California regulators identify multi-gigawatt energy shortfall

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The California Public Utilities Commission (CPUC) has issued a decision within which regulators have identified “the potential for electricity system resource adequacy shortages beginning in 2021,” which is a way of using a lot of technical words to say that they’re facing a shortfall of generation on the grid.

So, when one decides there isn’t enough energy generation on the grid, what is done? In the case of CPUC a proposed decision is sent out, calling for the procurement of 2.5 GW of new energy resources within the transmission access area of Southern California Edison (SCE). And so, just like that, an open market nearly equivalent to the entire sum of solar that has been installed in Massachusetts to date has opened in California.

Now, not to kill the fun just as it’s starting, but there’s no guarantee that the sources procured will end up being solar facilities. The proposal calls for ‘all-source’ procurement, opening the door for natural gas-fired plants, energy storage, demand response and any other potential non-fossil generation facilities.

Regardless of source, 60% of that 2.5 GW figure is required to come on-line by August 1, 2021, 80% by August 1, 2022, and 100% by August 1, 2023.

Further broken down, the responsibility of procurement is not placed entirely upon the shoulders of SCE, however the majority is.

2.1 of the 2.5 GW will be procured by SCE, with local community choice aggregators picking up the tab for the last 400 MW. These smaller-procurement initiatives will be led by Clean Power Alliance of Southern California’s 357 MW share, a share which far outweighs the rest of the smaller requirements.

The need for procurement has been identified due to a medley of projected energy shakeups in the regions future. First come the closures, of which their are two kinds anticipated: nuclear power plants and once-through cooling (OTC) plants across the coast. For anyone wondering, OTC generates energy via the process of diverting water from bodies of water to cool steam after it has passed through a turbine to create power. The process has been found to entraps and kill billions of aquatic organisms annually, mainly fish larvae and shellfish, as well as remove water from habitats used by aquatic organisms and fauna.

However, the CPUC is operating under the idea that the procurement objectives may not be met and, to prepare for such an outcome, has advised that the State Water Resources Control Board extend of the once-thru-cooling (OTC) compliance deadlines for units currently slated to retire by December 31, 2020, for capacity of at least 2.5 GW and up to 3.75 GW, for up to three years beyond their current 2020 deadlines.

Outside of plant closures come projections of  projections tightening capacities for both natural gas systems and energy imported from other states.

Even with all the intricacies of the proposal, this is a massive opportunity for solar development in a state that isn’t exactly short on massive opportunities for solar development. It’s not every day that an energy need equivalent to the capacity of the state with the 8th most installed solar in the nation comes along. Even more rare is the need arising in a state which has shown a historic propensity towards solar as a generation source.