Mike Zaccardi, CFA, CMT

The heat is on out west. Record-shattering temperatures are taking place across the desert southwest. Phoenix has registered the highest number of 100-degree afternoon high temperatures of any summer, and there are more to come.

The heat is so intense that the California ISO (CAISO) has been forced to enact rolling blackouts across the state to curtail excess demand. Bloomberg reported that two million customers were without power on Friday as CAISO issued a stage 3 grid emergency. If the grid gets pressured with too much demand, there could be broader network failures that would put millions more out of power.

High temperatures in downtown Los Angeles have neared the triple-digit mark while the reliable hot-spot of Death Valley (the hottest place in the USA) has seen temperatures above 125 degrees.

And more extreme heat is to come. Afternoon highs through mid-week are expected to be above 100 for Glendale, California (just North of Los Angeles) on Tuesday and Wednesday. Today’s CAISO outlook forecasts peak demand above available capacity, so real-time power prices will likely soar. Today’s forecast peak is 44.4 GW while Monday’s is 47.0GW. The all-time record has stood at 50.27GW since July 24, 2006.

It was just last year that CAISO had to issue rolling blackouts due to fire risks in the state. You have to go back to 2001 to find the last time an emergency was declared due to high demand. But hot weather happens a lot; what's different this time?

Renewable energy has been charging ahead in the Golden State in recent years, leaving natural gas, coal & nuclear in the dust. The problem is renewable energy just isn't there during peak demand periods of the summer. The solar energy peaks midday while temperatures top-out during the late afternoon and evening. Also, the sun angle is less direct during August versus June. Wind tends to also run soft during hot summer afternoons. So there just isn't enough generation to meet peak annual demand anymore. CAISO said the blackout threat will last the next 4 days.

It’s not just the SoCal and the Southwest though. Later today, parts of Washington state will cross the century mark. Even Bellevue is forecast to reach a scorching 96 degrees Sunday afternoon.

High demand is pressuring natural gas power burn as well. Friday and Saturday’s readings were very high. Friday’s national power burn was just shy of the record hit last month. In Texas, the state hit a fresh weekend peak demand record as Dallas and Houston experienced hot and humid conditions.

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Map used with permission from Weathermodels.com