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California’s energy officials want $5 billion for strategic reserves

California energy officials want $8 billion from Governor Gavin Newsom, including $5 billion to build a backup system to ensure California’s electricity grid is reliable enough to secure consumer buy-in to the coming transition toward renewable energy.

(CN) — The California Energy Commission will request about $5.2 billion million to invest in backup energy for an electricity grid that is growing increasingly reliant on clean energy alternatives like solar and wind power. 

The request is part of a $300 billion California budget as Governor Gavin Newsom, who is dealing with a nearly $100 billion surplus, will negotiate with the California Legislature about how best to divvy up the unprecedented government spending plan. 

The Energy Commission is requesting $8 billion overall, but officials stressed the need to begin planning for a greater need for backup energy sources to ensure reliability for an electrical grid that is increasingly dependent on clean energy sources. 

“This proposal is foundational to preserving reliability as we move forward and move quickly toward a clean energy transition,” said Karen Douglas, Newsom’s senior advisor on energy, during a press conference on Thursday afternoon. 

While clean energy sources like solar and wind are cleaner than their fossil fuel counterparts, they are less reliable as they can be subject to fluctuations in weather conditions or the time of day.  

Officials said keeping the lights on is important to engender consumer confidence as the massive electrification of the home energy sector and the transportation sector figures to keep accelerating to meet the state’s ambitious climate goals. 

But part of those policies will include using natural gas plants to provide backup during periods of high stress or spiked demand on the grid. 

“This does not represent a backsliding on our clean energy goals,” said Alice Reynolds, president of the California Public Utilities Commission. “During rare instances when we see demand increases, we are going to bring on additional resources.”

Those resources could include Diablo Canyon, which was slated to be decommissioned by the state of California after the disaster at the Fukushima Nuclear Power Plant, but energy officials have since admitted nuclear, which is a much cleaner energy source than fossil fuels, could be part of the future energy portfolio. 

“We need to have all options in front of us,” Douglas said. 

The plan calls to build an increase of 5,000 megawatts for the energy system, noting that electrification of transportation will also put additional demand on the energy system. 

California currently maintains one of the cleaner electricity systems in the United States, particularly as it has relied on hydroelectric power to generate a portion of its megawatts for a number of years, and has continued to invest in industrial-scale solar and large wind farms.  

The electricity grid is about 60% clean energy, but Douglas said the state believes it is feasible to reach 80% zero carbon by 2030. 

Also, officials insist that just because natural gas plants will be used to ensure reliability, it does not mean increasing emissions. Instead, the plan is to use plants currently operating at full capacity to provide emergency backup after they are retired. 

Siva Gunda, vice president of the California Energy Commission, said the estimate is that backup plants will probably operate for about 50 hours per year. 

The proposed budget also asks for $1.2 billion in ratepayer relief for California beset by high energy costs in a year where inflation has hit the energy sector particularly hard. 

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