California energy regulators have proposed to decrease greenhouse gas emissions caused by the state's electricity sector, but will need to rely on natural gas plants in the coming years in order to do so, according to the California Public Utilities Commission.
More natural gas capacity will need to be retained in order for the state to meet the electric sector's 2030 limit of 46 million metric tons of GHG emissions, according to the CPUC. The commission found that it is more economic to retain natural gas capacity now, particularly peaking capacity, than to retire gas capacity and rebuild it after 2030, when electric loads are expected to increase dramatically due to electrification in other sectors.
The 46-MMT target will likely "become harder for the electric sector to achieve" if other sectors, such as transportation and building industries, switch from fossil fuels to electricity, the commission said in its 2019-2020 proposed resource planning decision. Electricity demand due to electric-vehicle adoption in the state is expected to increase from about 5,000 GWh in 2019 to about 20,000 GWh in 2030 (see CEM No. 1549).
Limiting electric-sector emissions to 46 MMT in 2030 would put the sector on a "straight-line trajectory" to reach the state's zero-emissions electricity goal by 2045, the CPUC said. But many stakeholders say that a goal of 46 MMT by 2030 will make it more difficult to reach zero GHG by 2045, and therefore recommend that the CPUC instead set the goal at 30 MMT.
"Ten years isn't really a whole lot of time," Union of Concerned Scientists energy analyst Mark Specht said in an interview with California Energy Markets. "If we decide halfway through the decade that we actually need to decarbonize the electric sector further because other sectors of California's economy haven't done enough, we might find ourselves in a predicament."
About 11,000 MW of new utility-scale solar will need to be installed by 2030 under the 46-MMT emissions target, whereas about 21,000 MW would need to be installed under the 30-MMT target. Similarly, about 8,800 MW of battery storage will need to be installed under the 46-MMT scenario, whereas about 19,000 MW would be needed under the 30-MMT scenario.
"Decarbonizing the electric sector takes a lot of time," Specht said. "This is one of the most compelling reasons why we should lower the electric-sector emissions target now, because we really need all the time we can get."
Stakeholders are strongly divided over what GHG emissions target should be assumed for 2030, the commission said. At least 20 parties, including the California Independent System Operator, Pacific Gas & Electric, San Diego Gas & Electric and Southern California Gas Co., expressed mild to strong concerns about the potential for overreliance on battery storage, according to the CPUC. CAISO said the costs associated with battery cycling and replacement were not fully incorporated into the modeling, and that it is concerned about the level of battery storage included in the recommended portfolio, since such a high level of storage has not been seen in previous portfolios.
Several other stakeholders expressed concern about the 2,000-MW-per-year limitation placed on annual solar buildout under the 46-MMT alternate scenario. The stakeholders said this amount of annual solar installations has been exceeded historically, and therefore questioned why the modeling should artificially limit what could happen in reality, the CPUC said. Southern California Edison, on the other hand, supported limiting the annual buildout of solar facilities, the commission said.
The proposed decision does not include new geothermal resources, but adds out-of-state wind, pumped storage and behind-the-meter battery storage as potential resources. The model predicts that California will also need to install about 2,7000 MW of wind power over the next decade in order to emit no more than 46 MMT of GHG in 2030.
Specht, however, asked why the state should wait.
"To reach California's long-term goals, we are going to have many of these investments anyway," he said. "Geothermal and more wind resources, those are going to have to happen eventually—it's just a matter of when."