In October 2015, a field crew discovered a massive natural-gas leak at the Aliso Canyon facility near Los Angeles—a site that accounts for almost a quarter of California’s storage capacity for the thermal fuel.
Southern California Gas, a division of Sempra Energy (NYSE: SRE), has stopped the leak, but the utility won’t be able to inject additional natural gas into the field until state inspectors give the all-clear. With the facility operating below its usual capacity, some officials have worried about the increased risk of power outages in the Los Angeles area.
Strange Bedfellows: Natural Gas and Solar Power
This incident highlights California’s growing dependence on natural gas as the state increases the proportion of renewable energy in its generation mix.
Cheap and abundant in North America, natural gas also emits less carbon dioxide than coal when burned, making the thermal fuel the ideal feedstock to provide reliable, baseload power or to generate electricity from peaker plants that start up when demand exceeds supply.
This shadow capacity of gas-fired power plants is critical to meeting demand during periods of diminished output from intermittent sources of renewable energy; the sun doesn’t shine all day, nor does the wind blow with the same force.
In other words, the more baseload electricity that solar power displaces during the day, the more California must rely on gas-fired plants in the evening.
The incident at Aliso Canyon and recently reported leaks in PG&E Corp’s (NYSE: PCG) system have awakened regulators to the need to improve reliability in the event of future disruptions to gas supplies.
This realization has increased the focus on battery-based storage systems that would retain excess electricity generated during the day and pick up some of the slack at night or during unexpected outages.
Unfortunately, much of the media focus on energy storage has focused on flash instead of substance, providing a platform for Elon Musk’s solar-power evangelism.