Neutralizing California's carbon emissions by 2045, in line with current state policy, requires the Golden State to roughly quadruple its installed base of power generation and storage capacity to 356 GW to electrify transportation and buildings, according to a new report highlighting one utility's vision for transforming the world's fifth-largest economy.

The report, released April 5 by Sempra subsidiary San Diego Gas & Electric Co., or SDG&E, projects California's electricity demand will nearly double between 2020 and 2045 as drivers, homeowners and businesses increasingly adopt vehicles and appliances powered by electricity.

"Accelerated electrification of transportation and other sectors is essential to California and our region's sustainability. It is also incredibly important that California takes electric reliability into consideration and doesn't leave anyone behind when developing a decarbonization road map," SDG&E CEO Caroline Winn said in a statement.

"While the exact combination of technologies and investments needed to get to net-zero is unknown at this time, what is certain today is that a flexible and diversified approach to decarbonization is both prudent and necessary to help ensure we are eliminating carbon emissions while also safeguarding grid reliability," added University of California-San Diego professor David Victor, who advised on the study.

The report, which also relied on technical assistance from Boston Consulting Group and Black & Veatch, modeled wind and solar resources to account for 58% of statewide electric generating capacity, or 205 GW, by 2045, creating a significant need for flexibility to integrate the variable resources. Toward that end, SDG&E envisions 40 GW of new battery storage; 20 GW of green hydrogen-fired generating capacity; and 4 GW of natural gas capacity with carbon capture and sequestration, or CCS.

Such assets would combine with a vast expansion of imported renewables from other states — an estimated 34 GW by 2045 — and the retention of some existing gas generation.

Under state energy regulators' interpretation of the 100% Clean Energy Act of 2018, also known as Senate Bill 100, natural gas generation can continue to serve nonretail load or system losses after 2045, meaning the state's electric sector has no mandate to completely cease gas-fired power generation. However, renewable and zero-carbon resources must cover all retail sales by that time. California also has a goal to reach carbon neutrality across all sectors of its economy by 2045.

Uncertainties abound

The SDG&E report seeks to provide a "starting point" for reaching net-zero carbon emissions, though Southern California Edison Co. presented its own vision in November 2019 and state regulators are collaborating on various aspects of decarbonization. For instance, energy regulators helped the California ISO, the wholesale grid operators for most of the state, for the first time look 20 years into the future to plan for transmission, including the integration of 120 GW of new renewables by 2040.

SDG&E acknowledged that "the challenges, technologies and solutions associated with decarbonization are constantly evolving." Among the unknowns are the cost of technologies and the pace at which consumers will adopt electric vehicles and appliances, which will influence demand for electricity, it noted.

The Sempra utility's recommendations include California's implementation of a regional transmission organization to more fully integrate Western power grids and a call for regulators to reconsider some technologies currently excluded by agencies' interpretations of SB 100.

"Technologies such as blending hydrogen into the fuel mix for natural gas generators or natural gas generation with CCS can enable California to meet its interim emissions goals and help ensure reliability," the report said.

The utility is encountering opposition to some recommendations.

"San Diego Gas & Electric has been really aggressive trying to push the agencies that are responsible for implementing that law to basically disregard the zero-emissions requirement and put CCS in play," Sara Gersen, a senior attorney with environmental group Earthjustice, said in an interview. "This report is very much part of that effort."

While green hydrogen combustion "would be a permissible solution for our carbon goals," it could also jeopardize local air quality because of the associated significant nitrogen-oxide emissions, Gersen added.

"That risk of polluting the air by burning hydrogen at power plants is why we at Earthjustice are very skeptical about plans to rely on hydrogen combustion on the power grid," Gersen said.

The attorney applauded SDG&E's recommendation for incentives to help lower-income households acquire new electric appliances and vehicles.

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