California May Need to Invest Up to $50 Bil to Meet Climate, Electrification Goals: Study

May 16, 2023

by Peter Maloney
APPA News
May 16, 2023

California may need to invest up to $50 billion in grid improvements over the next 12 years to meet its electrification and decarbonization targets, according to a report commissioned by the California Public Utilities Commission.

The study, Electrification Impacts Study Part 1: Bottom-Up Load Forecasting and System-Level Electrification Impacts Cost Estimates, is the first part of a multi-year project with the Public Utilities Commission to help California integrate its increasing array of distributed energy resources, such as rooftop solar, energy storage, electric vehicles, and other energy efficiency technologies.

The authors noted that the results of the study are preliminary and assume that no measures are taken to reduce costs and manage load.

The study did not take into account alternative strategies or future mitigation approaches to minimize costs, such as alternative time-variant or dynamic rates and flexible load management strategies.

The study was conducted by data and analytics company Kevala and covers the Pacific Gas and Electric, Southern California Edison, and San Diego Gas & Electric service territories.

To conduct this study, Kevala analyzed over 100 terabytes of data from over 12 million premises in California, including three years of automated metering infrastructure data, geographic information system data, and customer rate information. Kevala identified the specific locations and timing for necessary electric distribution grid upgrades to support significant increases in electric vehicle charging.

“California is at a turning point in its efforts to decarbonize at scale,” Aram Shumavon, founder and chief executive officer of Kevala, said in a statement. “After decades of minimal load growth on the electric grid, we are shifting into an era of capacity expansion to enable decarbonization. This report shows us that electrification is likely to require significant investments to meet climate goals while delivering carbon-free energy in an affordable, reliable, and equitable manner.”

Kevala said it anticipates that the estimates presented in the study will undergo further refinement in subsequent phases, including the incorporation of building electrification and medium- and heavy-duty electric vehicle adoption scenarios.

The company has also proposed conducting case studies specific to communities to evaluate potential distributed energy resource alternatives that can fulfill location-specific requirements, reduce costs for customers, and establish metrics for quantifying environmental impacts on disadvantaged communities.