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More demand or less supply?
From: Sean Donelan <sean () donelan com>
Date: 18 May 2001 02:34:05 -0700
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
Is California really out of power? News reports indicate California
is consuming less power than the same time last year.
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
So why are there power shortages in California?
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.