The Friday Burrito

July is Busting Out All Over

As Burrito readers know, each month since last December I have been tracking year-over-year energy output of the
CAISO natural gas fleet and net imports. These two supply elements define a lot of the confusion that envelops grid
pundits who think marching toward a carbon-free environment will be a walk in the park. I encourage those who
hold fast to that notion to think again. It won’t be an easy stroll, and in fact, I doubt the park will ever be reached on foot.

July’s numbers for this year and last demonstrate again two recurring themes: First, natural gas is much needed to secure
the CAISO grid even during 1) an abundant hydro year such as 2023 compared to 2022, and 2) a fifty percent increase in
CAISO battery storage capacity; Second, the subregional price spreads throughout the West incent rational economic
behavior in that cheap electricity available during the midday in California has willing buyers for such outside of the CAISO.
It’s a bargain that has flipped the traditional reliance on imported power into California. Bottom line lessons: more gas
production inside of the CAISO and reduced net imports into the CAISO.

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