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Why California Still Relies on Natural Gas

With scorching temperatures in the western U.S., the high season for natural gas use in California's power system has begun.

Historically, July and August are peak months for gas-fired power generation in the California Independent System Operator (CAISO) network, driven by high energy demand for air conditioning. This past week, temperatures above 100 degrees Fahrenheit caused an early surge in air conditioner use, significantly increasing gas-fired power output.

From June to August, total CAISO power demand can be roughly 25% to 30% greater than in surrounding months, primarily due to the heightened need for cooling.

Despite steady growth in renewable energy within the CAISO system, natural gas remains crucial to meeting demand and addressing supply shortfalls. Between 2021 and 2023, CAISO increased gas-fired power output by an average of 72% during the summer months compared to the preceding three months. In 2024, this increase could be even more pronounced, following multi-year lows in natural gas generation in May due to higher output from cleaner power sources.

Renewable energy has seen rapid growth, particularly solar power, which increased by 20% from 2021 to 2023. Solar and wind power accounted for 51.2% of CAISO's total power output in May 2024.

However, the intermittent nature of renewable energy means CAISO must keep gas production assets ready. Solar production drops to zero at night, and wind power decreases during the summer. CAISO will likely increase gas-fired power deployment to manage these fluctuations in the coming weeks and months.

Until CAISO can reliably store and discharge clean power when renewable sources falter, gas-fired plants will remain essential to keeping California cool during peak summer months.


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