24/7 Clean Energy: What it means and why California needs it.

My Senate Bill 67, the 24/7 Clean Energy Standard bill, will require utilities and other electricity suppliers to match their increasing amounts of clean energy to the timing of their energy load — on an hourly basis.

As the bill made its way through the legislature this year, my team and I fielded concerns and I decided to make SB 67 a two-year bill while we work to find the right policy framework to put the state on a path to 100% clean energy on a 24/7 basis.

In this week’s Getting to Zero, I explain the logic behind SB 67 — (1) why the current standards are insufficient, (2) who else has already adopted this framework, and (3) how SB 67 will assist in meeting a true 100% clean energy goal — to help provide a better picture for why SB 67 is legislation I’m not giving up on.

First, it’s important to note that existing state standards requiring renewable energy are insufficient to get to a true 100% clean energy goal, inhibiting our long-term GHG emission reduction and reliability goals.

Currently, the organizations which supply electricity, referred to as “load serving entities” (LSEs), have to meet a renewables portfolio standard, in which they are required to purchase enough renewable energy over the whole year equal to 30% of their retail sales of electricity (increasing to 60% in 2030), without regard to hourly or seasonal timing. It doesn’t matter if they are purchasing more renewable energy than they can use in some hours and no renewable energy at all in other hours, as long as they hit the right number in total purchases annually.

This “annual accounting” is fine at low levels of renewable energy purchases, but it becomes very misleading at higher levels.

For those of you getting “100% renewable energy” under a “green tariff” offered by your utility or community choice aggregator (CCA), this is “100%” only in the odd logic of annual accounting where they are purchasing enough renewable energy annually to cover all of your annual usage. The reality is that, for example, the CCAs providing "100% renewable energy" are often buying power from fossil fuel plants for most or all of the electricity that you use during the evening net peak or overnight. If you are charging an EV during low nighttime rates, that is almost entirely powered by fossil fuels. To get to a truly 100% clean grid, we need to stop focusing on annual accounting and start paying attention to how much of our power is clean during each hour of every day of the year, hence the 24/7 Clean Energy Standard.

A few forward-thinking organizations have already recognized this need for matching the timing of their clean energy purchasing to their demand. Google and Microsoft have committed to matching the timing of supply with demand for their own corporate energy purchasing. I’m also proud to say that Peninsula Clean Energy, the CCA providing service to most of my district, is way ahead of the curve in thinking about how they can match their renewable energy purchases to projected load on an hourly basis for every hour of the year, with a strategic goal of achieving 100% time-matched renewable energy by 2025. These leaders in decarbonization should serve as proof and a motivator for state legislators to take note of the importance of hourly (rather than annual) accounting for clean energy.

The other problem with existing policy is that the “100%” clean energy requirement established by SB 100 doesn’t actually cover 100% of California’s electricity generation, as mentioned in my last blog. The figure below from the SB 100 Joint Agency Report shows SB 100 only covers 82% of total electrical loads — the parts labeled “retail sales” and “DWR loads” (for the Department of Water and Power). Another 10% is self-generation, both rooftop solar (5%) and “other self-generation” (mostly privately-owned gas turbines for combined heat and power, 5%).

Pie chart of CA Utility Loads: 80% utility supplies, 7% line losses, 1% other utilities, 5% demand met by PV generation, 5% met by other generation, 2% Department of Water Resources Loads This is power that is (mostly) not part of the grid. The final 8% is power lost in transmission or used by the utilities to run the grid, but not sold to customers. Of the 90% of electricity that is powering the grid (i.e. excluding self-generation), 8% of that 90% (or ~9% of the grid) is excluded from SB 100’s requirement for renewable or zero carbon generation. In plain words, that means that under current law, when we get to 2045 and meet the “100% clean energy” requirement of SB 100, we could still be getting 9% of all of the electricity on the grid from fossil fuel power plants. 

Is that what you thought 100% meant? People in charge of the electricity sector discuss SB 100’s “100% clean energy” target while having the comfort of knowing they can still expect to rely on some gas plants for reliability. But we can’t solve the climate crisis unless we start thinking now about how we are going to get to a truly 100% clean grid and avoid those gas plant emissions by 2045.

Those two problems are my targets for SB 67: (a) it would match our hourly clean energy supply to demand for long-term reliability and emissions reductions in the electricity sector, and (b) it would adjust the SB 100 target to require clean energy for all electrical loads (i.e. a true 100% target).

By shifting the focus to matching clean energy to demand on an hourly (rather than annual) basis, SB 67 would create market incentives that value clean energy that can be produced during the evening net peak and overnight, when certain renewables are less plentiful. These incentives will value energy storage that can shift day-time solar to other hours and will value demand-side flexibility that can shift load away from the hardest-to-serve hours to times when we have a lot more clean energy available. Instead of making demand-flexibility something that has value only during a few peak hours of the year, this legislation would help recognize its value to help match demand to clean energy supply every day. In turn, changing these market incentives would increase long-term grid reliability during peak hours, incentivize more off-hour renewable procurement, and put the electricity sector on a realistic path toward 100% clean energy.

These reasons — the need to incentivize renewable during all times of the day, stimulating demand flexibility and storage, and to adjust state emission reductions standards — are all reasons why we continue to reframe and rework SB 67 to help ease and correctly quantify our climate goals.