Renewable Energy

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Renewable Energy

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2024
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Renewable Energy

Renewable Energy

California has set ambitious renewable energy and decarbonization goals, including a target to reach carbon neutrality by 2045. Following the passage of Senate Bill (SB) 1020—the Clean Energy, Jobs, and Affordability Act of 2022—in August 2022, which set interim targets of 90% clean electricity by 2035 and 95% by 2040 on the way to carbon neutrality by 2045,⁶³ California set its sight beyond the coastline by passing laws that would support its very young offshore wind industry. In September 2023, Assembly Bill (AB) 1373 was signed into law, which authorizes the Department of Water Resources (DWR) to serve as a central procurement entity to procure energy resources in order to help the state meet its renewable and zero-carbon energy resources and reliability goals.⁶⁴ Additionally, the state passed AB 3 in October 2023, to develop a 2nd-phase plan and strategy for seaport readiness for offshore wind energy developments.⁶⁵

In 2023, total renewable energy generation in the power mix was 36.9%, up 1.1% compared to 2022. Electricity generation from RPS-eligible renewables (in-state generation plus imports) increased by 761 gigawatt-hours (GWh) from 2022 to 2023, the second smallest year-over-year increase since 2008. While California maintains a significant lead in electricity generation from renewables, with an average yearly growth rate of 1.7% from 2008 to 2023 (compared to the U.S. rate of 0.8% over the same time period), the growth rate has slowed in recent years. Historically, the fastest growth happened from 2015 to 2016 (grew 3.5% by absolute terms) and growth has slowed since 2018, averaging just 1.1%. California needs to recommit to adding more renewables to the grid in order to meet our goals.

In 2023, in-state generation’s share of RPS-eligible renewables made up 73.5% of the power mix. Historically, in-state generation has accounted for just under three-fourths of RPS-eligible renewable generation, with imports from the Southwest and the Northwest grids making up the rest. Over time, the share of renewables from Northwest imports has fallen to 10.3% while the share from Southwest imports has risen to 16.2% in 2023. To meet the 2026 goal of 50% of generation from RPS-eligible renewable sources, California’s share of electricity generation from renewables would need to increase by 4.4% each year from 2023 to 2026, revised upward from 3.5% previously.

California faces two major roadblocks in expanding its renewable energy capacity. First, solar and wind curtailments are rising, and the shares relative to in-state generations are also increasing gradually. In 2023, CAISO curtailed 2,679 gigawatt-hours (GWh) of solar and wind output, up 8.6% compared to 2,449 GWh curtailed in 2022. In addition, the interconnection queue, the backlog of projects seeking to connect to the grid, has been growing significantly in recent years. Most of these backlogged projects have an energy storage component. As California continues to surge forward in its commitment to propel the clean energy transition, the state’s power grid will face considerable strain as more electric vehicles are adopted and there is increased demand for cooling due to heat waves.

Renewable Electricity Generation and Power Mix

In 2023, The percentage of total power mix (in-state generation plus imports) from renewable sources⁶⁶ increased to 36.9%, a rise of 1.1% compared to 2022.
California maintains a significant lead in renewables, with an average yearly growth rate of 1.7% from 2008 to 2023, compared to the rest of U.S. growth rate of 0.8%.
Solar and wind are the largest renewable sources, making up 17.0% and 11.2%, respectively, of the state’s total power mix.
In 2023, generation from solar (in-state generation and imports) fell by 2.3% compared to 2022—the first time when year-over-year generation fell. Solar generation increased by 21.8% from 2021 to 2022.
Meanwhile, wind energy’s contribution to the power mix increased slightly (+0.4%) from 31.1 GWh in 2022 to 31.4 GWh in 2023.

Installed capacity has been falling gradually for other RPS-eligible renewables such as biomass (1,262 MW in 2023, down from 1,321 MW in 2019) and has been stagnant for geothermal (2,744 MW in 2023 versus 2,712 MW in 2019).
In 2023, imports supplied 26.5% of California’s RPS-eligible renewable energy, with 10.3% from the Northwest and 16.2% from the Southwest.
The share of Northwest imports that are from RPS-eligible renewables rose sharply from 30.0% in 2022 to 67.2% in 2023, but the share of Southwest imports from the same sources decreased from 37.5% in 2022 to 33.8% in 2023.
Electricity generation from RPS-eligible renewable sources and large hydroelectric accounted for 48.6% of the power mix, up from 44.9% in 2022.
From 2014 to 2023, California added 24.1 gigawatts (GW) of utility-scale capacity into its grid, mostly from solar (19.1 GW). The remaining additions were mostly natural gas (3.2 GW) and wind (1.5 GW). During the same period, the state retired 12.3 GW of utility-scale power plants, mostly from natural gas (10.9 GW).

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Renewable Portfolio Standards (RPS) and Community Choice Aggregators (CCAs)

Renewable or clean energy mandates are in effect in twenty-nine states, Washington, D.C., and two territories. Three of these states (Hawaii, Rhode Island, and Vermont) plus Washington, D.C. have a 100% RPS goal. California is one of the 16 states with RPS targets of at least 50% of retail electricity sales.
Electricity generated from RPS-eligible sources in the total power mix reached 36.9% in 2023 and will likely miss the interim SB 100 goal of procuring 44% of retail electricity sales from RPS-eligible renewable sources by the end of 2024.
To meet the 2026 goal of 50% of generation from RPS-eligible renewable sources, California’s share of electricity generation from renewables would need to increase by 4.4% each year from 2023 to 2026, revised upward from 3.5% previously.

In 2024, total estimated annual load in Community Choice Aggregations in California increased by 4.4% from 2023 to 2024, totaling 65,809 gigawatt-hours (GWh) in 2024.
Although all CCAs are on track to meet the overall RPS requirements (44%) for the 2021-2024 compliance period in 2024, the CCAs’ aggregated RPS percentage is expected to drop slightly from 59% in 2023 to 57% in 2024.

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Distributed Energy Resources and Renewable Energy Curtailment

Since 2018, the residential sector had the most rebate-qualifying Distributed Energy Resources (DERs) through the Self-Generation Incentive Program (SGIP), mostly for electrochemical storage technologies (such as lithium-ion battery storage systems).
In 2023, 34.3 MW in rated capacity of qualifying DERs were rebated, down 38.4% from 2022 and is the lowest since 2009.⁶⁷
Single family residential became a leading sector in terms of rebate-qualifying DERs, accounting for 9.4 MW of qualifying DERs in 2023.
In 2023, California added 87.4 MWh of energy storage capacity across all DER sectors, with the residential sector adding 98.5% of the SGIP-eligible energy storage capacity.

Electrochemical storage technologies were the only types receiving rebates in 2023, and 97.1% were paired with solar PV.
In the first nine months of 2024, curtailment totaled 3,102 GWh electricity generated, which has already surpassed 2023’s total curtailment of 2,660 GWh, which represents a 32.4% increase from the first nine months of 2023 (2,343 GWh).
California curtailed 210 GWh from wind and 2,892 GWh from solar during the first nine months of 2024. Wind and solar curtailments rose 51.1% and 31.2%, respectively, relative to the first nine months of 2023.

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Renewables Interconnections and Installations

After a stellar year of growth in 2022, interconnected distributed capacity within the three investor-owned utilities service territories totaled 2,215 MW (in alternating current) in 2023, up 0.8% from 2022.
Residential continues to be the largest sector, accounting for 83.7% of the interconnected distributed generation installed (1,855 MW) in 2023.
In California, small-scale solar PV net generation totaled 28,102 GWh in 2023, up 3,981 GWh or 16.5% from 2022.

Compared to 2022, generation in the commercial sector grew at a similar pace in California (+9.2%) as in the rest of the U.S. (+10.1%). However, generation in the residential and industrial sector grew faster in the rest of the U.S. than in California.
For the first time in 2023, small-scale solar PV net generation is more than half of California’s utility-scale solar PV total generation (47,869 GWh).
California added 95 MW of wind capacity in 2023, and cumulative installed wind capacity totaled 6,213 megawatts (MW) in California, a 1.6% increase from 2021 (6,118 MW).

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Energy Storage and Capacity

In 2023, California added 3,011 MW of nameplate capacity energy storage while the rest of the U.S. added 3,835 MW. California accounted for 44% of energy storage addition nationwide.
Compared to 2022, energy storage capacity addition grew 23% in California and 117% in the rest of the U.S.
Energy storage with a duration between two to four hours accounted for 73.2% of California's energy storage capacity additions in 2023, and the vast majority (98.7%) of the additions were for storage with a duration of four hours or fewer.
The prevalence of lithium-ion battery projects across the state expanded considerably in 2023, with 25 counties in California hosting these installations within their respective territories.
CAISO interconnected queue increased from 2,837 MW in 2022 to 3,482 MW in 2023, the highest since 2013.

By primary generation technology, the interconnection queue totaled 2,170 MW. That includes 1,628 MW from solar and 542 MW from battery storage. This is a decrease of 3.8% from 2022, which had 2,255 MW of capacity in interconnection queue.
Due to the increased popularity of pairing solar PV projects with battery storage, by secondary generation technology, battery storage (1,312 MW) alone accounted for all capacity in interconnection queue, up 125% from 2022.
The interconnection queue in terms of cumulative total capacity rose to 523.3 GW, almost ten times the average of 53 GW from 2007 to 2019
Most of the increase comes from battery projects (standalone, hybrid, or paired with another technology such as solar). In 2023, standalone projects made up 187.3 GW of the total cumulative capacity in queue, more than doubled the 70.1 GW from 2022. On the other hand, hybrid projects made up 336.0 GW in 2023, up 161% from 2022’s 128.8 GW.

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Footnotes

⁶³ SB-1020 Clean Energy, Jobs, and Affordability Act of 2022. Available at: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220SB1020

⁶⁴ AB-1373 Energy. Available at: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=202320240AB1373

⁶⁵ AB-3 Offshore Wind Energy: Reports. Available at: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240AB3

⁶⁶ Renewable Portfolio Standard eligible sources include biomass, geothermal, solar, wind, and small hydroelectric facilities. Small hydroelectric are hydroelectric projects that are less than 30 MW of generation capacity.

⁶⁷ Defined as either pending payment, payment in process, or payment completed.