California, which is one of the leading states in the US for promoting energy transition, is marching swiftly towards achieving its 2045 goal of a carbon-free energy sector and an interim target of 60 per cent renewable energy by 2030. In 2022, the state adopted offshore wind (OSW) goals of reaching up to 5 GW by 2030 and 25 GW by 2045, and witnessed the first sale of OSW lease areas off its coast. It is anticipated that OSW will further generate record amounts of power from renewable energy sources. However, these developments will pose a huge challenge for the state grid operator, California Independent System Operator (CAISO), which is the largest ISO in the western interconnection.
To ensure smooth integration of the expected new renewable energy generation into the transmission grid, in May 2023, CAISO released the 2022-23 Transmission Plan as part of its annual 10-year transmission planning process (TPP). The plan has more than doubled the number and value of projects than that in the previous plan. The new plan identifies 45 system expansion and upgrade projects worth $7.3 billion for the next decade as compared to the 23 projects worth $3 billion included in the 2021-22 Transmission Plan.
These plans are developed in collaboration with the California Public Utilities Commission (CPUC), the California Energy Commission (CEC) and other key stakeholders. Notably, this year’s plan follows a more proactive and coordinated approach to power, transmission and interconnection planning as agreed upon in the December 2022 MoU between CAISO, the CPUC and the CEC. The MoU strengthens the connections between resource and transmission planning activities, interconnection processes and resource procurement to help the state meet its clean energy goals.
Under the plan, there is a focus on allocating transmission capacity in specific geographic zones where development is deemed most viable. Concurrently, the CPUC will direct power providers to concentrate their energy procurement efforts within these transmission zones. The ISO will prioritise interconnection requests for projects located in these designated zones. This new zonal model has the potential to address the existing challenges related to interconnection processes.
The 2022-23 Transmission Plan will support over 40 GW of new resource development identified by the CPUC as cost-effective and essential for meeting the state’s clean energy goals over the next 10 years. The commission recently established that next year’s transmission plan will be based on a requirement of 70 GW by 2033, reflecting the potential for increased electrification occurring in other sectors of the economy, particularly transportation and buildings.
Under the new plan, transmission projects are categorised as reliability-driven [required to serve load reliably to meet the North American Electric Reliability Corporation (NERC) standards], policy-driven (required to transfer renewable energy generation to load centres to meet state clean energy goals), and economic-driven (which makes energy more affordable for ratepayers by, for example, reducing grid congestion costs). It also considers local capacity requirement studies conducted for 2023 and 2027 as part of the state’s resource adequacy programme. These studies serve as a basis for assessing whether additional capacity procurement by CAISO (particularly energy storage systems) is needed. Additionally, the 2022-23 planning cycle includes the long-term local capacity requirement study CAISO conducts every other year to support state resource planning efforts.
The CPUC provided a base portfolio and a sensitivity portfolio to CAISO for use in the 2022-23 TPP. The following table includes resources selected with Full Capacity Deliverability Status (FCDS) as well as those selected as Energy Only (EO) interconnection status. FCDS signifies that the grid can deliver the generator’s full, expected output to the grid under peak load conditions while EO status signifies that the generator’s output can be delivered subject to grid conditions. EO generators are ineligible to provide resource adequacy capacity.
The portfolios comprise solar, wind (in-state, out-of-state and offshore), battery storage, geothermal, long duration energy storage, biomass/biogas and distributed solar resources. All portfolio resources are modelled in policy-driven assessments except in the on-peak deliverability assessment in which only FCDS resources are modelled.
Starting from the 2021-22 TPP and the 20-Year Transmission Outlook (released in March 2022), CAISO initiated an evaluation of transmission capabilities to accommodate OSW in the central and northern coast regions. The analysis revealed that 5.3 GW of transmission capacity is available in the central coast area near the Diablo Canyon nuclear power plant, which is scheduled to be retired by the end of 2025. Additionally, in the Morro Bay area, where gas-fired generation has been decommissioned, there is potential for OSW integration. If Diablo Canyon remains operational or deliverability is retained, the available capacity for OSW interconnection in the area would be around 3 GW. In the northern coast area, integrating OSW will require the development of transmission infrastructure to accommodate the capacities outlined in the CPUC sensitivity portfolios.
In the current planning cycle, CAISO has continued its assessment, and the base and sensitivity portfolios included 1,588 MW and 3,100 MW of OSW, respectively, for the Morro Bay Call Area. The capacity is expected to increase to 3,100 MW in the central coast area and 1,500 MW in the Humboldt Call Area in the sensitivity portfolio. CAISO has been actively exploring transmission alternatives, particularly in the north coast area, during this planning cycle and intends to continue doing so in the next planning cycle, in which OSW resources in the Humboldt Call Area will be included in the base portfolio.
Of the total base portfolio wind resources from out of state, 1,062 MW originates from Wyoming or Idaho and 438 MW from New Mexico. The sensitivity portfolio capacity is split between Wyoming (1.5 GW), Idaho (1 GW) and New Mexico (2.33 GW). These resources necessitate the establishment of new transmission infrastructure. Two out-of-state subscriber transmission developments to accommodate the wind resources in Wyoming (TransWest Express) and New Mexico (Sunzia Southwest Transmission) are currently under way. CAISO is also actively evaluating the Southwest Intertie Project-North (SWIP-North) project proposed by LS Power as part of the ongoing planning analysis for the 2023-24 Transmission Plan. Idaho Power has shown interest in accessing part of the 1,000 MW South to North capacity in the SWIP-North project and discussions have been initiated regarding potential joint participation. Idaho Power is conducting a thorough analysis of the SWIP North Project as part of their 2023 Integrated Resource Plan (IRP), which is scheduled to be submitted to the PUC by September 30, 2023.
The SWIP North Project and the TransWest Express Project are expected to deliver substantial amounts of out-of-state wind power to the Harry Allen-Eldorado area, which necessitates addressing the combined impact on the existing Western Electricity Coordinating Council Paths in the region.
The 2022-23 Transmission Plan earmarks 45 projects for system expansion and upgrades, and was pared down from an earlier version of the plan that called for $9.3 billion in investment across 46 projects. The selected projects are within the Pacific Gas and Electric Company, Southern California Edison, San Diego Gas & Electric, and Valley Electric Association service territories.
The key projects include a new 500 kV line running west from the Arizona border into southern Imperial County; new 500 kV transmission lines angling up from southern Imperial County to northern San Diego and extending into the southern LA Basin; and upgrades to the existing 500 kV and 230 kV lines along the Interstate 10 (I-10) corridor. Together, these upgrades provide access to east Riverside County, Imperial County as well as Arizona solar power generation, Imperial Valley geothermal generation and New Mexico wind generation.
Further, it includes upgrades to the 230 kV Lugo-Victor-Kramer transmission system to access north of Lugo solar resources; and a host of smaller upgrades improving access to other smaller resource zones. CAISO also found a need for a new 500 kV line from southeastern Nevada to the eastern edge of the LA Basin and rebuilding the existing 230 kV transmission infrastructure in south-eastern Nevada to 500 kV, providing access for Eldorado and Pisgah solar generation, south-eastern Nevada solar and geothermal generation, and Wyoming and Idaho wind generation.
The recommendation for the 500 kV Trout Canyon-Lugo Line project, estimated to cost $2 billion, has been held back due to pending additional analysis of stakeholder input, and may be considered as an extension to this or the next planning cycle. With this, there are only three projects eligible for competitive solicitation.
CAISO’s 2022-23 TPP reflects a comprehensive assessment of the transmission system to ensure reliable and efficient electricity supply in the coming years. The plan addresses various aspects, including transmission capabilities for integrating offshore wind, and the evaluation of out-of-state wind resources. It serves as a roadmap for enhancing transmission capabilities, integrating renewable energy resources, and ensuring a reliable and sustainable electricity supply for California. The key lies in timely implementation of the plan.