Unbuilt but Permitted Plants May Not Be Necessary

By Published On: July 8, 2005

The California Energy Commission heard diametrically opposed views on whether new gas-fired power plants will be needed to ensure the reliability of the state’s electricity grid in workshops aimed at completing the agency’s 2005 Integrated Energy Policy Report. One view holds that adding renewable resources, as well as other augmentations, such as transmission enhancements, can eliminate the need for many of the 8,000 MW of gas-fired power plants that have received CEC construction permits but remain unbuilt. The other perspective is that to avoid blackouts, construction of gas-fired plants must resume shortly because the other expansions are not happening fast enough. “If 8,000 MW of plants were built, investor-owned utilities would have a 40 percent reserve margin,” Bob Kinosian, Office of Ratepayer Advocates regulatory analyst, said. Renewable energy is taking root to serve growing loads, and excess gas-fired capacity in Arizona can supply power too, he told CEC commissioners on July 7. In a related July 1 workshop for the 2005 report, CEC staff laid out California’s vast capacity for renewable energy, including the technical potential for more than 14,000 MW of high-speed wind power, with additional low-speed wind generation potential. The technical potential for central-station solar power generation is 150,000 MW, of which 4,500 MW already are considered economical by the CEC. The Million Solar Roofs bill could add another 3,000 MW of capacity. However, transmission upgrades will be key to bringing most nonphotovoltaic renewable resources to bear, said Wayne Sakarias, Sempra director of legal analysis. But transmission upgrades, renewable power, and other strategies will not fill the growing void fast enough, maintained Greg Blue, West Coast Power senior director of governmental affairs. “At the end of the day, we’re going to have to get back to building new gas-fired generation,” Blue told the commission. To do that, however, it will be necessary for regulators to enforce resource-adequacy requirements and for utilities and other load-serving entities to enter long-term contracts. Blue said that older plants in urban areas can be repowered or used as sites for new generating units that can minimize the need for new transmission facilities.

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