California Approves USD7.3bn Plan for Power Transmission Projects

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California Approves USD7.3bn Plan for Power Transmission Projects

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California’s electric grid operator has given the green light to a USD7.3bn plan for 45 power transmission projects to be implemented over the next ten years, facilitating the connection of new power plants in high-priority regions to the grid, as reported by Reuters on May 19. The California Independent System Operator (CAISO) announced that these projects will support the development of over 40 gigawatts (GW) of new generation resources, with a growing demand for power anticipated due to increased electrification in sectors such as transportation and construction. While most of the transmission projects will be constructed in California, some will extend to neighboring Arizona. CAISO’s recommended power lines from its 2022-2023 Transmission Plan will enable the incorporation of 17 GW of solar resources, 8 GW of wind generation, 1 GW of geothermal development, and battery storage projects into the state’s grid.

The plan identifies specific geographic zones where connecting power plants and establishing new power lines will be economically and operationally feasible. Furthermore, the grid operator approved reforms to account for the increasing uncertainty in net load forecasts between day-ahead and real-time markets, reflecting the evolving resource mix toward cleaner yet more variable energy sources. CAISO projects that future transmission plans may require the addition of 70 GW by 2033 and up to 120 GW as the state aims to achieve a carbon-free power system by 2045. In a recent summer outlook, the North American Electric Reliability Corp (NERC) highlighted the vulnerability of power supply in the U.S. West to extreme heat, as it heavily relies on regional energy transfers to meet peak demand or compensate for reduced solar output.