trending Market Intelligence /marketintelligence/en/news-insights/trending/cnrhnhy6uaaapo6wqgfr8a2 content esgSubNav
In This List

Calif. energy system must change to meet climate goals, report says


Despite turmoil, project finance remains keen on offshore wind

Case Study

An Energy Company Assesses Datacenter Demand for Renewable Energy


Japan M&A By the Numbers: Q4 2023


See the Big Picture: Energy Transition in 2024

Calif. energy system must change to meet climate goals, report says

Meeting California's climate goals will require a "fundamental transformation" of its energy system to finally move away from fossil fuels, a new report said.

According to the 2017 Integrated Energy Policy Report, this transformation can already be seen in the ever-increasing amount of renewable fuels in California's electricity system and the move toward an electrified transportation system. Still, more work is needed to significantly cut greenhouse gas emissions from the energy sector, said the report, which was produced by the staff of the California Energy Commission and adopted by the commission on Feb. 21.

"The state will need to draw upon a wide variety of solutions to meet its goals while navigating an evolving market structure," the report said.

The report, also known as IEPR, is produced every other year to assess and update major energy trends and issues facing California's electricity, natural gas and transportation fuel sectors. The 2017 edition provides an overview of issues familiar to those following California's electricity sector—the impact of community choice aggregators, the growing use of rooftop solar, and the role utilities like Southern California Edison Co., Pacific Gas and Electric Co. and San Diego Gas & Electric Co. will play in the growth of electric vehicles.

One particular change, the growth of solar and wind resources, has helped cut greenhouse gas emissions but has also brought challenges in maintaining the reliability of the grid, the report said. To counter that, the report recommended the use of price signals aimed at adjusting energy usage to help better manage the grid and integrate renewable resources, along with support for regional coordination activities.

A vulnerable state

"Of high importance are improved understanding and tracking of the environmental (greenhouse gas and other) impacts of dispatch of the system under different market arrangements, dispatch coordination, and generation mixes," the report said.

California can also take steps to make its energy system more resilient to the impacts of climate change, given that it is particularly vulnerable to climbing temperatures and a rise in the sea level, the report said. Among other impacts, high temperatures will lead to an increase in peak electricity demand as people turn on air conditioners, while sea-level rise increases the risk of flooding of infrastructure in coastal areas. The report also noted that roughly half of the 20 largest and most destructive wildfires in California history happened in the last decade.

"Given the impacts of climate change in California, and of wildfires in particular, there is a continued need to coordinate between state and federal agencies to encourage and advance utility relationships with federal, state, and local governments to ensure that infrastructure plans and improvements are consistent with climate adaptation goals," the report said.

That work should include advancing policies that support utilities and governmental cooperation in sharing regional operations and maintenance plans, and coordination to ensure that rights-of-way remain accessible to utilities and safely maintained, the report recommended.