California’s energy system in transition
Transitioning California’s energy system is complex, and PG&E is actively participating in a number of CPUC proceedings on the future of the gas and electric systems:
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Achieving a net zero energy system in 2040 will have significant implications for PG&E’s energy delivery system over the coming decades. As the operator of a dual-commodity energy system, PG&E is uniquely positioned to lead this transition and shape the future—with a continued focus on helping our customers and hometowns prosper.
Energy system innovation: Advancing climate-tech solutions
Following the publication of our R&D Strategy Report in June 2023, PG&E has:
- Hosted our first Innovation Summit with more than 3,000 people from across sectors.
- Solicited and received hundreds of applications from innovators with proposed solutions.
- Held an Innovation Pitch Fest, where innovators pitched their solutions for selected proposals.
- Identified more than 20 solutions to further investigate or demonstrate in 2024, including through PG&E’s Electric Program Investment Charge (EPIC) 4 portfolio of emerging technology projects.
PG&E also continues to investigate innovative solutions in addition to those identified from Pitch Fest. PG&E’s strategy and needs, as well as available technology and solutions, continue to evolve over time, and there will be additional avenues for collaborating with PG&E through our continuing Accelerating Innovation effort.
- Integrated Resource Planning proceeding to plan the state’s electricity supply resources across all load-serving entities and meet electricity sector greenhouse gas emission targets.
- High Distributed Energy Resources (DER) Future OIR to modernize the state’s electric grid to integrate a high number of DERs, including EV charging.
- Transportation Electrification Framework to execute a policy-driven funding structure for utility transportation electrification efforts through 2030.
- Building Decarbonization OIR to develop a plan to assess the feasibility of significantly reducing greenhouse gas emissions from buildings.
- Gas System Planning OIR to address system reliability standards, market structure and regulations, gas infrastructure, gas revenues and rate design, and workforce issues.
Note: OIR refers to Order Instituting Rulemaking.
Electric system planning and innovation
Sustainability Highlight
“Virtual power plants” are valuable resources for supporting grid reliability and an essential part of California’s clean energy future. Batteries in a customer’s home or business can store energy during the day, and then share that energy back to the grid during peak times, such as at night when the sun has set, or when energy supply is tight during hot summer months.
Demonstrating the concept, PG&E and Sunrun completed the Peak Power Rewards program, an innovative residential distributed power plant:
- Peaking at nearly 32 MW from 8,500 solar-plus-storage residential systems, Sunrun and PG&E customers provided consistent, reliable clean energy to California’s power grid through the summer and fall of 2023.
- The program frequently supplied the grid with up to 30 MW—sufficient power for more than 20,000 homes.
- Enrolled battery systems discharged energy back to the grid every day from 7 p.m. to 9 p.m. during the months of August through October, a critical window when energy needs are highest in California. In exchange, customers received an upfront payment of $750 and a free smart thermostat for participating.
PG&E has connected more than 800,000 customers with rooftop solar to the electric grid and more than 70,000 customers have installed and connected storage systems to the grid. These customers could, on average, rely on over 10 hours of backup power using their storage system, a critical resource for grid resiliency, particularly during storms, heatwaves, and emergency energy alerts.
With the electric system, we embrace the role we play in enabling and scaling a decarbonized grid. Customers with EVs and electric heating and cooling systems use about double the annual electricity of households without, driving unprecedented growth in electrification.
To enable this dramatic growth, our vision is to make the electric grid smarter, more dynamic, and more flexible—incorporating new energy technologies and giving our customers increased flexibility, choice, and value. We recognize the need to reimagine the grid to meet varying and evolving needs.
Today, our electric system faces accelerating, multi-dimensional needs that we must address to deliver for our hometowns:
- Permanently reducing wildfire risk
- Adding system capacity to accommodate growing demand from EVs and electrification, as well as California’s clean energy goals
- Improving the health of our electric assets
- Enhancing reliability for our customers
We’re adopting an integrated grid planning approach to meet these objectives and to support the state’s bold climate goals, as well as our own. Integrated grid planning is a data-driven approach to planning that seeks to bundle work that addresses multiple needs for the grid, creating efficiencies that reduce the cost of delivering safe, clean, and affordable energy to our customers.
We are also helping to drive the innovation needed to meet California’s policy and clean energy goals, including a series of innovative bidirectional EV charging technology partnerships.
Gas system planning and innovation
Sustainability Highlight
Whether customers are upgrading one appliance or designing an all-electric home, PG&E is offering an ever-expanding suite of electrification programs. For example, PG&E is testing new approaches to support building electrification and integrated load management strategies for customers, and launched competitive solicitations for three new programs in 2023:
- Residential Electrification Equity program: Focuses on serving hard-to-reach and underserved customers located in disadvantaged communities by addressing the up-front costs and potential energy bill increases associated with building electrification.
- Zonal Electrification Equity program: Targets electrification efforts in the residential and commercial sectors on identified gas distribution and transmission system “zones,” with the intent of decommissioning that section of the gas system or avoiding new future gas capacity projects.
- Residential Whole-Home Load Management program: Investigates how various strategies within a comprehensive load management program—energy efficiency measures, time-of-use rates, and other distributed energy resources—can provide consistent load reductions, while providing a positive customer experience.
Since 2018, we have successfully completed over 100 building electrification pilot projects at no cost to customers via equity-driven programs.
Additionally, PG&E is supporting customers through a Guide to Home Electrification (PDF) and various programs, including an Induction Cooktop Loaner Program, where customers can borrow an induction cooktop unit for two weeks at no cost. We also continue to offer education and training on electrification for industry professionals.
Looking forward, PG&E is developing new tools, including a clean energy calculator for individual building analysis and a geospatial electrification tool to identify larger zones with multiple buildings to target for electrification.
PG&E’s gas strategy focuses on a diversity of win-win options that will be needed to meet our climate goals—and those of California. Our vision is to evolve the gas system to be an affordable, safe, and reliable net-zero energy delivery platform.
We are planning and investing for the gas system to evolve—to deliver cleaner fuels and meet gradually declining customer demand. At the same time, we expect our gas system infrastructure to continue to play a vital role over the coming decades for our customers and the state as a storage, reliability, and resiliency resource.
To achieve this vision, PG&E is adopting a strategic, proactive approach to the evolution of the natural gas system―seeking ways to avoid future gas system costs; reduce the costs of needed system upgrades, installations, and removals by efficiently coordinating and planning work; and helping to stabilize gas rates.
We’re working to enable building electrification for our customers, while also aggressively pursuing cost-effective electrification efforts to avoid continued gas system investments and maintenance. We’re also working to transition the gas system to transport and deliver cleaner fuels such as RNG and hydrogen.