The proposed decision, issued on 19 July, is on an initial need determination for centralised procurement of long lead-time (LLT) resources, as directed by the bill that California Governor Gavin Newsom signed into law in October 2023 (bill AB 1373). Under the bill, the CPUC may request that the Department of Water Resources (DWR) procure electricity from diverse LLT resources on behalf of customers of all load-serving entities (LSEs) under the Commission’s integrated resource planning (IRP) purview.
In its proposed decision, the CPUC determines the need for centralised procurement of up to 10.6 GW of nameplate capacity across four technologies: up to 7.6 GW of (floating) offshore wind, up to 1 GW of enhanced geothermal systems (EGS), up to 1 GW of multi-day long-duration energy storage (LDES), and up to 1 GW of LDES with a discharge period of at least 12 hours.
The Commission also notes that a subsequent, informal request may be sent to DWR within six months of the adoption of the decision that would require DWR to initiate procurement activities.
The CPUC has also outlined a procurement timeline for each of the four technologies, with solicitation of offshore wind energy capacity spread across three rounds. The first round is proposed to be held in 2027, the second in early 2029 and the third in late 2029.
Source: “Fact Sheet: Proposed Decision Determining Need for Centralized Procurement of Long Lead-time Resources”; CPUC
“A number of parties commented that this schedule outline was somewhat too slow to attract enough interest from developers. At the same time, we are cognizant of the fact that DWR will need time to put together its team to handle the solicitations and all of the tasks leading up to them,” the CPUC states in the proposed decision.
“Thus, the schedule we put forward below provides a general framework, but we expect adjustments will need to be made as this effort progresses. We also expect that DWR itself will want to present at least some aspects of its plans to stakeholders to receive feedback prior to launching any solicitations.”
On 22 July, Offshore Wind California, the state’s industry coalition, welcomed the CPUC issuing the proposed decision and setting the procurement target, noting that it was not the full 10 GW the industry recommended but that the 7.6 GW was still “a significant increase from what the CPUC was considering earlier this year”.
“This 7.6 GW interim target for the state to procure offshore wind at scale will help California deliver on its course and commitment to deploy a nation-leading 25 GW by 2045. It is well within the 7 to 10 GW potential that experts and the industry estimate for the five initial offshore wind lease areas off California’s Central and North Coast,” Offshore Wind California said in a press release on 22 July.
The CPUC’s proposed decision for centralised procurement comes shortly after the California Energy Commission (CEC) adopted a final strategic plan to guide the development of offshore wind energy in the state.
