California approves 11.5 GW of new clean resources in largest-ever single procurement order

Dive Brief:

The California Public Utilities Commission (CPUC) on Thursday voted to approve an 11.5 GW procurement package composed entirely of clean energy resources that will come online in the middle of the decade, marking its largest-ever capacity procurement ordered at once.
The new resources are intended to prepare the state for more extreme weather and help replace the 2.2 GW Diablo Canyon nuclear plant, which will be shuttered by 2025, as well as 3.7 GW of natural gas plants that also are slated to retire soon.
"This is a landmark decision. I don't think it's hyperbole to describe it as such," CPUC Commissioner Clifford Rechtschaffen said at the Thursday meeting. "This is enough to power about 2.5 million households in the state, and all this will be coming from renewable or zero-emitting resources," he added.

Dive Insight:

The procurement will serve as a "new, clean reliability foundation for California's electric sector," the commission said in a statement.

The decision sets California on the path of bringing online 2,000 MW of resources by 2023, followed by increments of 6,000 MW, 1,500 MW and 2,000 MW by 2024, 2025 and 2026, respectively. The procurement requirements will be distributed among load-serving entities in proportion to their electric system load.

"We need these resources. We need them to respond to the changing climate and to more extreme weather events … we need it to respond to the changing grid," Rechtschaffen said at the meeting.

The CPUC had originally released two proposed decisions to move forward with the 11.5 GW package that included between 500 MW and 1,500 MW of natural gas resources. Both proposals were met with criticism from a variety of parties, including environmental groups who said the state's modeling didn't indicate a need for more fossil fuels, and utilities, who didn't want to be solely responsible for procuring gas.

The CPUC revised its first proposal — and scrapped the alternative one — in response to those comments, and regulators now intend to conduct additional analysis over the next few months on the need for fossil fuels. This analysis will help inform the next procurement order, which is expected later this year, Rechtschaffen said.

In terms of reliability, "I see this decision as a starting point," CPUC President Marybel Batjer said.

There is a likelihood that California may need fossil fuel resources to remain on standby to ensure reliability, Batjer added, "but if we have enough renewable and zero-emissions generation on the system, the fossil fuel resources ideally will not have to run, and just serve as only an insurance policy."

The decision, paired with new resources for clean energy in the state budget, show California is "turning a corner on clean power — expanding its procurement of zero-emissions resources, orienting toward more aggressive greenhouse gas emissions targets, and investing in promising new technologies that can provide clean, reliable utility-scale power," Danielle Osborn Mills, director of American Clean Power-California, said in a statement.

Regenerate California, a joint campaign of the California Environmental Justice Alliance and Sierra Club, called the decision "a big step forward in California's clean energy and air quality goals."