California Establishes Centralized Strategy to Procure 10.6 Gigawatts of Clean Energy

The California Public Utilities Commission on Aug. 22 issued a decision establishing a novel centralized strategy to procure clean energy and accelerate the state’s efforts to achieve emissions reduction targets for 2045 and beyond. The decision, which determines the need for centralized procurement of long lead-time resources, intends to streamline the process of securing diverse clean energy resources through a central entity.

The decision responds to legislation enacted last year, requiring an assessment of the need for the Department of Water Resources to procure long lead-time energy resources. Following the decision, the department will be tasked with leading the procurement of certain long lead-time clean energy resources.

With the new strategy, the commission plans for the department to procure up to 10.6 gigawatts (GW) of clean energy resources. Of this total procurement capacity, the department plans to acquire up to 7.6 GW of offshore wind, 1 GW of geothermal, 1 GW of multi-day long-duration energy storage, and 1 GW of long-duration energy storage with at least a 12-hour discharge period. The directive could lead to the completion of the procurement by 2037 subject to reasonable bid costs and contract approvals, enhancing California’s grid storage by up to 2 GW and increasing energy production by up to 8.6 GW.

Under the new approach, the department can speed up projects with long lead times. These types of clean energy projects are vital for California’s energy resilience and reliability but face cost barriers due to economies of scale. Establishing one procurement entity will streamline clean energy projects and make the acquisition process more effective.

The commission selected these specific energy technologies due to their potential to lower costs, effectively integrate into California’s electricity grid, and diversify the state’s energy portfolio. California also has set specific climate goals for the next few decades.

California recently adopted a strategic plan that charts a course to meet the state’s offshore wind planning goal of 25 GW by 2045. Developing offshore wind is a crucial part of California’s goal of achieving 100 percent clean energy by 2045.