California regulators have approved a 3.3-gigawatt “all-source” procurement that will pit new renewables, energy storage, demand response and other clean resources against natural-gas-fired power plants in a race to meet what could be a major shortfall in grid capacity over the next four years. Thursday’s decision from the California Public Utilities Commission (CPUC) sets the stage for every utility, community-choice aggregator and third-party direct access provider in the state to secure a share of resources needed to keep the grid running during times of peak demand. The all-source procurement is technically open to existing natural-gas plants. But carbon-free alternatives are likely to be the primary beneficiary of the new opportunities opened up by the decision. Those include solar paired with batteries to shift daytime output to late afternoon and early evening, when California faces its steepest demand peaks, and demand response that shifts energy consumption away from those critical hours. But the CPUC’s decision also contains the controversial option of keeping a set of natural-gas-fired power plants open past their current 2020 closure dates, a move opposed by local environmental justice groups and clean energy advocates alike. Opponents have vowed to challenge that part of the plan with state coastal water authorities, which ordered the closure of the once-through cooling plants in the first place. Those plants use seawater for cooling, which was deemed environmentally harmful. Under
Thursday’s decision, CCAs across the state will be responsible for roughly one-quarter of the 3.3-gigawatt procurement. Some of the largest include nearly 200 megawatts for Clean Power Alliance of Southern California, nearly 100 megawatts for East Bay Community Energy, 78 megawatts for San Jose Clean Energy, 67 megawatts for Silicon Valley Clean Energy, and about 55 megawatts apiece for Peninsula Clean Energy and Clean Power San Francisco. CCAs have already been signing new renewable energy contracts at a rapid clip. This week, the California Community Choice Association announced that its members have contracted for nearly 3.2 gigawatts of renewable power-purchase agreements, almost all of it utility-scale solar. While standalone solar doesn’t provide nearly as much capacity value as it once did, CCAs have also inked contracts for 239.5 megawatts/788 megawatt-hours of energy storage, more than half of it in the last year alone. Of this battery capacity, 86 percent is co-located with solar that charges batteries for use later in the evening, making it potentially suitable for service as grid capacity. These contracts, as well as others that haven’t yet been counted in the CPUC’s baseline, will be eligible for meeting its new procurement targets, as long as they’re able to provide the capacity services required.