A Renewable Revolution: How PG&E and Its Customers Helped Write California’s Clean Energy Success Story

By Lynsey Paulo

What some called an elusive goal nearly 20 years ago has transformed today’s energy landscape.

California laid out an ambitious plan for the growth of renewable energy to benefit the environment, advance technology and create green jobs, triggering a “new gold rush” as developers saw vast opportunity.

The state’s three investor-owned utilities, including PG&E and its customers in Northern and Central California, have been key to making the dream a reality.

“Our customers jump-started this industry,” said Fong Wan, PG&E Senior Vice President, Energy Policy and Procurement, who joined PG&E in 1988 and leads gas and electric supply planning and policies.

In 2018, the Legislature made history by passing Senate Bill (SB) 100, the California 100% Clean Energy Act.

Signed into law by Governor Brown, SB 100 increased California’s Renewables Portfolio Standard (RPS) target to 60% of total electric retail sales by 2030, and requires 100% of electric retail sales to come from eligible renewable or carbon-free resources by 2045.

PG&E is on its way.

In 2020, more than 35% of the electricity PG&E delivered to its customers came from eligible renewable resources including solar, wind, bioenergy, geothermal and small hydropower. Adding nuclear and large hydropower, about 85% of PG&E’s electric power mix was carbon-free resources.

“It has been incredibly successful. The three investor-owned utilities (PG&E, Southern California Edison and San Diego Gas and Electric) were the marketplace for renewables and we spurred that innovation, forcing developers and those supplying products and services to them to create and innovate,” said Martin Wyspianski, PG&E Senior Director, Electric and Gas Acquisition, who previously worked on the company’s RPS program.

But the journey to a cleaner, greener energy future had no shortage of obstacles.

“It’s a good story, but it’s one with ebbs and flows,” said PG&E’s John Pappas, a Renewable Energy Principal with 43 years at the company. He was assigned to the RPS program the year it began.

Mission Impossible

Long before SB 100 in 2018, there was Senate Bill 1078. The 2002 law established the RPS program to reduce greenhouse gas (GHG) emissions in the electric power sector, creating cleaner air for all Californians.

“You couldn’t explain it to people,” said Charlie Post, Manager, Energy Storage Implementation at PG&E who worked on the RPS program in the early days. “When people asked what I did for a living, my mother used to tell people I ‘bought wind.’”

The RPS program initially required that 20% of a utility’s total electric retail sales come from renewables by 2017. At the time, PG&E’s power mix was about 11% renewable.

“I thought to myself, we have more than a dozen years, this is easy,” said Wan.

Then, in 2006, the Legislature moved up the deadline to 20% by 2010.

“We thought we had 15 years, now we had less than five years,” recalled Wyspianski.

Wan’s team doubted the company could hit the state goal on that tight timeline.

They also had concerns about keeping the lights on, with more and more intermittent renewable resources being added to the grid. Solar and wind are variable, meaning the sun isn’t always shining and the wind isn’t always blowing to meet current energy demand.

“There was a lot of talk about whether the grid could run reliably with 20 percent renewables on it,” said Wyspianski.

On top of that, renewable energy was very expensive.

“Relative to the market costs, or natural-gas fueled electricity at the time, it was multiples more expensive, and that was a big concern for us because of our focus on providing our customers with affordable energy,” said Gillian Clegg, PG&E Senior Director, Energy Portfolio Procurement and Policy.

The “New Gold Rush”

Rushing to meet the state’s 20% by 2010 requirement, PG&E signed power purchase contracts with renewable developers. Lots of them.

“We needed a lot of energy in a very short time. It became a sellers’ market,” said Wan.

The California Independent System Operator (ISO) manages the state’s power grid and the process for interconnecting generating facilities, including renewables, to the ISO grid.

“From 2006 to 2008, it was absolute insanity,” said Wyspianski. “At one point, there were tens of thousands of megawatts of proposed renewable energy projects applying to be connected to the ISO power grid.”

According to the ISO, one megawatt (MW) produces roughly enough electricity to power 750 homes.

The ISO in 2008 reported more than 68,000 MWs from renewables waiting to be interconnected to the grid, far exceeding the highest demand on record at that time and the ISO’s ability to process the requests.

In 2014, then-Energy Secretary Ernest Moniz greets Fong Wan, a PG&E senior vice president, at an Ivanpah event. (Photo by Lynsey Paulo.)

One of the biggest and boldest projects now towers 450 feet above the California Mojave Desert.

Ivanpah Solar Electric Generating System, owned by BrightSource Energy, NRG Energy and Google, is the world’s largest concentrating solar power facility.

Plant construction kicked off in 2010 and it began delivering energy three years later. It generates power by creating high-temperature steam to drive a conventional turbine. Mirrors track the sun and reflect sunlight to boilers atop towers, heating the water to create steam, which is then converted to electricity.

The three units at Ivanpah generate enough energy to power 140,000 homes. (Photo by BrightSource Energy.)

“It’s like this James Bond thing in the desert,” said Pappas, “mirrors and everything focusing on this tower—power tower they called it. It’s pretty amazing.”

According to the U.S. Department of Energy, Ivanpah created 1,000 construction jobs. It generates 392 MWs for PG&E and SCE customers, and prevents 500,000 metric tons of carbon emissions annually.

While Ivanpah and others came to life, many like wave and tidal power didn’t materialize. Neither did space solar. Solar panels attached to satellites beaming wireless back to Earth turned out to be too “far out."

Developers faced challenges obtaining project financing from capital markets still recovering from the 2008 economic crisis, getting new sites through transmission studies and interconnect reviews, and securing the necessary permits.

“There started being project failures,” said Post. “They were getting into huge permitting problems; costs were high.”

PG&E and its customers stepped up to try to fill the gap.

“With the 2008 crash, we wondered if anyone would be able to get financing for their projects, and whether a financially strong company like PG&E would have to build it itself,” said Aaron Johnson, now Vice President, Wildfire Safety and Public Engagement, who previously worked on PG&E’s RPS program.

PG&E coworkers flip a symbolic switch at a solar facility in Huron. PG&E executives stand with contractors who worked on the project. (Photos by Tracy Correa Lopez, 2013.)

The company proposed and received approval from the California Public Utilities Commission to launch a 500-MW solar photovoltaic (PV) program to help mature the technology, drive down costs, and meet the ambitious RPS goals. The program involved relatively small (up to 20 MW) solar farms, some of which were owned by PG&E and some owned by independent developers.

“We learned that it had to be a partnership with the developers to move projects forward,” said Post.

Solar Rising

By 2010, PG&E’s power mix was about 16% renewables, still short of the 20% state goal.

PG&E complied with the goal using “safe harbor” provisions accompanying the latest changes to the RPS law.

That was SB 2X1, enacted in 2011, which established a new goal requiring the state’s power companies to deliver 33% renewables by 2020, giving PG&E more time to ramp up and meet the higher goal.

“Different technologies were leading, wind became more mature, and then solar became king,” said Pappas.

Topaz Solar in San Luis Obispo County is one of the world's largest solar PV projects. (Photo by First Solar, Inc.)

Solar PV benefitted from being largely scalable, and from development and solar module manufacturing driving down prices.

In 2010, solar power made up less than 1 percent of PG&E’s total renewable electric sales (0.1% of 15.9%).

By 2020, solar power accounted for 45% of the company’s total renewable electric sales (16.1% of 35.6%).

As solar generation in California and other western states grew, the cost of solar energy continued to drop.

“Seeing the remarkable decline in solar power prices, someone had to be out there first,” said Clegg. “That resulted in what is very affordable solar energy. Our customers should get credit for being those leaders. The country benefitted from our early adoption.”

The Next Frontier

The Legislature continued to increase and accelerate the RPS targets.

In 2015 it passed SB 350, upping the requirement to 50% by 2030; in 2018, SB 100 became law, increasing the RPS to 60% by 2030 and requiring all of the state’s electric retail sales to come from carbon-free resources by 2045.

“SB 350 is when the debate changed,” recalled Valerie Turella, Manager, State Government Relations for PG&E. “It changed because the Legislature understood how to contain costs and began rewarding the early investments our company and customers had made. “

“Another achievement was SB 100,” she said. “It was no longer about incentivizing developing an industry. It’s about clean and how can we best and most affordably ensure the electric sector has a clean carbon footprint,” Turella said.

But by 2018, PG&E had a new challenge: too much electricity supply and not enough customer demand.

To meet the state’s requirements early on, PG&E had signed many renewable energy contracts on its customers’ behalf. When many customers began choosing rooftop solar or local energy supply providers, like Community Choice Aggregators, PG&E now had more energy than it needed to meet demand. The company began to sell surplus energy to manage costs for customers.

It also began investing in energy storage, which helps support more renewables on the grid.

“We spent so much time and money building up clean energy projects. But they are limited. To capture the true value of that energy, there has to be a way to store it,” said Post.

Energy storage is a game-changer to reach the state’s clean energy goals. It captures energy produced at one time for use at a later time. It helps to balance the electric grid and reduce costs for customers by using more affordable energy resources when they’re most needed.

Storage is a rapidly maturing technology. Many companies are exploring how to further drive down costs, increase scale and expand how much energy can be stored, reminiscent of how renewable technology developed a decade ago.

Once operational, the Moss Landing substation system will be one of the largest utility-owned, lithium-ion battery energy storage systems in the world.

PG&E and Tesla Inc. kicked off construction on a landmark, 182.5 MW lithium-ion Battery Energy Storage System (BESS) last year at PG&E’s electric substation in Moss Landing in Monterey County. Once operational, it will be one of the largest utility-owned, lithium-ion BESS in the world.

It’s all part of California’s renewable revolution, which may never have happened without lawmakers setting ambitious targets, developers jumping into the new markets, and the utility companies and their customers overcoming significant challenges to meet the goals.

“One of the reasons I’m still here working after all these years is that I really enjoy being part of this clean energy movement, doing my small part,” said Pappas. “I know there is a lot of skepticism of the 2045 goal, but look at how skeptical we were of other goals, and we ended up achieving them.”

Email Currents at Currents@pge.com.