All eyes on California to figure out energy decarbonization, economic growth, and fairness

Around the world, people are watching California try to decarbonize electricity completely by 2045 while growing its $4-trillion economy and making sure low-income communities share in the benefits of clean energy and avoid any unfair burdens. Some people are looking to learn what to do where they live. Others want to see California fall on its face.

“Many folks are actually really rooting for our California clean energy experiment to fail, but in fact it’s succeeding,” David Hochschild, chair of the California Energy Commission, said Jan. 29 in opening a two-day conference at Stanford University. The CEC is responsible for the planning the state’s energy system. It co-sponsored the first day of the conference, the Stanford Government Energy Summit, which was hosted by Stanford’s Precourt Institute for Energy and the Stanford Doerr School of Sustainability. The day focused on how researchers can help California achieve its climate goals.

“We have to win the climate Super Bowl now,” said Hochschild in reference to the San Francisco 49ers football team winning its conference championship the previous night. “Really, that will only happen if the great California clean energy experiment succeeds.”

The stakes are huge with many challenges between today and success by 2045, speakers at the meeting said. One of the tenets of the strategy is to electrify as much possible of what now runs on fossil fuels, as is happening with vehicles. Electrifying ships, trains, airplanes, heating in homes and commercial buildings has hardly begun. Scientists are trying to find out how to transform industrial processes that today rely on burning coal.

“The world is embarking on the largest transition humanity has ever undertaken,” said Arun Majumdar, dean of the Stanford Doerr School of Sustainability. “All major nations, all major corporations and organizations have made commitments to reduce their emissions, but no one really knows how to navigate this future,”

“Historically, California has been at the forefront of energy and the environment,” said Majumdar, a professor of mechanical engineering, of energy science and engineering, and of photon science. “People in California and from around the world are hungry for a model of thoughtfulness, care, innovation, and solutions. It is our time to step up to the plate and deliver.”

In California, as in other advanced economies, the electricity system in a decarbonized world is expected to deliver about twice as much power or more as today. The existing California grid needs a lot of work. Utilities will be expected to transform the 20th Century to electricity system to a smart grid that can optimize everything from solar farm output to when and where people charge their electric vehicles. Beyond these improvements, utilities must deliver electricity reliably while doubling the system’s size.

A good start, overshadowed

For many reasons, though, California may successfully transform its energy system in a way that is fair to all its residents, while continuing to grow its economy, several speakers said. The state has the world’s fifth largest economy, which could provide the transformative investments and resources needed if researchers and entrepreneurs invent and demonstrate the needed technologies, and if the state and local governments enact effective policies. Some 60% of California’s electricity is emissions-free today, and almost every home has smart meters.

Also, the state is home to some of the world’s best research institutions and is the center of the startup world. California is now making major investments in the ability to store electricity from intermittent wind and solar power. Electricity deregulation, despite a disastrous start more than 20 years ago, is now founded on sophisticated, robust power markets.

The remaining challenges, however, outweigh these first steps and the timeframe is just 21 years. The amount of infrastructure required is enormous, from offshore wind farms to much more energy storage capacity, and from new transmission lines throughout the western United States to many more transformers and higher capacity distribution lines, said Jason Glickman, executive vice president for engineering, planning, and strategy at Pacific Gas & Electric Co., one of the largest U.S. utility companies. Unfortunately, getting a new transmission line permitted and licensed takes 10 years in the United States.

Southern California Edison needs to build new transmission lines at four times the pace of today and new distribution lines at ten times the current rate every single year between now and 2045, said Steven Powell, the utility’s president and chief executive officer.

But perhaps the biggest hurdle will be deploying a smart grid, for which most of the power electronics, software, and privacy protections are still being refined. The ability to reduce electricity demand instantaneously whenever solar or wind output unexpectedly drops will be crucial for a reliable and affordable decarbonized electricity system. With only so much grid-scale energy storage, this means being able to postpone electricity use wherever possible in millions of homes and businesses. Reinventing the grid was a major theme of the day’s conversations.

“An ingredient we need to be focused on as a state is on that load flexibility side, getting a lot more intelligent and surgical about where and when the demand is and the ability to manage that load in a different way,” said PG&E’s Glickman, who earned a bachelor’s and master's degree in management science at Stanford.

Equity and costs

Another big challenge is avoiding past and current inequities. California imports much of its electricity from other western states, and 10% of that power is generated by burning coal. Electricity imports in the United States are associated with about 700 premature deaths elsewhere annually, a Stanford study found in 2022, and low-income people and people of color suffer disproportionately from such deaths, often due to living near or downstream from coal-fired power plants.

California does have many natural gas-fired power plants. The oldest and most polluting of these are called "peaker plants," which are small plants often in urban areas used to meet high, regional electricity demand when no other generation sources are available.

What is important, according to Eddie Ahn, executive director of the California environmental justice organization Brightline Defense, "is looking at what is the overall energy mix and how does it help us, hopefully in the long term, retire peaker power plants across the state, which are, as we heard earlier, primarily cited in low-income communities."

The positive side of a just transition is energy equity, in which historically disadvantaged populations gain access to, for example, EVs, cleaner home appliances, and clean energy jobs. EV ownership today is rarely realistic for people who live in apartments, due to a lack of EV chargers. This disproportionately affects disadvantaged populations.

Nearly every step in the energy transformation costs a lot of money, several speakers noted, and those costs are weighing on California consumers. The investments underway in the state’s electricity system are the main cause of the annual double-digit increases in electricity rates, though much of that is about hardening the grid against wildfires – adapting to the effects of climate change rather than reducing emissions.

Despite the help of much federal funding delivered recently for climate change solutions, “we are at this breaking point in rates,” said Alice Busching Reynolds, president of the California Public Utilities Commission, which regulates and sets the rates charged by California’s three investor-owned utilities.

Ultimately, a couple speakers said, private capital will be needed for most of the transition after public money and electricity bills have demonstrated a successful path.

Still, reasons for optimism exist. Other states, the U.S. federal government, and other countries have modeled many of their energy policies on those in California, several speakers noted. These policies include standards for air quality, vehicle fuel efficiency, and home appliance efficiency, as well as financial incentives for rooftop solar power, EVs, and heat pumps.

“We have the California Energy Commission. We have the citizenry of the state working together. Stanford University and other academic institutions are working together. All towards a common goal,” said Roland Horne, interim director of the Precourt Institute for Energy and professor in Stanford’s Department of Energy Sciences & Engineering. “What we need is policy, not politics.”