State Regulators Adopt Framework to Double Renewable Energy by 2030
It’s halftime for California’s first-ever statewide Integrated Resource Plan (IRP), a groundbreaking effort to link decisions about power production and consumption to the reduction of greenhouse gases (GHGs) over the next 12 years. Now is the time to pay attention to the details and make adjustments.
First the good news. After a year of detailed modeling and public comments, the California Public Utilities Commission (CPUC) adopted an aggressive GHG planning target for the electric sector of 42 million metric tons by 2030, a 50% reduction in GHG emissions from 2015 levels. The CPUC also adopted a Reference System Plan (RSP) to guide the state’s electric utilities, community choice aggregators (CCAs) and energy service providers (ESPs) (collectively called load-serving entities or “LSEs”) in their preparation of individual IRPs to meet their customers’ energy needs. The RSP shows that California does not need any new fossil fuel power plants or high voltage transmission lines. Instead, it indicates the state can cost-effectively cut its GHG emissions by building an additional 9,000 MW of solar, 1,100 MW of wind, 200 MW of geothermal and 2,000 MW of storage.
Now, the disappointing news. Despite urging from Vote Solar, consumer advocates, organized labor, environmental organizations and others, the CPUC did not follow through on its bold goals by immediately beginning a process to procure a portion of the recommended renewable resources. Vote Solar and others argued that to achieve the 2030 GHG target, LSEs need to continuously procure new renewable resources rather than do so in a boom/bust manner. Furthermore, with the looming closure of California’s last nuclear power plant, the need for GHG-free energy sources can’t wait until the end of next decade to meet a 2030 target. Vote Solar and others are looking at ways to correct this lapse in implementation and make sure that the reduction in GHG emissions begins sooner rather than later.
Despite the go-slow approach on new procurement, there are several other positive elements in the CPUC’s recent decision on the IRP. Most importantly, the CPUC prioritizes clean energy solutions focused on disadvantaged communities (DACs). Not only did the CPUC clearly define what parts of the state are impacted by high levels of air pollution, but they also require each utility and other LSEs to describe current and planned activities in those impacted communities and neighborhoods.
Specifically, the utilities and other LSEs are required to describe how they will minimize air pollutants in these communities, including detailed reporting on emissions that are due to the start-up and cycling of nearby natural gas power plants. They also must describe how they will target procurement of new renewables or storage within DACs, and develop programs to provide local economic benefits. This year, Vote Solar will be looking at ways to leverage its work on community solar to foster job-creating opportunities in DACs.
Another victory was the the adoption of a GHG planning price of $150 per metric ton of carbon dioxide equivalent in 2030. Not only will the planning price, together with LSE-specific GHG benchmarks, guide the development of individual IRPs, but it will also be used as a GHG adder in evaluating the cost-effectiveness of distributed energy resources (DERs). This is important as utilities begin procuring DERs as alternatives to investments in traditional distribution system assets such as substation upgrades and new wires. The GHG adder could also prove to be valuable in the upcoming net metering re-evaluation in California.
The second half of the two-year IRP process is now set to begin. The CPUC decision lays out additional planning activities for 2018 as the individual IRPs are submitted and then rolled up into a statewide Preferred System Plan.
One issue that Vote Solar focused on was the need to develop better modeling tools to compare DERs with utility-scale resources so that an optimal mix can be developed. The CPUC has acknowledged Vote Solar’s special contribution on this issue and has committed to developing a common resource valuation methodology.
Likewise, Vote Solar and others have pointed out the need for additional analysis of the state’s natural gas fleet. While we were pleased with the finding that no additional natural gas power plants are needed for reliability, the reality is that a significant portion of operating natural gas plants need to close to make room for more renewables and to lower electricity costs. Implementing the IRP will require reducing the need to curtail renewable energy sources when there is excess generation while still maintaining reliability. Vote Solar will remain deeply engaged over the course of the coming year on this issue and others as the IRP process unfolds.
Our goal is to ensure that both utility-scale and distributed renewable energy investments are deployed to reduce the impacts of climate change as well as to create jobs, build local economies, and improve public health in disadvantaged communities.