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.
