shortage is not due to increased demand, or even the lack of new power plant capacity; but due to the shutdown of existing capacity by generation companies at a higher rate than normal.
Normally, when demand drops you would expect prices to fall. Consumption is down between 6.2% and 9.2%. However, in California generating companies have shut down power plants faster than demand fell, creating shortages and prices have been rising.
It will be an interesting summer.
Why is 2 to 3 times more capacity offline this year compared with previous years? I don't know. It appears the "supply" shortage is not due to increased demand, or even the lack of new power plant capacity; but due to the shutdown of existing capacity by generation companies at a higher rate than normal.
I think more capacity is offline than previous years because of a large number of factors. Some of the most important are: 1) The ISO has designated more "no touch" days than in previous years. This makes it harder for plant operators to schedule their maintenance effectively. Less effective normal maintenance means more emergency and unplanned maintenance. 2) The PG&E bankrupcy combined with other utilities being unable (or unwilling) to pay their bills has resulted in generators not getting paid. Generators are hard pressed to keep their plants running when they aren't being paid and don't know if they will ever be paid. 3) The increased prices earlier in the year prompted utilities to produce more of their own power and to buy as little as possible from outside sources. This means that more plants have used up their air pollution allotments for the year. It also means that more maintenance is needed now than would otherwise be required at this time of the year. Personally, I'm fairly certain that most of the blame for our current crisis rests with the courts who compelled the utilities to buy power regardless of the price. There is absolutely no rational defense for this ruling that I can imagine, and with no bargaining power, the utilities were raped by the generators. David Schwartz
Yo David! On Fri, 18 May 2001, David Schwartz wrote:
regardless of the price. There is absolutely no rational defense for this ruling that I can imagine, and with no bargaining power, the utilities were raped by the generators.
Without the high prices companies like Kaiser Aluminum would not have sent 7,000 workers home so they could sell their power to California. Like it or not, the higher prices did make more energy available to California than would have been otherwise the case. RGDS GARY --------------------------------------------------------------------------- Gary E. Miller Rellim 20340 Empire Ave, Suite E-3, Bend, OR 97701 gem@rellim.com Tel:+1(541)382-8588 Fax: +1(541)382-8676
On Fri, 18 May 2001, David Schwartz wrote:
regardless of the price. There is absolutely no rational defense for this ruling that I can imagine, and with no bargaining power, the utilities were raped by the generators.
Without the high prices companies like Kaiser Aluminum would not have sent 7,000 workers home so they could sell their power to California.
Right, because the lost productivity would have been greater than the value of the power. This is just a really awkward way of saying that power became so expensive that Kaiser Aluminum couldn't affort to buy it anymore. Kaiser's productivity was lost because of high energy prices.
Like it or not, the higher prices did make more energy available to California than would have been otherwise the case.
Of course, because it priced consumers with smaller budgets out of the picture. To put it another way, higher energy prices hurt some customers more than others. Marginal users of electricity, those for whom the value of what they could do with the electricity wasn't much more than its cost, were squeezed out. Net productivity decreases because these marginal benefits are lost and the sum total of a large number of marginal values can be quite a bit. Prices do need to rise when demand exceeds supply. But to eliminate the checks and balances on the process for an essential item destroys the natural market forces that keep prices stable. One of the most important checks in the system is that a buyer won't pay more for something than it's worth to them. Remove that check and prices will rise until the buyers are broke. That can't be good for anyone. DS
participants (4)
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Charles Sprickman -
David Schwartz -
Gary E. Miller -
Sean Donelan