A new newsletter from ACP-CA
Welcome to The Current, a new newsletter from American Clean Power-California. Our goal is to deliver an accessible industry perspective on clean energy legislation, regulation and happenings in California every other Wednesday, starting with this edition.
I'm Wes Venteicher, ACP-CA's communications director based in Sacramento. If you like what you see here, please help get the word out. New readers can subscribe at cleanpowercalifornia.org. Thoughts, ideas and feedback are welcome – email me at wventeicher@cleanpower.org.
Missed (inter)connections
A real connection is hard to find for many clean energy developers in California.
They’re offering a lot: hundreds of megawatts, titled land and hard-earned permits. All they need, in many cases, are relatively simple upgrades to the transmission system to ensure they can deliver power to customers. But it’s hard to get utilities to commit to completing the upgrades on a firm timeline. The upgrades are delayed more often than they’re on time, and now the delays are imperiling hundreds of millions of dollars in federal tax credits.
The One Big Beautiful Bill Act, passed by Congress over the summer, phases out tax credits that offset clean energy development costs and make electricity cheaper. Projects must come online by 2030, at the latest, to qualify for the credits — a tight turnaround for large-scale projects that power thousands of homes.
Around California, billions of dollars' worth of clean energy projects are positioned to meet the deadline, but a number of them depend on transmission system upgrades that have been repeatedly delayed — some to beyond 2030.
A newly updated California Public Utilities Commission report illustrates the extent of the issue, finding that delays are “widespread across California’s electric grid,” affecting a combined 64 percent of PG&E and SCE’s transmission projects (SDG&E didn’t provide enough information for the CPUC to include in its analysis).
Nearly 22 gigawatts worth of energy projects in development — enough to power more than 16 million homes — depend on hundreds of upgrades that have already been delayed, according to the report. California Independent System Operator data show many delays have stretched to 10 years or more.
Many of the required improvements are relatively minor, like expanding a substation or replacing an old power line with a modern, higher-capacity version. In the Central Valley near Fresno, for example, a substation and two power line upgrades would clear the way for hundreds of megawatts of advanced-stage solar and storage projects.
PG&E first estimated in 2020 that it would build the substation by the end of 2021. Then PG&E said 2027. Then 2028, 2029, 2030, and — as of July — 2031. The line upgrades have faced similar delays.
In the CPUC’s new report, which was required under 2022's SB 1174, PG&E offered a range of reasons for delays across its system, including staffing and supply chain issues. The utility reported the most common reason was “bundling dependencies,” in which projects can’t get started until another project on the grid is completed. Those delays are exacerbated by the fact that many projects don’t advance between April and October, when the grid is more stressed than the rest of the year, according to PG&E’s explanation in the report.
The lengthiest delays were related to permitting, with delays often stemming from project redesigns triggered during CEQA or other permitting processes, according to the report.
The report notes that PG&E “does not mention any specific mitigation efforts” to address bundling dependencies or project redesign, the top two reasons for delays on transmission projects affecting 3.8 GW of solar and storage.
The Fresno-area upgrades represent low-hanging fruit where a lot of new power depends on minor upgrades. The state should use incentives or penalties or other means, such as letting developers take on system upgrades or equipment purchases themselves, to hold utilities accountable to project timelines.
It’s not just the federal tax credits that are at risk. CPUC President Alice Reynolds warned the utilities about broader effects of the delays in 2022, three years before the OBBBA came around.
“Absent an effort to direct serious attention and sufficient resources to meet the growing pace of interconnections, delays will derail critical projects, threaten grid reliability, and impede California’s clean energy progress,” Reynolds said in letters to the utilities.
The Newsom administration has taken preliminary steps this year to speed things up. Newsom directed state energy agencies on Aug. 29 to find ways to streamline permitting, reviews, approvals and grid connections for projects that might be able to meet the tax credit deadlines. A report on those efforts is expected soon.
And Reynolds sent a new batch of letters to California’s three investor-owned utilities in November asking them to explain what they’ve done so far and to suggest improvements going forward.
“Time is of the essence,” Reynolds told the utilities in 2022. That’s even more true today, but the delays persist.
Reynolds requested responses to the latest letters by Jan. 15. If history is any guide, the state will need to be a more assertive matchmaker if it wants to fix these delays and avoid backsliding on its clean energy goals.
More power, faster
The CPUC also cited the expiring tax credits in a September proposal to order the IOUs and other load-serving entities to buy more power to fortify the grid between 2029 and 2032.
The agency floated the order, which would direct LSEs to procure an additional six gigawatts, based on affordability and reliability concerns raised by ACP-CA, PG&E, SCE, CAISO and other parties in another CPUC proceeding.
New electricity demand forecasts keep outpacing planners’ official estimates due to the rise of data centers, electric vehicles, electric appliances and other factors. At the same time, some supplies — such as offshore wind and rooftop solar — are coming online later and at smaller quantities than had been anticipated.
On top of that, federal orders are making clean energy more expensive by imposing tariffs on imported equipment, slowing down permitting and eliminating tax credits.
The CPUC's proposed order is a short-term patch to deal with rising demand and the anticipated supply crunch while planners are developing a whole new long-term framework known as the Reliable and Clean Power Procurement Program.
ACP-CA asked for something similar back in July, when we suggested the CPUC issue an emergency purchasing order due to rising demand and the expiring tax credits. We found the tax credits save California between $400 million and $650 million per gigawatt of solar or wind.
That’s a big discount on power the state urgently needs. California shouldn’t pass up the chance to grab it.
Do birds think solar panels are water?
Solar arrays are much cheaper and more efficient than they were a decade ago.
They could also be better for birds, according to a study published in November in the journal Environmental Research Letters.
The study’s authors revisited the “lake effect” hypothesis, which posits birds might be mistaking solar fields for lakes and dying when they treat them as such.
The theory was developed in 2014, when dead aquatic birds were found near a utility-scale solar installation in Southern California. Assessments at other sites followed, finding more dead birds near Sonoran and Mojave Desert solar installations.
The hypothesis remains unproven, but those first findings saturate the lake-effect literature and have influenced solar development far and wide, affecting costs and contributing to the 2023 denial of a permit in Alberta, according to the new study.
However, just as the hypothesis was taking hold, two important technological advances were sweeping the solar industry.
Up until then, most solar panels were installed at fixed angles facing south. But in 2015, technology that adjusts panels to track the sun from east to west became dominant, accounting for more than half of new installations. Anti-reflective coatings also became standard, improving efficiency and reducing the light polarization that might be catching the birds' attention.
When the authors of the new study surveyed the lake-effect literature, they found that few analyses distinguished between the older fixed-angle installations and those with the newer tech. One particular study that is widely cited included 97 percent fixed-tilt installations and extrapolated the results to sites across California with the newer tech.
When the older technologies are excluded, “data to support the lake effect hypothesis is sparse,” the study’s authors found.
In other words, investigators and policymakers should take care going forward to differentiate between the older tech and the newer.
