Newsom wants state to purchase power to prevent blackouts.

California Governor Gavin Newsom’s Plan to Purchase Renewable Energy

California Governor Gavin Newsom is taking steps to directly purchase power generated by renewable sources, such as geothermal and offshore wind, to prevent blackouts as he aims to phase out fossil fuels rapidly. This plan hopes to solve the competing challenges of meeting growing electricity demand while pursuing aggressive climate change targets and improving electric reliability in a state plagued by the threat of rolling blackouts in recent years.

California’s Ambitious Greenhouse Gas Emissions Targets

California has some of the most ambitious greenhouse gas emissions targets in the nation, aiming to reach 100% clean electricity by 2045. However, the state has run up against a wall during extreme heat or wildfire events that in some cases have led to outages. The tight margins mean the state needs new generating capacity, but it doesn’t want to turn to just any source. The state’s policies strongly disfavor fossil fuels compared to carbon-free sources.

• The governor’s office estimated California will have to install 148,000 megawatts of new clean power by 2045 to meet its climate goals, up from 35,000 MW now.
• California already has significant renewable energy resources, leading all other states in solar generating capacity.
• Newsom’s plan would focus on developing offshore wind and geothermal resources and battery storage projects.

Developing a Central Procurement Mechanism

Newsom’s office proposes the development of a “central procurement mechanism” to create demand and finance new renewable energy projects. Under the proposal, the state would buy the power produced from renewable sources, and ratepayers would be charged. Project development complexities and market fragmentation among sellers “have failed to result in significant procurement of certain diverse resources,” Newsom’s plan said. “A central procurement mechanism combining the buying power of customers could cost-effectively procure these types of resources, with the resulting benefits spread among all customers,” it added.

Renewable Energy vs. Traditional Resources

Congress is actively debating whether to pass legislation that enables more rapid development of renewable energy over traditional resources, as California and the Biden administration favor, or whether to support more traditional energy by ordering more leasing for fossil fuels on federal lands and reducing regulations for fossil fuel-fired power plants. Additions of renewable power generation are outpacing new fossil fuel-fired plants as they become cheaper and as utilities retire coal- and gas-fired plants to reduce their emissions or avoid regulatory costs.

At the same time, the bulk power system faces protracted grid reliability problems, which the nation’s grid watchdog has blamed on an imbalance between additions and retirements. Jim Robb, CEO of the North American Electric Reliability Corporation, said during a congressional hearing Thursday that the pace of coal retirements is “disorderly,” threatening grid reliability.

California’s plan to purchase renewable energy directly is a step in the right direction towards achieving its ambitious greenhouse gas emissions targets. It’s important for Congress to support the development of renewable energy over traditional resources to ensure a clean and reliable grid for the future.