Facing a hot summer, California’s Newsom unveils state’s energy purchase plan

SACRAMENTO, Calif. (AP) – For much of the year, California’s push to divest itself of fossil fuels appears to be on track: Electric cars ply the highways, and wind, solar and water power provide most of the power for homes and businesses.

Then it gets hot and everyone in the country’s most populous state turns on their air conditioners at the same time. This is when California came close to running out of power in recent years, especially in the early evenings when there wasn’t as much solar power.

Now Democratic Gov. Gavin Newsom wants to buy massive amounts of renewable energy to help keep the lights on. The idea is to use the purchasing power of the state to persuade private companies to build large power plants that will draw heat from underground sites and strong winds blowing off the coast – this type of energy is not bought by utilities because it is too expensive and would take Too much time.

“We’ve charted the course for solar and wind, but we recognize that won’t get us to where we need to go,” Newsom said during a news conference last week. “The reliability issue needs to be addressed.”

The stakes are high not only for the future of clean energy, but also for Newsom himself. The Democratic governor, now in his second term and widely seen as a future presidential candidate, insists that California will be carbon neutral by 2045. But that goal is often mocked in the summer, when, to avoid rolling blackouts, state officials turn on massive diesel engines. generators powered to make up for power shortages in the state.

Electricity demand in California has increased as the state takes steps to transition away from fossil fuels, including banning the sale of new gas-powered cars by 2035. California will need to supply about 40 gigawatts of new power over the next 10 years, according to the California Independent System Operator, which manages the state’s power grid. One gigawatt is enough to power about 750,000 homes.

If the state buys a lot of energy from offshore wind and geothermal sources, it may mean it will no longer need emergency diesel generators. The wind is usually strongest in the evenings and geothermal energy is available at all times.

This would be a big change for California, where until now utilities were responsible for purchasing their own energy. Consumers would have to pay for new energy purchased by the state as part of a new, still unspecified fee on their electricity bills.

Californians already pay some of the highest energy bills in the country. However, one consumer group said Newsom’s proposal may be better for customers in the long run. State regulators wouldn’t decide what the fee would be until energy projects come online – potentially several years from now.

“Nothing is free here. “The only question is what is the most efficient way to use resources,” said Matthew Freedman, a staff attorney with The Utility Reform Network, a group that advocates for affordable and reliable energy. “We hope this solution will reduce overall costs across the state.”

Newsom’s proposal has support from some of the largest investor-owned utilities in the state, including Pacific Gas & Electric. PG&E spokesman Lynsey Paulo called Newsom’s proposal “probably the most effective way to achieve a clean energy future,” saying the state should make sure the power it purchases is fairly distributed among the state’s utilities.

Public utilities like the Los Angeles Department of Water and Power worry that the state’s entry into the energy market will create new competition, potentially raising prices for everyone in a market already struggling with a lack of supply.

Patrick Welch, legislative director of the California Public Utilities Association, said that if California starts buying power, the state will be competing with utilities, “and that could drive up prices even more.”

“Over the last two or three years, the market for new resources has become incredibly tight,” he said. “This tightness really impacts the price of energy, especially during the summer months.”

Democratic lawmakers amended Newsom’s proposal to address some of those concerns. While Newsom wanted the state to buy any type of power, lawmakers say it should be limited to offshore wind and geothermal energy – two energy sources that utilities do not currently buy. The bill is pending consideration in the legislature.

“When you leave things vague, it creates uncertainty. And at this point, uncertainty is not good in the investment world,” said Assemblyman Steve Bennett, a Democrat and chairman of the budget subcommittee that is reviewing Newsom’s proposal.

Supporters say California is in a great position to try something like this. Last year, five companies spent more than $750 million leasing areas off the California coast for offshore wind projects. According to Alex Jackson, director of the American Clean Power Association, which represents these companies, these projects could collectively generate nearly 5 gigawatts of energy. That’s enough to power over 3.5 million homes.

If we obtain approval, the next step will be to obtain permits and build turbines and infrastructure necessary to transmit energy to the grid. It would be easier for these companies to sell all their energy to the state, rather than selling some of it to multiple energy companies.

“We think there are real benefits to having one buyer,” Jackson said.

Another area ripe for the development of new energy sources is the Salton Sea, a large saltwater lake in southern California that is slowly drying up. Below the surface of the lake bed, heat from the Earth heats the groundwater. Geothermal power plants use steam from this water to spin turbines that produce electricity. The water also contains a lot of lithium, which is used to produce batteries for cell phones and electric cars.

Only a few companies are able to build such large, complex power plants, which take many years to build.

“This isn’t ‘Field of Dreams.’ You need to know that there is a client for this power,” said Assemblyman Jim Wood, a Democrat supporting the proposal. “Otherwise it will be impossible to appeal to investors to be able to allocate the resources to invest the billions of dollars that will be required.”