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Industry Musings Blog

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Catch Some Z's

Doing the Same thing Over and Over but Expecting Different Results

By Ziad Alaywan, P.E.

California’s goal to generate 100% clean power by 2045 is admirable. Will we get there? Not if we keep doing things the same way repeatedly and expecting different results. Isn’t that the definition of madness? California’s recent announcement to streamline construction of renewable power plants across the state is welcome news along with the CEC’s new certification program of non-fossil-fuel power plants through emergency rulemaking legislated in AB 205. Add the CAISO’s $7.3 billion of approved transmission upgrades and you might think we’re in good shape. However, there are still several missing pieces to the implementation puzzle and reality checks we need to face.

Reality Check #1:

The California Energy Commission (CEC) March 15, 2021, Joint Agency Report on the status of senate bill (SB) 100 2021 Report indicates a total of 148,000 megawatts (MW) of new generation capacity by 2045. That translates to bringing online about 6,000 MW of new capacity per year for the next 24 years. If we approach renewable development the same way we have done repeatedly in the last ten years, achieving that rate of development may be a goal that is plain crazy. The total installed renewable capacity 2022 Capacity, published by the CEC, was 28,122 MW or 34% of the total. In 2013, the renewable installed capacity was 15,534 MW. The incremental renewables installed capacity increased by 12,589 MW in the last 10 years. Taking the math, a step further, that equates to an average 1,258 MW annual growth in renewable power. While that might sound impressive, how are we going to increase the annual average megawatts of renewables built in California from 1,258 MW to 6,000 MW? That would be nearly six times faster than what was developed since 2013!

Reality Check #2:

Exacerbating the situation is the deliverability problem. The state needs 117% more capacity for reliability through Resource Adequacy (RA) designations. Keep in mind, the RA value has jumped from about $7/KW per month to about $20/KW per month primarily due to lack of transmission access, which adds to the cost of delivering the generation from where it is produced to where it is needed. The CA Public Utilities Commission (CPUC) ordered Load Serving Entities (LSEs) to buy more RA by 2024 to replace Diablo Canyon Power Plant even though retirement of the nuclear facility has been delayed. This has created an RA supply shortage, and spiking prices. It’s not clear that the new 40GW of generation from the new transmission can be deliverable.

Reality Check #3:

Would the utilities be able to implement this large increase, and do they have the staff to do so? I say that because we have seen an existing substation upgrade to interconnect a new generation project take five or more years. If California is serious about achieving its energy goals, then serious reform regarding interconnection and transmission development is needed and quickly!!

Published June 23, 2023, to the Western Power Trading Forum's "The Friday Burrito", Vol. XXVI #18

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