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California drought leads to less hydropower, increased natural gas generation

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Posted October 7, 2014

The drought in California continues to increase in severity since California’s governor declared a state of drought emergency in January 2014. As of September 30, 58% of the state was classified as experiencing exceptional drought, the most intense drought category. These dry conditions limit hydropower generation, requiring generation from other sources to make up for the shortfall.

Source: U.S. Department of Agriculture Drought Monitor; National Drought Mitigation Center

Source: U.S. Department of Agriculture Drought Monitor; National Drought Mitigation Center

California’s drought, which began in 2011, has resulted in a significant decline in hydropower generation. On average, hydropower accounted for 20% of California’s in-state generation during the first six months of each year from 2004 to 2013. During the first half of 2014, however, hydropower accounted for only 10% of California’s total generation. Monthly hydropower generation in 2014 has fallen well below the 10-year range for each individual month.

Source: U.S. Energy Information Administration, Electric Power Monthly

Source: U.S. Energy Information Administration, Electric Power Monthly

In California, natural gas-fired capacity is often used to help offset lower levels of generation from hydropower facilities. The chart below shows how this inverse relationship can work: when monthly hydropower generation dips under 10-year average levels, monthly natural gas generation often rises above its 10-year average in response. From January through June of 2014, natural gas generation in California was 3% higher compared to the same period in 2013 and 16% higher compared to the January-June average from the previous 10 years.

Source: U.S. Energy Information Administration, Electric Power Monthly

Source: U.S. Energy Information Administration, Electric Power Monthly

Wind and solar generation are also playing an increasingly significant role in California’s generation mix. For the first time, wind generation surpassed hydro generation in California, doing so in both February and March of 2014. In the California Independent System Operator’s (CAISO) Summer Loads & Resource Assessment, CAISO noted that the generation supply was expected to be adequate in order to meet peak electrical demand requirements in spite of drought-related concerns, in part because of recent renewable and natural gas capacity additions.

Source: U.S. Energy Information Administration, Electric Power Monthly

Source: U.S. Energy Information Administration, Electric Power Monthly

Source: EIA

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