California Public Utilities Commission’s Clean Energy Order: Necessary, Timely, & Ambitious

Originally published on NRDC Expert Blog.
By Mohit Chhabra

The California Public Utilities Commission (CPUC) adopted a decision to acquire 11.5 GW of mostly carbon-free electricity over the next five to seven years. This decision firmly places the state on course to getting to zero carbon electricity and a carbon neutral economy by 2045 for two reasons:

(1) it ensures that California’s growing electric load will be met by increasingly clean electricity; and

(2) it replaces Diablo Nuclear Power Plant with clean electricity to avoid unnecessary increase in polluting power plant operations due to Diablo retiring.

This procurement order, an electricity planner’s way of saying getting new power generators built and contracted, is the largest to come from the CPUC’s integrated resources planning process (IRP) process so far. The CPUC conducts analysis to determine how to meet California’s future electricity needs and reduce carbon at least cost through the IRP. At the CPUC voting meeting on Thursday, Commissioner Cliff Rechtschaffen correctly described this as a landmark and unprecedented decision.

California’s Clean Electricity Needs are Growing

A key tenet of getting to a carbon neutral economy is electrification — powering cars and buildings on electricity. Climate change is causing heat waves, which are getting more frequent and straining our electric grid every summer. We need more clean electricity to meet the needs of a growing economy, transition gasoline and fossil gas powered cars and appliances to clean electricity, and to ensure that Californians can keep their lights on and their homes comfortable. Add to this the fact that the influx of cheaper clean electricity is forcing traditional electric power plants to retire. California needs to start procuring clean electricity now.

11.5 GW of Net Qualifying Capacity (NQC) is a lot of Clean Electricity!

11.5 GW is approximately 20 percent of California’s total NQC. NQC is the amount of power an electricity resource – such as a solar panel or wind turbine – can provide to the grid at times when the grid is most constrained. This is less than its nameplate capacity, or the maximum amount of electricity a resource can produce.

For example, 14 percent of a solar project’s nameplate capacity qualifies as NQC because California’s electricity needs are most pressing during the evening when solar isn’t abundant. So, we get 1.4 GW NQC for every 10 GW of solar procured. However, combining solar with storage can provide much higher NQC and meet our evening time needs. 11.5 GW of NQC means could mean procuring up to 20 GW or more of nameplate renewable and battery storage capacity. Most of this procurement likely be a combination of wind and solar coupled with battery storage, demand response (a reduction or change in electric use to relieve stress on electricity supply and avoid system emergencies), and geothermal energy.

Retiring Diablo Without Increasing Emissions and Pollution

Diablo Canyon Nuclear power plant provides approximately 16,000 GWh of carbon-free electricity each year. This is around 9% of California’s total electricity need. If Diablo isn’t replaced with carbon-free resources, then its retirement will lead to an increase in carbon emissions and air pollution as the electricity it supplies is backfilled by traditional polluting power plants. This will also create a shortage of in-state power supply to meet our increasing electricity needs. The CPUC decision to buy clean energy now preempts these future problems.

NRDC has been working for years to retire the aging Diablo Canyon nuclear power plant, which is an inflexible and expensive to maintain power source, to replace it with cheaper clean energy including demand side resources such as energy efficiency, and demand response. This decision puts those recommendations into action.

California’s Cost-Effective Clean Electricity Transition is Underway

California’s electric sector emitted almost 50 million tons of carbon in 2020. This procurement will put California on the path to reducing its electricity related emissions to 38 million tons by 2030 and on the path to zero-carbon by 2045.

As the cost of climate change mounts, NRDC will continue advocating at the CPUC to make sure that this transition is affordable. Reducing 24% of electric sector emissions will cost the average California household between only $4 and $9 a month; most of this cost can be avoided by powering cars on clean electricity instead of gasoline. NRDC is also working at the Commission to ensure that electric bills remain affordable through energy efficiency and by prioritizing clean energy subsidies to California’s most vulnerable population.

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