3. Policy Background
California has an aggressive suite of environmental policies. The California Global Warming Solutions Act of 2006 (AB 32) requires that California reduce statewide greenhouse gas emissions to 1990 levels by 2020.1 Additionally, Executive Order S-3-05 calls for an 80% reduction in emissions from 1990 levels by 2050.2
California law requires that 20% of retail electricity sales come from renewable resources.3 This mandate is in the process of being expanded to require that 33% of retail electricity sales come from renewable resources.4
California is currently undertaking an effort to retire, repower, or replace several thousand megawatts of aging, inefficient fossil fuel generation facilities in order to mitigate the environmental impacts of once-through cooling, comply with the Clean Water Act,5 and transition the state's generation fleet to cleaner, more flexible resources.
This Commission has also established a comprehensive set of policies and programs to promote energy efficiency, demand response, distributed generation, renewable energy, reliability, reasonable electricity rates, and other goals established in the Energy Action Plan and elsewhere.
California's energy policies require the development of new types of renewable and distributed generation resources, such as wind and solar. These resources by their nature are intermittent and may not be directly dispatched by system operators to meet customer load. Since operators of the electricity grid must constantly match electricity supply and demand, intermittent renewable resources are challenging to incorporate into the electricity grid. Additionally renewable generation can often occur at times when there is reduced demand for power. Energy storage technologies may provide an effective means for addressing the challenges of relying upon intermittent and off-peak renewable generation.
Energy storage technology may also offer California economic and environmental benefits. By utilizing energy storage technologies to store intermittent and off-peak renewable power, the state may: reduce greenhouse gas emissions from carbon-based electricity production; avoid the need to build more transmission and generation facilities; increase system efficiencies and reliability; and, generate economic activity through the manufacturing and operation of new technologies.
However, the full costs and benefits of energy storage technologies are not known. How those costs and benefits should be allocated throughout the electric system is also not established, in part because these technologies may provide multiple services such as generation, transmission and distribution.
1 AB 32 (Stats. 2006, ch. 488).
2 Governor Arnold Schwarzenegger, Executive Order S-3-05, June 1, 2005.
3 California's Renewables Portfolio Standard (RPS) was established in 2002 under Senate Bill (SB) 1078 (Stats. 2002, ch. 516, Sec. 3) and accelerated in 2006 under S.B. 107 (Stats. 2006, ch. 464, Sec. 13).
4 In response to Executive Order S-21-09, the California Air Resources Board (CARB) adopted Resolution 10-7-1, which approved a thirty three percent Renewable Electricity Standard. CARB's finalization of this Resolution is expected by the end of 2010. The Resolution would take effect on January 1, 2012.
5 See, Statewide Water Quality Control Policy on the Use of Coastal and Estuarine Waters for Power Plant Cooling, adopted on May 4, 2010.
