Wind

California proposes purchasing 7.6 GW of offshore wind over the next decade

The state’s proposal also calls for enhanced geothermal and long-duration energy storage.
California proposes purchasing 7.6 GW of offshore wind over the next decade
(Courtesy: Paul Langrock, offshorewindca.org)

It’s no secret that massive renewable energy projects, especially offshore wind ventures, take some time to construct. With that in mind, the California Public Utilities Commission has proposed committing to purchasing a massive amount of wind power over the next decade, intending to spur development in specific areas.

On Friday, the CPUC proposed an initial need determination of up to 7.6 GW of offshore wind, up to 1 GW of enhanced geothermal systems, up to 1 GW of multi-day long-duration energy storage (LDES), and up to 1 GW of LDES with a discharge period of at least 12 hours.

This proposal stems from provisions of Assembly Bill 1373 (Stats. 2023, Ch.367), signed by Governor Gavin Newsom in 2023. AB 1373 authorizes the CPUC to request that the Department of Water Resources (DWR) conduct centralized procurement of certain eligible long lead-time (LLT) resources on behalf of customers of all load-serving entities (LSEs) under the Commission’s integrated resource planning (IRP) purview. Those long lead-time resources include offshore wind.

The plan will be heard, at the earliest, at the Commission’s meeting on August 22, 2024. By September 1, the Commission is required to make an initial need determination for procurement using a centralized procurement mechanism. If a need is found, within six months the Commission may then request DWR to exercise the centralized procurement mechanism.

The amounts selected are maximum amounts, according to the CPUC. Once a procurement request is made, DWR will conduct solicitations and evaluate the quality of bids received, including costs and ratepayer risk provisions, and may procure anywhere between zero and the upper limits included in this decision. This flexibility will facilitate cost containment and minimize ratepayer risks.

The resources selected by CPUC will help California achieve its greenhouse gas (GHG) emissions reduction goals for 2045 and represent emerging technologies that need to achieve economies of scale to bring costs down, the Commission says. However, the cost of these investments will ultimately impact electricity bills. In its proposal, CPUC maintains all possible efforts should be made to contain costs, reduce ratepayer risk, and seek other sources of funding to reduce development costs and share in the long-term costs and benefits.

This proposal also requests that, for this LLT procurement, DWR convene a procurement group that includes representatives from LSEs. In addition, the decision sets a tentative schedule of solicitations, asking DWR to conduct two rounds of solicitations for LDES and EGS, beginning in 2026, and three rounds of solicitations for OSW beginning in 2027. The Commission will reevaluate the need determination for additional LLT resources in every IRP cycle when considering a Preferred System Plan portfolio. In the next IRP cycle, the Commission will specifically evaluate LSE progress toward LLT procurement requirements in D.21-06-035, and consider whether an additional need determination for conventional geothermal resources for CPE procurement is necessary.

Earlier this month, the California Energy Commission (CEC) adopted a comprehensive strategic plan guiding the development of offshore wind. The plan outlines analysis and strategies to deploy floating turbines off the state’s central and northern coasts with a goal of 25,000 MW of capacity by 2045, enough to power 25 million homes. There are nearly 35 GW of renewable resources on California’s grid today, but the state is believed to need an additional 148 GW to reach its 2045 goal, likely requiring ocean development.