CEC’s Vice Chair Siva Gunda on the What’s Being Accomplished to Meet California’s Clean Energy Goals

CEC’s Vice Chair Siva Gunda on the What’s Being Accomplished to Meet California’s Clean Energy Goals

VXNews
Commissioner Gunda, given California’s pace in setting the Clean Energy transition goals and the CEC’s charter to help the State achieve these ambitious goals, could you elaborate upon how
California Energy Commission (CEC) is leveraging the billions of federal dollars flowing into the State from, among other sources, the Inflation Reduction Act (IRA)?

 

Siva Gunda
Thanks, David. The CEC has been playing an active role on the energy front, collaborating and coordinating with all the state agencies.

One, we’re carefully tracking the federal monies out there and considering how we can coordinate applications to push them forward. The CEC received approximately $330 million in funding from the US Long Duration Energy Storage (LDES) Program from the state. Concerning budget challenges, we have been looking to backfill those dollars through federal money.

Two, as you know, the money that smart guards over a billion dollars for the Yuba City power plant. It’s so essential to put money into technologies that we plan to recreate with foreign resources, so that's another one.

The other big one, as you know, is hydrogen and ARCHES’ billion dollars, so we are closely tracking that.

Overall, the CEC's role has been tracking, coordinating, and ensuring that whoever is interested at the state level, we have a forum for them to apply. We've also just submitted a couple of applications in response to DOE proposals and money for kick-starting projects.

VXNews
Given the scale of the Grid’s capacity challenges, how achievable are the State’s push goals?

Siva Gunda
As we look towards clean electricity goals, at a minimum, we’re talking about roughly 150,000 new megawatts that have to come into the system to hit our electrification and clean energy goals and meet reliability.

The first point we're looking at is several 100,000 megawatts of resources coming online. As you pointed out, we have to ensure that it's reliable and affordable, and also the third one is equitable, right?

In terms of reliability, the most important part is that we have the necessary planning, looking at reliability as a planning regime.

The second point regarding reliability is extreme weather events. As we move forward, the pace of climate change will make it harder to fight it. We have to make sure that we have those additional resources, whether those are demand flexibility, or in the very near term, some of the resources that are soon to retire, like pulling power plants. In the near term, we’re thinking about what resources we can keep online and for the long term, considering the possibility of substituting them with cleaner resources – or demand flexibility.

On the affordability question, we have multiple components; the generation component, the transmission component, wildfire issues.. and such. Some of these things, like wildfire mitigation and other climate programs, have been baked into rates. I think the generation component could help with cost over time. With more electrification, the generation component could decrease and improve rates.

Finally, in terms of exploring this carefully, we have the SB 100 report next year. As part of that, we’re studying several scenarios, and then looking at the cost-benefit ratio for each one of them, considering the reliability, affordability, as well as

non-energy benefits.

VXNews
That leads to a related question - is there the planning and necessary State collaboration between regulatory agencies to get what’s needed to be built and operational?

Siva Gunda
It is going to be very challenging. If it was easy, it would’ve been done. It's going to be challenging even in the best of circumstances, provided the number of agencies who are statutorily obligated to get this done. The agencies must work in a very coordinated fashion. We're working from the same set of assumptions and ensuring that all our processes are well lined up. To do that, we have the SB 100 forum to work together. We also have our reliability forum where the interagency principals and commissioners hold weekly meetings to discuss the reliability journey, and we have been doing that since 2020. On transmission planning, as you know, CAISO has a forum but we are also working internally. We regularly get together to ensure that we're all on the same page. CAISO created a product called the 20-year outlook, which has been important for us to think about the long term.

The other part is about how much we have to build. Overseen by GO-Biz, all the agencies attend the forum every week to make sure we understand the

project-by-project development issues that may arise. We consider how to solve them together. Even though we're taking all these steps, as we think about moving forward, scaling is a challenge.

There are times when building resources is harder, like the earlier part of the year, because of the weather. It's not just hard to begin the build, but we have to sustain the rate of building. On the other end, we see everything from supply chain issues to investment challenges. As we think through these processes, one of them is coordination, but another is alignment with the innovation, supply chain, and investment opportunities. We all need to coordinate and collaborate to ensure we reach that scale.

California energy policies are clearly progressive and proactive and so

well-articulated that oftentimes, the challenges of execution are overlooked or minimized.

VXNews
Are the State’s goals for its energy grid too aggressive?

Siva Gunda
It's always good to look at the challenges with the background of success. When we look at the last four years, 2020 through today, CAISO has added 18,000 new megawatts. Overall, totaling California’s supply, it might be another 1,000 megawatts.

This year, we're expecting to add 7,000 megawatts. Last year, we added over 6,000 megawatts, and with the steel in the ground by this year, California will be at over 100,000 megawatts, right?

That's important in the success story.

In the last four years, we went from 200 megawatts to 600 megawatts of storage on the grid. When you include behind-the-meter storage penetration, you’re talking about 10,000 megawatts of new resources in just storage. So it’s important to note that even when we have to confront the challenges of transmission, planning, and interconnection as we move forward, we are fully taking advantage of all the processes we have in place to do that.

As we move forward and think about adding thousands of megawatts of generation every year, we need to keep the transmission coming up with it. One of the core issues with that is that the planning and building take time. It takes time because we have all these processes to ensure we're doing the most cost-effective thing.

Efficiencies happen when we look at the margins, but now we're looking at a much broader scale. At this point, the processes have to change so that the scaling can happen. The state is taking the right steps, with the Permit Streamlining Act passage in 2022, CAISO’s zonal approach to transition planning, and CBOCs streamlining of oversight and the CEQA. All of them are in place to further our processes to build faster, but we must continue to innovate and ensure that the transmission is built.

VXNews
Could you address the role of federal-state collaboration regarding the State’s clean energy goals?

Siva Gunda
Provided the federalism we currently have through the federal government, they play a pivotal role through the FERC and DoE in aligning processes to allow interstate collaboration. One of the issues of building transmission regarding planning within California, as we spoke about, is pretty hard. Once we talk about planning across states, it's much harder.

I think there are three elements that we need to think through and across interstates, or multiple states. One is a forum for us to plan these things together. FERC Order 1000 calls on the states to exchange information and work with each other, sharing about what they're doing. That’s good but not sufficient enough as a forum.

Over the last two to three years, we’ve had several voluntary forums, creating pathways for voluntary regional planning and construction. With that in place, we acknowledge we can always benefit from the federal government’s resources and further guidance on exchanging information.

The Department of Energy (DoE) has had an important role in working with the states to figure out how best to build this and where to build it., How are we going to afford it? Which state is going to pay how much? Those are important things that the federal government can do to create forums and build trust across the states.

This would reduce the current information asymmetry, enabling states to work together on these massive projects as needed.

VXNews
Let’s pivot to specific CEC funding and initiatives, specifically concerning CCS. Could you please elaborate on CEC's interest in and the potential of CCS?

Siva Gunda
The state is exploring CCS. You know, we are putting that federal money into work, you know, that is CCS, CCUS, direct air capture, you know, we have multiple forms that can take into effect and we'll talk about the 30,000-foot level need first, and then think about how CCS fits in.

When you look at the build-outs required for 2045 as we mentioned earlier, it's between 150,000 megawatts of new resources then another 50,000 depending on reliability purposes in the face of climate change– that's just the scale of it. We're talking about 2 to 3 million acres of new land and sea space development required. Do we have that amount of land and sea even when we constrain the land use from environmental, you know, culturally sensitive lands, we still have those lands, but can’t we build it?

The question is, are there other ways to reduce build or even optimize the amount of build? That's where you have both demand-side resources and high-energy density. So in small land usage, provided how many intermittent resources we expect to have in the future, we need resources that can be dispatched to maintain the grid’s frequency and balance. Between those two things, there aren't a lot of options.

Storage is an incredible success story for California, including the long-duration energy storage but as we think about maintaining the firmness of the grid, energy-dense resources, and seasonal resources, that's where CCS fits in. CCS could be an important resource for providing those attributes.

When we look at certain scenarios in SB 100 85% of the natural gas fleet has to be retained, just to run for 5% % of the time. When we talk about that, it’s another element of decarbonizing existing fleets, making them cleaner, and that's where CCS fits in.

The last point is for load-serving entities that are very geographically and transmission-constrained, like LADWP they're thinking about hydrogen combustion or other resources that can give them reliability locally. When we think about all of these firm resources, such as resources with CCS, there's a role for them, but the cost is a concern. Hopefully, alternatives become more acceptable as they show up. This is a hard job for all of us, but I'm glad we're all in this together.

VXNews
Let’s turn to the State’s selection for a Hydrogen Hub grant, the promises of ARCHES, and hydrogen in California. What’s CEC’s role in Hydrogen and ARCHES?

Siva Gunda
The CEC’s role is primarily on the planning side and policy development. The CEC is statutorily required to develop demand forecasting as a common planning assumption for the state. As part of that work, we must understand how hydrogen will be produced.

Is it through biogenic processes? Is it electrolysis? When, where, and how is it going to be done? We need to bake that into our planning processes to bring in the necessary resources. From the planning side, we do supply and reliability analyses. If hydrogen truly has an opportunity to be a demand flex solution, you could ramp up and down the electrolyzers. We have the opportunity to support the grid. That's another important area that we'll be carefully watching. From the policy side, we see a lot of money that the CEC has to put out through the transportation arena and hydrogen is something that we carefully track and invest in. We have a couple of bills that direct the CEC to look at the potential of hydrogen for the grid and also the zero carbon funding sources benefits. Overall, we have some planning, modeling, and policy areas to work on in this energy transition.

VXNews
California is not alone in considering Hydrogen to reduce greenhouse emissions – Japan is also advanced in Hydrogen. VerdeXchange’s Conference will feature the promise of US/ India climate collaboration.

Could you speak to those opportunities for California to collaborate globally?

Siva Gunda
The Energy Commission as part of a California delegation met with several Indian federal agencies and state governments to discuss the opportunities for California and India to work together on a variety of climate issues.

Thinking about California's global role, specifically in collaboration with India, there are pieces. First is the importance of sub-national leadership. As global policies change, the local and regional levels tend to be more fixed. Sub-national leadership provides those opportunities, whether it's cities or states. In that sense, California accounts for approximately 1% of global emissions and almost 1.5% of the planet. California has the resources and will to shape and support a global agenda on climate solutions, and India is an emerging economy projected to house the largest amount of renewables in the world. We need to learn from what India is doing to scale, but we could also share with them the successes that we have in California.

How do we do our integrated resource planning? Forecasting? What are the successes and difficulties that we've experienced with solar? They were interested in the rooftop solar, concerning how it worked out and how the policies changed and evolved. On the other side for us, it’s amazing to watch the scale at which they are building renewable resources. And I think as India builds on that resource at scale, you know, the, the economies of scale, show up, it's going to drive down prices. It's going to be lessons learned. One of the things we heard from one of the states was planning to add about 120 gigawatts of renewables just for green energy. Those scale numbers are amazing and a huge opportunity for India to lead in the global south and beyond. We look forward to our collaboration with India.

VXNews
In closing, could you comment upon, and perhaps clarify California’s policies regarding solar power incentives?

Siva Gunda
Solar is a critical resource for the future. It’s a given in all modeling as a source that can offer scale, it's clean, and we understand how to use it. If you're specifically talking about the recent decisions made by the CPUC, I think it's really important to note that the incentives are lined up.

It’s a fact that it has created a cost shift, but it's also important to note that solar has other potential benefits like equity, and it's a real balance. I think the central takeaway is that solar is an important element for California.

 

“As we look towards (California’s) cleaner edge goals, at a minimum, we’re talking about roughly 150,000 new megawatts that have to come out of the system to hit our allocation and clean energy goals.”.