Commission Orders IOUs to Reduce GHGs by 25%
On March 26, the California Public Utilities Commission (CPUC) ordered California’s investor-owned utilities (IOUs) to reduce their greenhouse gas (GHG) emissions by 25% over the next decade, a target environmentalists argue is too weak to meet the state’s aggressive climate goals.
California’s electricity sector produced 62 million metric tons (MMT) of greenhouse gases in 2017, which is the most recent year of data available. The CPUC directed utilities to submit plans on how they would lower that collective number to 46 MMT by 2030, the first checkpoint in the state’s Renewable Portfolio Standard (RPS).
Liane Rudolph, the lead commissioner on this issue, said, “This decision concluded that the 46 MMT is still an appropriate GHG target for our [utilities] because it keeps us on track with GHG reduction. We are satisfied with how it performed during the reliability check, and even at significant investment on the part of ratepayers, it represents the most affordable portfolio to achieve those goals.”
Randolph added that the 46 MMT target would keep the power sector on track to meet the RPS goal of 100% clean power by 2045.
The commissioners acknowledged that the electrification of cars and buildings will increase demand on a grid still reliant on natural gas during the evening hours, even as renewables and storage continue to proliferate. This concern led environmentalists to call for a more stringent 30 MMT target. In a concession to critics, the CPUC told utilities to also craft a 38 MMT scenario, which they said would help them consider whether or not to lower the emissions target when the agency revisits the issue in 2022.
Commissioner Martha Guzman Aceves, however, still believes a replacement of the gas infrastructure is needed. “This capacity that our gas generation currently provides is something we need to take on and we need to replace. It’s not worth retaining the entire gas infrastructure and the implication of that fuel.”
Seemingly in response to Commissioner Guzman Aceves’ comments, Commissioner Randolph said that the 46 MMT target will lead to 11,000 megawatts of utility-scale solar by 2030, twice the current amount in California. In addition, Randolph said that to store that electricity when the sun isn’t shining, the state will see 8,900 megawatts of new battery storage and 1,000 megawatts of new long-duration storage during that time, along with 3,400 more megawatts of utility-scale wind.
Some Key Numbers from the Order
The Reference System Portfolio calls for nearly 25,000 MW of new renewable and storage resources to be online by 2030. The 25,000 MW of additional renewable power are broken down to:
- Nearly 8,900 MW of new battery storage
- 11,000 of utility scale storage
- 3,400 MW of wind
- 900 of pumped storage
- 30 MW of natural gas capacity not retained
- 200 MW reduction in demand response
In this scenario, the CPUC assumes that the rest of the renewables (biomass, geothermal, small hydro) will be available at their current levels, as well as large hydro and natural gas. The significant reduction will be in nuclear and coal.
The decision also calls for all Load Serving Entities (LSEs) to develop a plan to meet a 38 MMT GHG emission target by 2030, should there be a need for further reductions. Under this scenario, the CPUC sees a build out of:
- Nearly 9,700 MW of new battery storage
- 12,000 of utility scale storage
- 8,200 MW of wind
- 1,600 of pumped storage
- 2,000 MW of natural gas capacity not retained
- 2,400 MW reduction in demand response
Under both scenarios, natural gas power is still needed, but at reduced levels. In the coming months, LSEs will need to come back with individual integrated resource plans to meet this decision.