The new RPS is an increase on the previous RPS of 33%, already considered to be high.
Most of the new wind power will be installed after 2020. That is in addition to 1.5GW of new wind from 2015-20 assuming there is no extension of the Production Tax Credit (PTC), says Bloomberg New Energy Finance (BNEF).
Still, the new RPS is expected to boost solar more than wind — by 18GW to 34GW by 2030, if the compliance is filled entirely with wind and solar, which are projected to be the two main beneficiaries. Solar typically gets a ‘time of day’ boost in California power purchase agreements for providing electricity closer to peak times than does wind. The best sites for new wind also tend to be farther from load centres.
The Clean Energy and Pollution Reduction Act was passed by both houses of the state legislature in mid-September after a compromise under which lawmakers dropped a controversial element to halve petroleum use by vehicles.
The new RPS was signed into law by California Governor Jerry Brown, a pioneer in supporting renewable energy, on 7 October.
California currently has over 6GW installed capacity, and gets about 30% of its electricity from utility-scale renewables, although that can surge to 40%. The state, the world’s eighth largest economy after Brazil, has for some time had an RPS of 33% by 2020, the toughest in the nation for a populous state. The EU as a whole, for example, is seeking 20% renewables by 2020.
The new RPS is expected to have a large impact post-2020 because utilities are already on track to meet or exceed 33% — to a degree that may have surprised even utility executives. "The [utilities] contracted well and they contracted early," said Madeline Yozwiak, a BNEF power and renewable energy certificate (REC) analyst.
Electricity providers will have to source 40% of their retail electricity sales from renewables by 2024, 45% by 2027, and 50% by 2030. Most generation must come from ‘bucket one’ projects within California or those directly connected to California’s grid, but 10% can be met with ‘unbundled’ tradable RECs linked to generation from anywhere in the western grid.
Developers of major wind projects in states such as Wyoming should benefit, for example Anschutz Corp’s planned 1.5GW Chokecherry & Sierra Madre project. Two large high-voltage transmission lines are planned from Wyoming to the California grid, including the TransWest Express (TWE). Wind imported via the TWE project remain ‘bucket one’ under the new RPS legislation, said Kara Choquette, TWE’s communications director.
"California’s leadership in increasing its RPS to 50% further enhances the need for and the value of regional transmission," she said. California’s onshore winds tends blow at night, whereas Wyoming’s are stronger during the day.
It remains to be seen, however, how much incentive there will be to import such far-flung wind. Amy Grace, chief wind analyst at BNEF, foresees imported Wyoming wind as no cheaper than offshore wind post-2020.
California’s 50% legislation – which requires energy efficiency to double by 2030 –specifically encourages a regional electricity grid. The California Independent System Operator (CAISO), which oversees the state grid, is to become part of a regional grid across the western states, which is in line with CAISO’s aspirations. This would allow more renewable energy to be integrated successfully. More legislation would be required for such a scenario.
California’s new RPS could encourage a wider adoption of clean electricity. There are 29 states with an RPS, not counting Washington DC. They are considered to have boosted US wind power more than the federal on-off PTC. Even so, the main RPS demand nationally is confined to California, New England and the PJM states in the Upper Mid-Atlantic and west to Michigan and parts of Illinois, according to BNEF.
The in-state clean electricity needed for California’s new 50% RPS is expected to account for a staggering one-third or so of the utility-scale renewable electricity required for state standards nationally by 2030, says the Union of Concerned Scientists’ Laura Wisland, a senior analyst.That calculation is based on data from the Department of Energy’s Lawrence Berkeley Laboratory.