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California retail electricity sales growth to fall on increased PV: CEC

Highlights

California's retail sales of electricity are expected to grow more slowly over the next decade because of a jump in anticipated photovoltaic capacity, especially among homeowners, a preliminary analysis by the California Energy Commission showed July 7.

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Under a mid-case demand scenario, the CEC expects retail sales to increase by 0.68% per year to about 283,000 GWh in 2025, about 4.4% less than the commission's last estimate, approved in January, of about 296,000 GWh and a 1.06% annual growth rate.

The CEC also expects peak demand to grow to about 68,900 MW by 2025, down from the commission's previous estimate of 70,600 MW under a mid-case scenario.

The peak growth forecast was lowered to 0.89% per year, down from 1.13% annually, according to the CEC assessment.


Statewide mid-case electric use estimates are also down slightly to about 319,600 GWh in 2025 compared with the CEC's previous 320,900 GWh forecast.

The CEC expects electric use to increase by 1.2% per year over the next decade, down from the previously anticipated 1.23% growth rate.

The preliminary demand forecast will be revised in the next few months, Chris Kavalec, a CEC staffer, said Tuesday during a presentation on the analysis.

The preliminary forecast, for example, only includes approved energy efficiency programs, efficiency standards and building codes.

The revised forecast, to be issued this fall, will also include additional achievable energy efficiency savings that are likely to occur, as well as recently approved efficiency standards, he said.

The CEC divides its forecast into high-, mid- and low-demand scenarios.

The California Public Utilities Commission uses the forecast to help establish procurement requirements for utilities and it also feeds into the transmission planning and resource adequacy processes at the California Independent System Operator.

The rapid rise of rooftop solar is taking a bite of the CEC's energy and load forecasts.

By 2025, distributed photovoltaics will produce 21,000 GWh to 25,000 GWh annually, making up 9%-11% of the state's electric use, according to the analysis.

At the same time, the CEC expects the solar capacity will lower peak demand by 4,500 MW to 5,400 MW by 2025, assuming installed capacity of 12,000-14,000 MW of rooftop solar.

The estimate lowers electric use by about 13,000 GWh and peak demand by about 2,000 MW compared to the CEC's last forecast, according to Kavalec.

The CEC's near-term forecast for solar may be too conservative, according to Asish Gautam, a staffer in the commission's demand analysis office.

However, a PUC decision last week to change the state's tiered rate structure may reduce solar adoption by about 1,600 MW because it would reduce the state's highest rates, making solar less economically attractive, he said.

The growth of electric vehicles will partly offset increased distributed generation, according to the preliminary assessment.

The CEC expects electric vehicles to use 3,600-8,000 GWh in 2025, up from about 300 GWh this year.

--Ethan Howland, newsdesk@platts.com
--Edited by Derek Sands, derek.sands@platts.com