California Releases First Joint Agency Report on Path to Carbon-Free Electricity System by 2045

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By Rachel Rockwell

On March 15, 2021, the California Public Utilities Commission (CPUC), in cooperation with the California Energy Commission (CEC) and California Air Resources Board, released the first joint agency report and a summary document detailing the state’s path to a carbon-free electricity system by 2045. The plan was drafted as required by SB 100 (De León) (Chapter 312, Statutes of 2018), the state’s policy requiring that renewable and zero-carbon energy resources supply all-electric retail sales to customers by 2045. [see 24:1 CRLR 158–159] The report states the joint agencies held a series of public workshops to solicit comments on its scope, analysis, and process. The agencies also consulted with the California balancing authorities, which balance supply and demand and maintain electric frequency on the grid. Further, the agencies consulted with the Disadvantaged Communities Advisory Group for comments from representatives of disadvantaged communities who also advise the CEC and CPUC on energy equity issues.

The agencies determined that the 2045 goal while challenging, is feasible with significant investment in new and existing technologies and an increased build-up of clean energy projects. In addition to addressing climate change, the report stated SB 100 would benefit residents throughout the state in three key aspects: improving public health, advancing energy equity, and supporting a clean energy economy. Noting that the bill did not define “zero-carbon resources,” the joint agencies interpreted the phrase to mean energy resources that either qualify as “renewable” in the most recent Renewables Portfolio Standards (RPS) Eligibility Guidebook or generate zero greenhouse gas emissions on site.

The report considered various implementation pathways and their estimated resource requirements and cost impacts. One such scenario, termed the SB 100 Core scenario, predicted the results of the pathway that is consistent with the joint agencies’ interpretation of the statute and included only commercialized technologies with publicly available cost and performance data. This scenario showed a tripling of generation resources relative to today’s installed capacity. A nearly $4.5 billion additional annual total resource cost in 2045 would be required to meet the bill’s goal. The report also generally suggested that the total resource cost of achieving SB 100 is six percent higher than a sixty percent RPS future in 2045. The agencies identified innovation in zero-carbon technologies and load flexibility, and energy storage development as avenues for cost reductions. However, the report noted record-setting build rates would ultimately be required to meet the bill’s goals.

SB 100 requires the agencies to submit a new report every four years. The agencies’ next steps for analysis include inquiries into reliability, emerging technologies and innovation, land-use and environmental impacts, and non-energy benefits and social costs.

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