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A California Public Utilities Commission proposal calls for 7,500 MW of new power in California, with less than one-third of that carbon free. The recalculation of needed resources covering 2024-26 is intended to address demand for electricity on the hottest days.

The proposal by Administrative Law Judge Julie Fitch seeks to address a resource gap created by the closure of the 2,280 MW Diablo Canyon Nuclear Power Plant and retirements of aging gas-fired plants. Diablo Canyon is currently set to close in 2025 but it could happen sooner.

This proposal for what are called mid-term resources, which is part of the CPUC's Integrated Resource Planning process, includes adding 1,000 MW of geothermal and 1,000 MW of energy storage lasting longer than eight hours. The rest may be all natural gas.

The proposal received mixed reactions.

“It is a very important and thoughtful ruling designed to create a mixed portfolio generation resources to meet the loss of Diablo Canyon’s carbon free generation in the next three to four years,” said Jan Smutny-Jones, Independent Energy Producers executive director.

Capacity with a twist

But the proposed 7,500 MW of capacity comes with a twist. It’s the amount of available megawatts from different technologies used for Resource Adequacy purposes as determined by a controversial CPUC formula. This RA “net qualifying capacity” is largely an evaluation of the amount of capacity available during heat storms, which is now being applied to the IRP proceeding.

“We are happy to see the long overdue procurement of new geothermal and long duration storage but are deeply troubled by the possibility that hybrid solar/storage projects will be excluded,” said V. John White, Center for Energy Efficiency and Renewable Technology executive director. He added that the Commission’s Energy Division staff Resource Adequacy formula “wrongly” concluded that solar has a zero-capacity value. According to CEERT, combined solar-plus-storage projects have greater capacity value than stand-alone storage.

The California Community Choice Association agreed.

“The current peak-based RA program does not fully recognize beneficial characteristics of these resources, such as providing ample energy for storage charging and reducing mid-day peaks,” CalCCA told Current. It and Southern California Edison pitched a joint proposal within the Resource Adequacy proceeding “to better attribute these renewable resource benefits while also taking a more direct look at system needs during the net peak hours.”

The additional 7,500 MW to come online mid-decade is on top of the 3,300 MW of capacity to meet peak demand driven up by high temperatures. The 3,300 MW is to be fully up and running by 2022, particularly when the sun sets as solar power drops off.

The potential new 5,500 MW of projects may include storage with new gas power plants. It also includes megawatts from additions to existing fossil plants and ones that are repowered.

The proposal is similar to the one the CPUC adopted in mid-February to increase resources for this summer .

Replacing Diablo Canyon

The Union of Concerned Scientist concluded that failing to replace Diablo plant capacity with solar, wind and other clean energy resources will increase greenhouse gas emissions by 15 million metric tons over the next decade. That is the equivalent of about 306,000 gasoline-powered cars on the roads.

To push down emissions to meet the CPUC target of 46 million metric tons of carbon dioxide, the most cost effective replacement resources are wind energy and storage, according to UCS’s report released last week, Countdown to Shutdown . That is because of “their relatively low costs and high grid reliability contributions.”

Judge Fitch’s proposal considers increasing planning reserves to avoid a repeat of the August 2020 rolling blackouts. Under a mid-range scenario, the requirement would rise from 14.9% to 20.7%. Operating reserves would increase to 6%, from 4.5%. A high-need scenario would call for a planning reserve margin of 22.5%, and a 6% operating reserve.

Fitch seeks feedback on whether the Commission should use more intense weather conditions in its forecast planning, and set higher planning reserves.

Yet to be determined is how to allocate the costs among utilities, community energy and other providers. Because more investor-owned utility customers are expected to join community aggregators, the costs would presumably be allocated via the exit fee the CPUC imposes on these providers.