CAISO Releases 20 Year Transmission Outlook
The California Independent System Operator (CAISO) recently released, in conjunction with the California Public Utilities Commission (CPUC) and the California Energy Commission (CEC), a draft of its first-ever 20-year transmission outlook, and it calls for a whopping $30.5 billion investment to meet the state’s clean energy goals.
On the surface, this seems like an unbelievable number, but it starts to make sense once you peek behind the curtain.
Why CAISO Requires Such a Significant Investment
The 20-year transmission outlook sets the baseline for long-term planning and expectations within the state of California. Of course, the term “baseline” implies a dependency on a series of assumptions, which will naturally change over time and likely result in forecast revisions, which is why the initial funding expectation is so surprising because the only direction it can go is up with each baseline revision.
Simply put, an investment north of $30 billion is no joke, and it begs the question – why? Well, the need is being driven by three key factors:
- More consumer demand for renewable energy.
- The increased electrification of transportation, as well as other industries.
- Compliance with Senate Bill 100 which requires 100% of California’s retail electricity to be sourced from non-carbon-producing sources by 2045.
The $30.5 billion breaks down as follows: $10.74 billion for transmission and substation upgrades, $8.11 billion to build new transmission lines that connect to offshore wind, and $11.65 billion for transmission lines that integrate with out-of-state wind.
The report calls for 37 GW of battery storage, 4 GW of long-duration storage, 53 GW of utility scale solar, 2 GW of geothermal generation, and over 24 GW of in-state and out-of-state wind generation.
With all that being said, the CAISO report is a draft and requires additional discussions with stakeholders to identify the long-term architectural configuration as well as the next steps, which should take place through the end of 2022. No matter how you slice it, CAISO clearly has its work cut out for it!
