California utility grid reliabilty faces questions as state phases out natural gas plants

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California energy officials are making the decision to let go of three aging natural gas plants that have served as a backup for when high energy demand stresses the grid — with nothing to immediately take its place.

That decision, some worry, could put the reliability of the state’s grid at risk for the sake of the state’s wider push to move away from fossil fuels toward more electricity from cleaner energy.

Earlier this month, Delphine Hou, deputy director of the California Department of Water Resources energy office, said during a California Energy Commission meeting that the state’s grid reliability contracts with the plants will sunset at the end of the year.

That means Alamitos Generating Station in Long Beach, the Huntington Beach Generating Station and the Ormond Beach plant in Oxnard won’t likely keep operating to help out in emergency demand surges on the grid.

Environmental advocates have been working for years to shut the plants down, which they say threaten marine life with the billions of gallons of water it uses to cool down.

The first two plants are already confirmed to shut down, Politico reported. The Oxnard site may be converted to a battery storage site, EdHat reported.

Some experts claim the state doesn’t need the power plants thanks to rapid build-out of battery storage capabilities. The state’s consumption of natural gas is only getting lower and lower.

“It is a meaningful moment,” Arne Olson, at the energy analytics firm Energy and Environmental Economics, told Politico. “We’ve been able to add enough battery storage capability and solar capability that we might not need these old plants anymore.”

But some worry that the plants — which state authorities kept open for decades to deal with electricity storages — may still be crucial and that phasing them out is “wishful thinking.”

It was only just this September and October that a heat wave strained the Southern California grid when the plants were prepositioned for use. In 2024, the plant operators were also told twice their backup capabilities may be needed.

State legislative analysts in the summer flagged the lack of a concrete replacement for the reserves and noted that expanded battery storage is not a perfect solution.

“Battery storage at current durations does not provide the multi-day, extreme-event resilience that the [natural gas] plants theoretically offered,” wrote staff of the California Assembly Utilities and Energy Committee.

“A 72-hour heat dome coinciding with regional wildfire smoke reducing solar output – a scenario bearing meaningful resemblance to conditions California experienced in both 2020 and 2022 – creates a sustained demand on firm generation capacity that battery storage cannot fully satisfy at present.”

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Patrick Rau, senior vice president of research at Natural Gas Intelligence, said that battery technologies are still susceptible to prolonged heat and cold events.

“More renewables mean natural gas gets used more as backup fuel, but having gas as a backup is still highly necessary,” Rau said in an analysis. “It’s critical.”

Meanwhile, electricity demand is only getting higher with data centers and artificial intelligence that battery storage by itself may not satisfy, Rau added.

Other natural gas plants not affected by the closures will still provide energy help, legislative analysts said, but the state’s push to phase out fossil fuels could lead those companies to eventually close or not re-invest in them.

“This would leave California without firm backup capacity at precisely the moment it is most needed,” analysts said on a worst-case scenario.

Energy authorities insist the state will be fine. Mark Rothleder, an executive at the state’s main grid manager California Independent System Operator (CAISO), said the recent heat wave was actually proof the plants were not needed because they didn’t end up being used, News Data reported.

“We will be in good shape going forward after the end of the year without these resources,” he said.

The state energy commission’s vice chair Siva Gunda said the state will have time to bring new power plants online in the next decade.

The state is in the middle of more procurement of electricity, including a total additional 6 gigawatts from 2029 to 2032, though they “must be either zero-emitting or otherwise eligible under the [renewables portfolio standard] program.”

That procurement may still not solve everything. A July report by the energy commission said the grid could experience shortfalls by 2036 even if utilities acquire all the the new electricity production by 2028 demanded by the state.

Gunda said he’s not worried.

“Right now, I would say [until] 2030, we’re looking good because the procurement’s there,” Gunda told Politico. “As we move into the late 2020s, there will be more procurement to fill the gap.”