The global transition from oil and gas power generation to renewables is progressing through fits, starts, and the occasional blackout.
But in California, where government mandates are driving the transition, there’s a big problem on the immediate horizon: the closure of gas power plants and a nuclear facility that together provide 10 percent of the state’s power.
State regulators’ solution to this problem: get out there and secure renewable substitutes, no matter what. But there’s another catch: those new sources may not be enough to avoid even more blackouts:
California has already been strained to keep the lights on this year. Wildfires have disrupted power transmission and a severe drought has crimped hydroelectric production throughout the West. Those involved in developing the new energy sources say they anticipate significant challenges in moving fast enough to ensure adequate supplies.
And then there are the costs:
The cost of procuring new resources hasn’t been determined, as the process is ongoing, and will likely be partially offset by cost savings associated with the plant closures. But the effort is expected to cost billions of dollars, much of which the state’s utilities can seek to recoup from customers.
Southern California Edison, a unit of Edison International, in 2019 estimated that California’s goal to reach carbon neutrality by 2045 could require up to $250 billion in statewide investments in renewables, storage and grid enhancements.
Bad news for ratepayers. And likely bad news for California businesses, which will enter yet another cycle of rising power costs, coupled with greater grid instability and power outages.
But it could be good news for those states where government is less interested in mandating change, regardless of cost or disruption.