An Unseasonably “Hot” February for California’s Clean Energy Landscape

, senior analyst, Clean Energy | February 12, 2018, 10:29 am EDT
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By and large, major policy action for California’s electricity sector mimics the seasons: winter is a relatively quiet, reflective time and major policy developments start to bud in the spring. As the air heats up, so do policy debates in Sacramento, which ultimately bloom fully or die on the vine in September, when the Legislature wraps up its session.

But lately, the weather in California and electric sector policy developments seem unseasonably hot. For example, it’s currently 75 degrees outside my office in Oakland. And below are some of the things happening in the policy world that also seem particularly “hot”:

CPUC approves a 2030 clean energy blueprint.

Late last week, the California Public Utilities Commission (CPUC) approved a blueprint laying out the electricity sector investments through 2030 that will be necessary to reach greenhouse gas reduction goals consistent with the statewide requirement to reduce emissions 40% below 1990 levels by 2030.

This system-level blueprint is the first phase of what’s called the Integrated Resource Plan (IRP); the next step is for all investor-owned utilities (IOU) and community choice aggregators (CCA) to submit their individual plans, which are due in August. More information about the IRP and individual IOU and CCA progress can be found here. The publicly-owned utilities (POUs) in the state will submit their plans to the California Energy Commission (CEC) and progress can be tracked here.

UCS conducted analysis in the IRP proceeding to underscore a key blind spot in the CPUC’s own work: the fact that all of the gas generation capacity that exists today was assumed to still be around in 2030 to provide energy and grid services.

It’s well known that California has an excess of natural gas generation capacity on the grid, and it remains a significant source of global warming pollution in California. We built a lot of natural gas plants in the 90s and early 2000s, and we don’t need it all now. Our own analysis showed that a significant portion of the natural gas peaker generation capacity may not have much value to the grid in 2030. But, we also know that some gas will be important for reliability through 2030.

The question is, which plants stay and which plants go? The IRP decision underscores the need to understand the role of gas in California’s clean energy future, to make sure that the inevitable downsizing of the fleet does not jeopardize grid reliability, and benefits people that are most impacted by gas plant pollution, especially “fenceline” communities that bear the brunt of this pollution. UCS is planning some additional analysis on this issue, so stay tuned.

Big bills are being discussed in Sacramento.

Senate Bill (SB) 100, a bill that would set a bold and achievable target of getting 100% of California’s electricity from carbon-free resources by 2045 is still alive, and waiting to be taken up for a vote in the Assembly. Although there is a lot of public support for SB 100, the policy is getting hung up by potential amendments that deal with the treatment of distributed energy resources. UCS is trying to do what it can to break that logjam and in the meantime, communicate to the Assembly that we’d like to see SB 100 move forward without additional amendments.

Assembly Bill (AB) 813 is a bill that would make it possible for the California Independent System Operator (CAISO)—which operates the grid that serves about three quarters of California’s electricity needs—to expand and include other western states. Pivoting California’s energy market into one that’s west-wide is ambitious and complicated, but worth the effort. Expanding the pool of resources that a grid operator has to manage the system is one of the most cost-effective ways to incorporate more wind and solar generation onto the electricity system.

Energy storage and small-scale renewables are giving natural gas a run for its money.

In early January, the CPUC issued a resolution that authorizes PG&E to hold competitive solicitations for energy storage or “preferred resources” (e.g. demand response and distributed solar) to meet local reliability requirements that have previously been met with gas power plants. This decision, combined with the CEC’s recent decision to reject NRG’s request to build a natural gas peaker plant in the Oxnard, is evidence of what will hopefully become a very significant shift away from the assumption that gas plants are the best and most cost-effective way to provide grid reliability services in the future.

These are just three examples of major clean energy advancements that have unfolded in the last six months. And, many decisions are still developing about whether the state will pass SB 100 and nearer-term plans we’ll need in order to move towards a cleaner grid. Clearly, there is more work to do. But there’s no doubt in my mind that we are making meaningful progress on these “hot topics,” and UCS will be working to make sure California continues its clean energy momentum and climate leadership to “cool down” global warming.

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