During the annual California Economic Summit, public and private leaders in the energy industry emphasized the need for creative innovation across energy sectors as the state approaches Governor Gavin Newsom’s goal to achieve carbon neutrality by 2045.
During a panel discussion on “Electrify Everything: Electricity Demand and the Future of the Grid,” Ana Matosantos, Boston Consulting Group senior advisor and former cabinet secretary in the governor’s office, broke down BCG’s July report on sustainable, efficient solutions to meet the state’s ambitious climate goals.
The report’s key factors of analysis were reliability, cost and timing. Matosantos praised community choice aggregators (CCAs) for developing procurement and bringing more online developers.
She did, however, call for a 10-fold increase in distribution projects and four times or more the amount of transmission, equating the desired pace to one in which the government would coordinate under a state of emergency as California will need to nearly double the amount of grid capacity over the next 20 years
“And as 2020 taught us, our tolerance for an event like one in 10 is a lot lower than previously assumed from a planning standpoint,” Matosantos said.
She took the issue back to the economy, having seen investors’ concerns around reliability and connection as a reason not to invest in the state.
Jason Glickman, PG&E’s executive vice president of engineering, planning and strategy, echoed Matosantos’ concern for meeting new demand. He hopes to see greater use of the state’s current energy assets as opposed to increasing the pipeline.
“Every 1000 megawatts of data center load we bring on — and we've got over three gigawatts in our pipeline right now — has the opportunity to reduce rates by a percentage point or two,” he said, adding that PG&E is focusing on creating an incentives to consume low carbon electricity.
Dawn Weisz, CEO of the not-for-profit public agency MCE, shared that her organization has had successes at the regional level, such as a pilot program that refurbished 100 abandoned homes with smart tech, including water heaters, EV chargers and solar battery storage — and then selling them to first-time homebuyers.
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“This is a multifaceted, win-win solution, obviously, because it's helping folks that may not have access to these smart features in their home, typically to live in a smart home and then to benefit by continuing to be a part of our [virtual power plant],” Weisz said.
She added that, although a small pilot, the virtual power plant is able to aggregate load from the devices and shift it within houses, which then benefits the grid. She said that this would ideally be scaled up to have a real impact — which it will be, since MCE was awarded $5 million from the California Department of Conservation.
She also noted a MCE flex market program, which allows anyone in California to shift load for the MCE in exchange for high rates of up to $800.
“That created a lot of innovation,” Weisz said. “We had hundreds of vendors sign up within just a couple of months.”
Now PG&E and the other Investor-Owned Utilities – which in California includes SoCal Edison and San Diego Gas and Electric – are launching similar programs to MCE with instruction from the California Public Utilities Commission.
With so much interagency and industry collaboration, Elliot Mainzer, president and CEO of the California Independent System Operator, said the Federal Energy Regulatory Commission agreed to help CAISO procure transmission planning and interconnection queuing.
“It really does require exquisite collaboration and coordination to take that friction on the system, which is why I really appreciate this broader look and saying … we have very ambitious goals. But if we want to do this reliably and — at the end of the day — efficiently and affordably, it is going to require a lot more coordination and a lot more focus here in the years ahead,” Mainzer said.
All panelists agreed that affordability is key for implementing and meeting the state’s climate goals. Weisz concluded that public agencies should be charged with educating customers on how to opt-in to energy efficiency, for instance, by signing up for automated load shifting programs or reducing use during a heat wave.
On Tuesday, the governor's office announced that California has increased its battery storage by 30% over the last six months, now at a total of 13,391 megawatts.
"To put this progress into perspective, it took the state nearly five years to reach 10,000 MW in early 2024 but just six months to add the most recent 3,000 MW," his office wrote.
California is now a quarter of the way to making up the 52,000 megawatts of energy storage capacity its predicted to require by 2045.
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