California lowers electric sector GHG target, directs procurement of more than 40 GW of clean energy resources

Dive Brief:

California regulators on Thursday approved long-term plans to ensure electric system reliability, requiring the development of more renewable energy and storage resources, along with deeper cuts to greenhouse gas emissions.
The California Public Utilities Commission (CPUC) adopted a 2032 greenhouse gas (GHG) emissions target of 35 million metric tons for the state's electric sector, marking an almost 25% cut to the previous 46 MMT target.
Utilities will need to procure approximately 25.5 GW of new renewables and 15 GW of storage and demand response resources by 2032. Regulators say the new plan includes more solar and battery storage than the one adopted in 2019, and also includes long-duration storage, out-of-state wind, and offshore wind resources.

Dive Insight:

The CPUC's decision caps a multi-year process where load-serving entities develop integrated resource plans, and sets the stage for an "unprecedented" procurement of new clean energy resources, according to Commissioner Clifford Rechtschaffen.

"It keeps us on the path toward achieving our state’s ambitious clean energy targets while ensuring system reliability,” Rechtschaffen said in a statement.

New Resource Buildout of 38 MMT Core with 2020 IEPR Demandand High EV Penetration (Cumulative MW) Retrieved from California Public Utilities Commission.

Modeling and independent analysis of the plan was conducted by the California Energy Commission, and the CPUC said it demonstrates that the portfolio "meets stringent reliability standards."

The commission's preliminary analysis of the preferred system plan portfolio also "indicates there is sufficient space for all of these new resources on the existing transmission system, with only limited transmission upgrades needed by 2032," the CPUC said in a statement. Regulators say that conclusion will be validated at a "more granular level" by the California Independent System Operator (CAISO) in its 2022-2023 Transmission Planning Process.

The commission also ordered the procurement of two battery storage projects that were previously identified by CAISO as alternatives to transmission upgrades, and which are expected to achieve the same level of system reliability at lower costs to ratepayers.

The stricter GHG planning target equates to 73% renewable portfolio standard resources and 86% greenhouse gas-free resources by 2032, according to the CPUC. The Union of Concerned Scientists (UCS) said it supported the CPUC's decision, but added that "more aggressive decarbonization will still be necessary for the state to achieve its climate goals."

The stricter GHG standard "is particularly important when you consider the urgent need to quickly decarbonize California’s economy along with uncertainties in the accounting of carbon emissions in the CPUC’s modeling tools," UCS Senior Energy Analyst Mark Specht said in a statement.

"I believe a future target of 30 million metric tons in the next IRP cycle will be necessary to put California on the path to reducing emissions from the power sector that appropriately responds to our climate emergency," Specht said.

UCS also said it supported regulators' decision to leave in place a previous procurement order that did not include natural gas power plant upgrades as an eligible resource.

The next IRP cycle kicks off in November with new plans to be filed by load serving entities. Those will include plans to procure the 11,500 MW of capacity required for mid-term reliability that CPUC directed in its June 2021 decision.

"The additional capacity of zero-emitting resources previously ordered should be sufficient to ensure grid reliability and replace retiring fossil-fueled generation and the Diablo Canyon [nuclear] power plant," Specht said.