The electric grid is designed to handle the highest demand expected in a given period, commonly referred to as peak demand. Depending on many factors, the time needed for peak demand and period of high demand approaching peak can be a small percentage of the hours in a year. California utilities generally hit their peak level of demand in the summer, when temperatures are hot and air conditioners are running. But for most of the rest of the year, demand is relatively low. This means that there is capacity in the grid that is not used much of the time. To measure how much of this peak capacity is used on average we use asset utilization rates – or the more wonky term, load factor. This is not a new concept but one that rarely comes up in energy policy conversations…
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