California’s Energy Future: A Conversation with Chair David Hochschild

As California confronts rising demand, wildfire-driven costs, and federal policy uncertainty, VX News spoke with California Energy Commission Chair David Hochschild on the state’s entry into a new phase of energy deployment—defined by speed, scale, and resilience. Highlighting record growth in battery storage, the expansion of virtual power plants, and a surge in private-sector investment, Hochschild frames clean energy not just as climate policy, but as industrial strategy—with major implications for data centers, critical minerals, and global competitiveness.

“Google paid roughly three times more for Intersect Power than it did for YouTube. That gives you a sense of how critical energy infrastructure has become to the data center ecosystem.” – David Hochschild

Chair Hochschild, briefly reintroduce yourself for our readers and outline the mission and core responsibilities of the California Energy Commission (CEC).

I’m David Hochschild, Chair of the California Energy Commission. We’re the state’s primary energy planning and policy agency, and we oversee a broad portfolio of programs—from permitting large-scale clean energy projects like batteries and solar, to setting building and appliance efficiency standards.

We also manage California’s world-leading clean energy research and development program, and we’ve been deploying public funding for EV charging infrastructure—particularly fast-charging networks—and supporting emerging technologies ranging from direct air capture to long-duration energy storage. We also operate the world’s largest virtual power plant, along with a range of other initiatives.

In our last conversation ahead of past VerdeXchange Conferences, you characterized California as entering the “great implementation era.” Now with years of experience, what progress have we made in actually getting shovels in the ground?

It’s a really exciting time. Despite all of the chaos right now, nationally and globally, we’re now at over two-thirds of California’s electricity coming from clean energy sources like solar and wind, and we’re building projects at a scale never seen before.

For context, electricity first came to California after the Gold Rush in 1850, and in the 176 years since, we’ve built about 105 gigawatts of utility-scale capacity. Thirty of that has come just since Governor Newsom took office in 2019, so a massive buildout. Last year alone, we added roughly seven gigawatts of new capacity.

The scale of projects now underway is remarkable. We have the world’s largest battery storage project under construction in West Fresno County: a $5.5 billion project called Darden, paired with large-scale solar. We’re also installing wind projects with the largest turbines ever deployed in the state at 5.9 megawatts each. A lot of this doesn’t get the attention it deserves.

I read Abundance by Ezra Klein—a great book that offers a needed critique of governance, but it misses what’s actually happening in clean energy deployment.

All of this is happening while demand is rising. We’re adding about 1,200 EVs per day. We’re electrifying buildings at scale. Temperatures are rising, increasing cooling demand. And now we have AI and data center load growth.

Despite that, we’ve been able to meet grid needs. We haven’t had a Flex Alert in over three years. And at the same time, we’re hitting major milestones.

Last year, we achieved 100% clean energy on the grid for part of the day on 279 days. That’s never happened before, and these are big milestones. As we green the grid, we’re electrifying everything. We now have more EV charging plugs than gasoline nozzles in California, and we’re all-in on continuing that momentum.

What’s proven harder to get off the ground between generation, solar, and/or storage projects?

Right now in the U.S., it takes about seven years to build a new combined-cycle natural gas plant. And if you look at nuclear, we’ve only built two new plants this century. The most recent, Vogtle in Georgia, took 17 years and cost $37 billion.

What’s going in quickly is clean energy—solar and storage. The architecture of those projects is much simpler, with far fewer components, and they’re increasingly automated to manufacture and install. The technology is improving rapidly, so deployment is fast and that’s a good thing because we need the resources.

For a long time, electricity demand in California was flat. Now it’s rising for all the reasons we’ve discussed, so it’s very helpful that these technologies lend themselves to rapid installation.

As electricity demand surges—driven in large part by AI and data center expansion—how is the Commission ensuring California captures the economic opportunity, rather than losing load and investment to other states?

A couple of things. First, we’re driving electrification through policies like our building energy code. The latest update for new construction took effect January 1—which is pushing electric heat pumps into the mainstream. About a decade ago, maybe 1% of new construction was all-electric; now it’s over 80%, and still rising.

Second, we’re focused on capturing the broader economic benefits. We fund programs that support in-state manufacturing, and today there are over 50 facilities in California producing electric vehicles or batteries.

You also see a growing ecosystem of companies—like Copper in Berkeley working on induction stoves with integrated batteries, Redwood Materials in electric construction equipment, Gradient developing low-cost heat pumps, Monarch building electric tractors, and Zūm deploying electric school buses. We stay closely connected to that entire ecosystem and want to continue leading on innovation. A key priority is improving battery energy density, reducing costs, and enhancing safety.

To that end, we recently launched California’s first battery hub focused on advanced lithium chemistry, with $28 million in funding. That facility is coming online this summer, and we expect it to support a wide range of industries that depend on better battery performance.

Critics argue that California’s microgrid proceeding (CPUC, 2024), by limiting off-grid distributed energy resources, has fallen short of the state’s own mandates to commercialize microgrids—particularly for emerging loads like data centers and industrial decarbonization. Is that a fair assessment?

No, because there’s nothing that would prevent a company from installing solar and battery storage on-site. If you’re not connected to the grid, there’s no regulatory barrier to doing that. In fact, it’s fairly common in remote locations. There’s no rule I’m aware of that would prohibit someone from developing their own on-site generation and storage and managing their own load.

The main constraint is simply, the capital cost.

Let me turn to lithium: Our recent interview with Rod Colwell of Controlled Thermal Resources (CTR) described Lithium Valley as a rare bipartisan opportunity. Might you elaborate on how the Commission is working with companies like CTR as part of California’s broader energy and critical minerals strategy?

We’ve worked very closely with CTR for a number of years, along with other lithium developers in the space. I do think mineral recovery is one of the areas where there’s real potential for bipartisan collaboration. It’s clearly in the interest of both California and the United States to increase domestic mineral independence—particularly for critical materials like lithium, manganese, zinc, and rare earth elements used in magnets.

It’s been a challenging year given some of the uncertainty at the federal level, particularly with the Department of Energy, but long term this should be an area of strong alignment. Regardless of federal policy, electric vehicles are a growing market. California already has about 2.5 million EVs on the road, and the global trajectory is clear. China, for example, is now at roughly 60% EV sales and rising rapidly.

Lithium is going to be a strategic resource, and California is uniquely positioned. According to the National Labs, we have enough lithium reserves to support roughly 380 million EV batteries, so we’re very encouraged by and supportive of the work happening across the ecosystem.

ERI’s CEO, John Shegerian, recently shared that after investing in a large recycling facility within the State [of California], the project ultimately moved to Indiana due to permitting and associated cost challenges.

Is that indicative of broader permitting constraints in California?

I’m doing everything I can from my position to reduce friction and accelerate projects like that, because they’re good for the state. We want to see the clean energy economy develop and flourish here, and I do think this is an area where we can improve.

At the same time, other states are often far more aggressive with incentives. I recently visited Tesla’s electric semi facility in Nevada—Nevada provided roughly a 10-year tax holiday to make that happen. In hindsight, that’s probably a good bet for a $3.7 billion facility.

It can be difficult for California to match that level of direct subsidy across every project. That said, we are supporting a number of promising efforts—from new steel manufacturing to emerging clean-tech companies scaling up.

We also work closely with GO-Biz and leverage tools like the Advanced Energy Manufacturing Tax Credit, which provides sales tax exemptions for equipment and distributes roughly $100 million annually to support in-state manufacturing.

Let’s turn to AB 205, which created the Energy Commission’s Opt-In Certification Program for energy projects. Are projects now moving faster through the regulatory process?

Yes, we’re seeing a number of projects move through the process, predominantly solar and storage. That’s not exclusive, but those technologies are currently the most competitive in terms of cost and speed to deployment.

The first project to move through our fast-track permitting process was the Darden project—the largest battery storage project in the world. It uses American-made solar panels, American-assembled batteries, and components like steel and trackers from California-based suppliers.

Importantly, the opt-in process also requires community benefits agreements. For example, Darden includes nine such agreements, supporting everything from fire services to local organizations. That project is now under construction, so we’re very pleased to see real progress and steel in the ground.

With renewables expanding but reliability risks still front of mind, what role should clean, dispatchable resources like Diablo Canyon play in California’s long-term energy mix?

We should think about electricity much like water. If it stops flowing, you have a problem. Reliability has to come first. People depend on electricity for everything from medical devices to transportation to basic daily life, so our goal is to make it as close to uninterruptible as possible.

The good news is we’ve made real progress. After the August (2020) outages which affected roughly half a million customers, the state’s focus became “never again.” Since then, we’ve been building a much more resilient grid in the face of climate pressures, including extreme heat and wildfire risk, which can damage transmission infrastructure.

A big part of that resilience is utility-scale battery storage. We’ve deployed about 17 gigawatts over the past seven or eight years—which is a massive addition, considering the state has about 105 gigawatts total capacity. We’ve also built out a demand-side virtual power plant, the largest in the world, using customer-owned batteries that can respond to grid signals and feed power back when needed. That’s been incredibly valuable, and it complements firm resources like Diablo Canyon, which remains the largest power plant in California.

Looking ahead, the goal is to make everything connected to the grid a “good citizen”—responsive, flexible, and able to interact with real-time signals. That’s how we fully leverage these newer, more nimble technologies.

I was just in Australia, where they deployed 265,000 batteries in the last six months alone. A majority of homes there now have solar, and they’re using batteries effectively to support grid reliability. I share this as a glimpse of where things are headed. We’re leaning into these new technologies and gradually moving away from the older model.

Given increasing federal uncertainty, what are the key drivers that will sustain this momentum going forward: policy, capital, or market demand?

Look, we’re a state of 40 million people, and we’re not debating whether climate change is real. Los Angeles has burned. Large parts of the state have burned. I live in the Bay Area—we had a day during wildfire season when the smoke was so thick it turned midday into night. Streetlights came on at noon. My wife got sick, my kids got sick. Everyone in this state has lived through this. So we’re not having an abstract debate…we know what’s happening.

At the same time, California is built on innovation. Six of the ten most valuable companies in the world are based here. We’ve seen how this economy can take new technologies from concept to scale—and now we’re seeing a major transfer of talent and investment from high tech into clean tech. That’s driving much of the clean energy transition. It’s embedded in our economy, our culture, and how we think about the future. We want to confront climate change, and we believe innovation is how we do it.

For years, the critique was that climate policy would hurt California’s economy. But when we began this push in earnest, around the time of the 33% Renewable Portfolio Standard—we were the 10th largest economy in the world. Today, we’re the fourth. We’ve surpassed countries like the UK and Japan.

We’re not going to be cowed by what I think is an absurd national turn back toward older technologies. We believe in the technologies of the future, and California is strong and resilient. We’ve been through tough moments before, and we’ll get through this one too. I’m proud to be a Californian now more than ever, and I think of our role as helping keep the flame alive during uncertain times.

As affordability, electrification, and speed to power take center stage at VX26, how aligned are California’s core energy institutions—CEC, CPUC, CARB, and CAISO—in actually delivering on those priorities?

We work very closely with CAISO and the CPUC. We don’t agree on every issue, but we coordinate across a range of proceedings and share a common goal: delivering clean, affordable, reliable power. At the same time, we’re navigating multiple overlapping challenges. There’s extreme heat and wildfire risk, which directly impact grid reliability. There’s federal policy uncertainty—including potential rollbacks of tax credits for solar, wind, and electric vehicles, which would disproportionately affect California.

And we’re dealing with rising electricity rates. The primary driver, according to Lawrence Berkeley National Laboratory, is wildfire. Specifically, the costs of vegetation management, undergrounding lines, and broader system hardening. Climate change is directly increasing the cost of maintaining the grid, so we’re navigating a difficult moment—but we have a strong team, and with a gubernatorial transition ahead, the focus is on sustaining momentum while making the adjustments needed to ensure long-term affordability and reliability.

And as discussions around system-wide resilience grow—particularly in the face of climate-driven events and cyber threats, any final thoughts on California’s preparedness for large-scale infrastructure disruption?

We do a significant amount of scenario planning, but one lesson is clear—you can never prepare enough. There are many potential threats, and cyber risk is one I take very seriously.

We’ve seen incidents before, like the attack on the Metcalf substation, and we know the grid faces a wide range of vulnerabilities. So a lot of our focus is on staying ahead of those risks through coordination, planning, and constant adaptation.

You can’t predict exactly how an event will unfold—but you can build systems and institutions that are ready to respond.