A season of natural catastrophes, from Hurricanes Harvey, Irma and Maria to scorching wildfires across the West, signal a major warning to California that large scale disasters are growing in number and magnitude. Our neighbor to the north, Montana, faces potential budget cuts because of a devastating and expensive wildfire season. In California, about half of the 20 largest wildfires ever recorded burned in the last decade. Some of those fires were fueled by more than a million drought-stressed trees that have died since 2010.
At the California Energy Commission, we are working to combat the consequences of drought by implementing energy efficiency standards for water appliances. Yet, the Energy Commission recognizes how a warming planet with more extreme weather threatens the resiliency of the state's electricity system. California has been fortunate this year that despite more than 7,200 fires, transmission systems have not been significantly impacted. With drying grasses and trees that function as kindling, the fire threat always loom.
To help tackle such challenges, California has supported policies to reduce greenhouse gas emissions. The Legislature and Governor Edmund G. Brown Jr. have set a goal to cut greenhouse gas emissions to 40 percent of 1990 levels by 2030. The Governor, through executive order, has further increased the goal to 80 percent below 1990 levels by 2050. These are bold steps that must be taken. California must grapple with a fundamentally changing electricity sector and how those changes impact the resiliency of the electricity delivery system.
The traditional management model of directing through the investor-owned utilities is changing with the growth in energy alternatives, such as community choice aggregators and rooftop solar. As detailed in a joint hearing with the California Public Utilities Commission and Energy Commission, by 2025, as much as 80 percent of the future retail load will be through community choice aggregators. This change will create uncertainty for renewable energy developers and all players in the energy market. Who will invest in infrastructure, energy efficiency, research and development, and the energy needs of our diverse population?
California's electricity sector must become more flexible. To strengthen reliability, nimbleness is needed on the demand and supply sides. Increases in solar energy have created times during the day when renewable energy creates negative electricity prices. During these times of negative or close to negative prices, renewable electricity must be turned off. The ramp down and up of traditional energy sources, such as natural gas-fired power plants, requires faster and regional responses. We also need to increase flexibility on the demand side that offer options that take advantage of cheap, clean energy.
Part of the response is distributed energy resource planning. These are smaller power sources to meet local demand, such as the microgrid installed at Kaiser Permanente in Richmond. A microgrid can provide clean energy to reduce peak demand, reducing the draw a facility pulls from the larger electricity grid. Other microgrid demonstration projects that the Energy Commission has invested in include the ones installed at the University of California, San Diego and the Blue Lake Rancheria in Humboldt County.
Even more important is establishing a regional grid. By planning ahead, a larger grid with more participants enables greater use of preferred energy sources and saves consumers money. A regional grid would permit us to trade resources a day ahead and gain from the synergy of looking beyond the immediate moment. The Energy Imbalance Market hints at what is possible. It enables balancing trades when there is more or less supply or demand than expected. These imbalances are traded when they occur. The Energy Imbalance Market has provided participants more than $213 million in savings as well as an avoidance of 175,000 metric tons of carbon dioxide equivalent since November 2014. That's equivalent to taking more than 35,000 vehicles off the road. Within the California Independent System Operator's portion of the Energy Imbalance Market, greenhouse gas emissions are down nearly 30 percent when comparing the first six months of 2017 to 2014. Total emissions from the electricity sector are 24 percent below where they were in 1990.
It is this experience that makes California a global leader. From establishing the Under2 MOU to agreements with China and Mexico to promote clean energy and provide opportunities for California businesses, the world is looking to the Golden State.
A first-of-its-kind event will take place later this month in Sacramento with the California-Germany Bilateral Energy Conference. The Oct. 19-20 event will bring industry experts, think tanks, and policy makers from Germany and California to discuss recent developments, deepen the understanding of long-term trends, and exchange experiences with policies designed to address energy issues. The conference will foster dialogue and help motivate and inspire those involved in the global energy transition. Join us.
Robert B. Weisenmiller
Chair, California Energy Commission