Renewable Energy

Photo courtesy of First Solar, Inc.

PG&E is actively expanding renewable energy supplies for our customers—investing in a range of clean energy resources such as solar, wind, geothermal, biomass and small hydro. We use a variety of approaches to do so, including using competitive solicitations to procure renewable energy from third-parties and developing and owning renewables projects ourselves.

By working collaboratively with regulators, environmental organizations and other stakeholders, we can develop a meaningful policy framework, encourage technology development, increase access to financing and take other important steps that will allow us to achieve California’s ambitious renewable energy goals. Our objective is to achieve these goals in a manner that adequately contains costs for our customers.

Progress Toward California’s Renewable Energy Targets

California’s Renewable Portfolio Standard (RPS) requires the state’s investor-owned utilities, publicly-owned utilities, energy service providers and community choice aggregators to deliver 33 percent renewable energy by the end of 2020. This important target is measured by the percentage of total retail sales that come from eligible renewable resources.

The 33 percent RPS was signed into law by California’s governor in 2011, replacing a 20 percent RPS program. To meet this expanded target, PG&E and other retail sellers may use a flexible "stair step" approach of increasing targets that ultimately climb to a 33 percent annual requirement. Renewable deliveries must equal 20 percent on average during 2011 to 2013, about 23 percent on average during 2014 to 2016 and about 30 percent on average during 2017 to 2020. PG&E must then deliver 33 percent of its electricity from RPS-eligible resources each year after 2020.

PG&E is fully committed—and is well on the way—to meeting this mandate. By the end of 2011, 19 percent of the electricity we delivered to our customers came from RPS-eligible resources. The majority of this total came from contracts with third-party renewable energy companies.

PG&E supports the use of renewable energy while recognizing that increased deployment of renewables presents risks, including cost impacts and operational challenges related to the integration of renewables into the grid. Accordingly, we strongly advocate for RPS policies that help mitigate these risks to provide flexibility and help minimize costs to our customers.

Contracting for Renewable Energy

PG&E sources most of its renewable energy through contracts with third parties. In 2011, the Utility added seven new long-term contracts to its portfolio of renewable energy supplies through targeted solicitations and bilateral negotiations.

These contracts represent more than 700 MW of wind and solar resources. Overall, PG&E has contracted for more than 10,000 MW of RPS-eligible energy since the start of California’s RPS program in 2002, including more than 9,900 MW contracted through the end of 2011. Approximately 2,800 MW of these are currently delivering to PG&E and an additional 4,700 MW are under development.

To pursue contracts with third-parties, PG&E held three separate solicitations for renewable power resources in 2011:

  • We issued our annual Request for Offers (RFO) for renewable power and received a strong response. We are currently executing contracts resulting from this solicitation that offer the best value, viability and fit and will file them with the CPUC for approval.
  • We issued our first Renewable Auction Mechanism RFO for renewable power from projects up to 20 MW in size. As a result, PG&E executed four contracts in early 2012 that will provide more than 60 MW of renewable power from geothermal, wind and solar resources.
  • We held our first RFO for solar photovoltaic (PV) generation as part of our five-year program to contract for up to 250 MW of new solar PV. The solicitation, which sought moderately sized solar PV projects, resulted in three contracts totaling 50 MW.

The seven contracts signed in 2011 include:

Renewable Portfolio Standard—Contracts Signed in 20111
Project (Name) Counterparty Location (City) Location (State) Technology MW GWh/Year
PV12 Westlands Solar Farms Huron California Solar Photovoltaic 18 36
Orion Solar2 Fotowatio Renewable Ventures Unincorporated Kern County California Solar Photovoltaic 12 28
Mojave Solar Project3 Abengoa Solar Harper Lake California Solar Thermal 250 617
Copper Mountain II Copper Mountain Solar 2, LLC Boulder City Nevada Solar Photovoltaic 150 303
Shiloh IV Wind Project enXco, Inc. Rio Vista California Wind 100 269
Kansas South2 Recurrent Energy Lemoore California Solar Photovoltaic 20 48
North Sky River NextEra Energy Resources, LLC Tehachapi California Wind 163 497
Total 713 1,798

1 This chart does not include small renewable generator contracts of up to 1.5 MW.

2 Indicates contract is part of the 250 MW Solar Photovoltaic (PV) Independent Power Purchase (IPP) Program.

3 Replaces 2009 contract.

Renewable Portfolio Standard—Contracts Signed 2002-20111

TIP: Click on the labels in the chart legend above to selectively hide/unhide chart data.

1 Includes terminated, expired and CPUC-rejected contracts and does not include small renewable generator contracts of up to 1.5MW.

PG&E also saw a dramatic increase during 2011 in the rate of subscription for its Feed-In Tariff (FIT) program, which offers a standard contract and payment for renewable projects up to 1.5 MW. Last year, we executed 82 FIT contracts representing approximately 94 MW of RPS-eligible energy. In 2012, PG&E will expand its FIT program to accommodate renewable generation up to 3 MW.

Ownership of Renewables

PG&E is committed to bringing more renewables online for our customers as quickly and affordably as possible. As part of this commitment, we are working to develop and own new solar PV generation. The projects will range from 1 to 20 MW and be located near PG&E substations to reduce the costs of interconnection to the electric grid.

Photo of 20 MW Stroud Solar Station in Fresno County.

In 2011, we brought three solar projects online in Fresno County—the 15 MW Westside Solar Station, 20 MW Stroud Solar Station and 15 MW Five Points Solar Station—that collectively produce enough electricity to power about 15,000 homes. These projects add to PG&E’s 2 MW Vaca-Dixon Solar Station, a pilot plant we brought online in 2010.

PG&E also constructed an additional three solar projects for the program’s second phase. These projects, which came online in July 2012, are also located in Fresno County and are providing 50 MW of additional solar power. We have also begun site preparation for the third phase of the program, which will include two solar projects in Fresno County and one in Kings County.

As we work to develop new utility-owned solar power, we are leveraging the expertise of diverse suppliers. We also work proactively with natural resource agencies to avoid impacts to sensitive species. This included siting the first three projects on previously disturbed land, conducting biological studies of the property and constructing fences around the perimeter that provide a small gap at the bottom for the endangered San Joaquin kit fox and other sensitive species to pass through.

Our development of these PV projects provides valuable lessons for PG&E. While we do not plan to explore additional renewable energy development and ownership opportunities at this time, we continue to work with other developers to meet California’s renewable energy needs.

Working Collaboratively to Address Challenges

PG&E continues to participate in multiple forums to recommend sound policy solutions to the challenges California faces with respect to renewable resource development and interconnection.

For example, we actively participate in the Stakeholder Committee of the Desert Renewable Energy Conservation Plan (DRECP). When complete, DCREP will provide a comprehensive approach to siting renewable projects away from sensitive desert habitats and in areas most suitable for development. We also continue to participate in the California Transmission Planning Group, a group formed to create a state-wide electric transmission plan for the California Independent System Operator to address both renewable and conventional generation.

PG&E also continues to work constructively with the CPUC as the agency implements the expanded 33 percent RPS legislation. PG&E is challenged to ensure that the renewable energy it procures for customers is cost-effective and affordable. Therefore, a key priority for PG&E is to work with stakeholders and advocate compliance rules that help contain costs for our customers.

Piloting Energy Storage

As we move to a smarter grid that integrates more renewable energy sources, PG&E understands the importance of being able to store energy—whether in the form of batteries or other devices.

Among several energy storage technologies under study, PG&E is piloting a high-efficiency 2 MW NaS battery at the utility’s Vaca-Dixon substation in Solano County. It is located about one-half mile from the utility’s Vaca-Dixon Solar Station, which uses photovoltaic cells to generate about 2 MW of peak power.

PG&E is also demonstrating the viability of advanced, underground Compressed Air Energy Storage (CAES) technology. As envisioned, the project would store large amounts of intermittent renewable energy resources produced at night, especially wind, in the form of high-pressure air. By establishing the feasibility, costs and benefits of a CAES system, PG&E is helping to advance a project that has the potential to benefit California and beyond.

PG&E is in the first phase of the project, which involves exploring the technical and economic feasibility of a 300 MW facility with up to 10 hours of storage capability using a porous rock structure for energy storage at a location within PG&E’s service area.

Wave Energy

Wave energy may be an important contributor to California’s low-carbon economy in the future. Starting in 2007, PG&E began exploring the potential use of wave energy off of the California coast. Working with a wide range of community stakeholders such as fishermen, ocean protection advocates, wave energy companies, local government and port officials, surfers and bird watchers, we examined the feasibility and promise of wave energy.

After encountering significant challenges and concluding that it would be infeasible to pursue a FERC license for wave facilities, we suspended our wave energy efforts.

In December 2011, we filed our final report with the U.S. Department of Energy. The valuable lessons we learned through this project will help inform regulators, power providers and local communities seeking to understand and address the complex challenges facing this promising technology, including an evolving regulatory and permitting process and technological maturity issues. PG&E will continue to seek out cost-effective renewable resources for our customers across California, including wave energy development as the industry matures.