California's Offshore Wind Drives $6.1B in Grid Projects

The Facts -

• California’s power grid operator will release a procurement schedule in May for two grid expansion projects totaling $4.1 billion to connect floating offshore wind energy.
• The plan developed by CAISO, is a major component of $6.1 billion of infrastructure investment in 26 transmission projects providing an added 85 GW of generating capacity by 2035.
• The solicitation will include two major transmission projects costing $2.7 billion and $1.4 billion to connect power expected to be generated from approved projects in northern California.

California to Invest in Grid Expansion for Offshore Wind Energy Generation

California’s power grid operator, CAISO, has announced a procurement schedule for two grid expansion projects worth $4.1 billion. These projects are critical in connecting the federally approved offshore wind energy development in a 206-square-mile deepwater area off the coast. The schedule will be released in May.

Developed in partnership with two state energy agencies, the plan forms a significant part of a $6.1 billion investment in infrastructure. Comprising 26 transmission projects, it is set to offer an extra 85 GW of generation capacity. This boost will enable California to meet its load growth and greenhouse gas reduction targets by 2035.

The projected generation capacity is a significant increase from last year's transmission plan. The solicitation includes two main transmission projects. A 500 kV substation with a 500 kV line costing $2.7 billion, and another 500-kV line costing $1.4 billion. These will serve the power generated from approved projects in Humboldt Bay, northern California.

New transmission will also link approved projects in Morro Bay, central California. This development represents a significant progression for the offshore wind industry, signaling the recognition of offshore wind as a crucial technology to achieve state environmental goals.

Shifting Power Supply Mix

The Humboldt area boasts a high wind capacity but has little development and lacks transmission to transport new power to major load centers such as San Francisco and Los Angeles. This plan addresses that issue, paving the way for more offshore wind development in northern California.

Presently, two companies have secured federal leases in the Humboldt area, and another three hold federal leases off Morro Bay, totaling 3.1 GW. Much of the required transmission for Morro Bay capacity will come from retiring natural gas-fired power plants. However, an additional 5.3 GW will be needed by 2035, contingent on the retirement plans of the Diablo Canyon nuclear plant.

As California transitions to a carbon-free electric grid to comply with clean energy mandates, the demand for additional power generation over the next decade has surged. The recent plan builds upon last year's strategic approach but is more proactive, aiming to add approximately 7,000 MW of capacity annually over a 10-year projection.

The recommended transmission projects are phased in over lead times of up to eight to 10 years. The new projects will cater to the generating capacity for more than 38 GW of solar energy, 3 GW of onshore wind, 21 GW of geothermal development, 5.8 GW of out-of-state onshore wind, and added battery storage across California, southern Nevada, and western Arizona.

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