California has set goals of 90% retail electricity sales to be carbon-free by 2035 and 100% by 2045. Solar and wind will provide the majority of this generation, but non-intermittent resources capable of meeting electricity demand on a 24/7 basis have also been identified as key to ensure grid reliability and lower ratepayer costs. These are known as "clean firm" resources.

In this blog post we analyze the role for clean firm power in decarbonizing California’s power sector. We summarize the benefits of clean firm resources and take stock of the state’s existing supply. We estimate the additional amount of clean firm capacity likely needed and review the available options for achieving the 90% and 100% carbon-free goals, including geothermal, zero-carbon fuels including hydrogen and biomethane, natural gas with carbon capture and storage, biomass-electricity, hydropower and nuclear. Each of these options have their own trade-offs and potential for implementation. Policymakers will need to evaluate these as part of charting a course to a sufficient supply of clean firm power in California.

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In 2018 California passed SB 100 (De León) establishing a goal of 100% retail electricity sales to be served by renewables and zero-carbon resources by 2045. In 2022 lawmakers raised the ambition by adding the interim goal of 90% carbon-free electricity by 2035 (SB 1020, Laird).

Solar and wind will clearly provide the majority of supply needed to achieve these goals. However recent research shows that a grid comprised entirely of intermittent resources, while technically possible, is undesirable for many reasons. Some portion of clean generation that can reliably meet 24/7 demand regardless of the time of day, season, or weather is needed.

Clean firm power and its benefits

Generation technologies that meet this definition are referred to as clean firm technologies. In general, they include: geothermal, renewable fuels such as hydrogen and biomethane, natural gas with carbon capture and storage, biomass-electricity, hydropower and nuclear energy.

Studies show that there are multiple benefits to incorporating clean firm power into the generation mix. Table 1, adapted from a 2021 study by Stanford, Princeton, Clean Air Task Force and Environmental Defense Fund that modeled how California could achieve its SB 100 goal, identifies the main benefits as relating to land-use, transmission and cost. There are also reliability benefits to maintaining clean firm resources. Overall, the study found the highest benefits when clean firm resources comprised roughly 20-30% of the total generation mix.

Current state of clean firm in California

State agencies including the California Energy Commission, California Public Utilities Commission and California Air Resources Board are beginning to incorporate clean firm resources into their long-term decarbonization plans. The 2021 SB 100 Joint Agency Report identified the potential for clean firm technologies to provide uninterrupted power as well as reduce total resource needs and overall system cost. As part of the planned 2025 update staff have suggested modeling a Resource Diversification Scenario with explicit inclusion of clean firm options. Elsewhere the California Public Utilities Commission recently mandated the procurement of 1,000 MW of clean firm capacity to meet mid-term reliability needs.

California’s existing fleet of firm power is made up of hydroelectric, nuclear, geothermal, biomass-electricity and natural gas facilities. The state’s clean firm portion (i.e. excluding unabated gas) contributes about 20,000 MW, or 24%, of capacity to the state’s grid (Table 2). This amount is within the target 20-30% range, but without additional capacity it can be expected to decline well below the 20% threshold as the state deploys increasing amounts of solar and batteries.

How much more clean firm power does California need, then, to achieve its SB 100 and SB 1020 goals? This is a complex question which depends on the future penetration of not only utility-scale solar and batteries but also offshore wind from the North and Central Coasts, onshore wind from New Mexico and Idaho, long-duration storage, demand-side management and demand response, potential losses in existing clean firm capacity (e.g. sustained droughts that deplete hydropower; planned retirement of Diablo Canyon), amongst many others.

As a rough guide, based upon the previously mentioned study (and it’s peer-reviewed version) we estimate that at least 30 GW of new clean firm capacity, and potentially up to 40 GW, will be needed by 2045. By comparison, the state is targeting about 140 GW of new solar by 2045.[1]

Pros and cons of clean firm options

Not all clean firm resources are created equal – and stakeholders have identified legitimate concerns regarding many of the potential options.

In this section we provide a short analysis of the pros, cons and trade-offs of alternative options for delivering at least 30 GW of new clean firm power in California. Our goal is to provide a summary of the issues to help inform state decision-making.

Geothermal

Geothermal is viewed as a promising clean firm option. California’s installed geothermal capacity is much lower than its potential, with an estimated 2.6 GW of untapped resources in the Salton Sea region alone. There have also been recent breakthroughs related to next-generation geothermal, which holds promise for driving down future costs. Pairing lithium extraction with geothermal is another potential opportunity in California. A key barrier is that geothermal projects face high upfront costs and long lead times to development. A lack of transmission to the Imperial region is also harming geothermal development. Procurement mandates are a key policy lever to assure project financing for geothermal projects.

Zero-carbon fuels

Clean hydrogen produced via electrolysis or gasification can be blended with natural gas to reduce emissions at these facilities or combusted directly to produce electricity. California anticipates needing to scale clean hydrogen production to 1,700 times current (fossil) hydrogen production levels to meet its climate goals. Some portion of this amount could be dedicated to direct electricity generation, but clean hydrogen may be better suited to long-duration storage, transportation fuels and fertilizer production owing to the state’s regional characteristics.

Biomethane is produced primarily from manure via anaerobic digestion. It can also be produced from dry wood waste via gasification. Biomethane could drop-in to existing natural gas facilities for direct power generation. A key issue is that there is limited supply and modeling suggests it may be better utilized in high-heat industrial applications. Current incentives under the Low Carbon Fuel Standard also guide biomethane production to the transportation sector.

Natural gas with carbon capture and storage

California anticipates needing 100 million tons of point-source and direct air carbon capture and storage (CCS) to achieve net-zero emissions by 2045. This is a significant amount equal to about 25% of the state’s current emissions. Retrofitting some existing gas plants with carbon capture could be part of this equation and reduce stranded asset risk. Key challenges include the opposition to CCS on fossil fuel plants, lack of carbon infrastructure (pipelines, storage) as well as the high cost of carbon capture retrofits on large-scale facilities. The UK’s Dispatchable Power Agreement model is one option that could be considered to support gas with carbon capture projects. Calpine Corporation is one entity currently in the process of developing a natural gas with CCS project in partnership with SMUD in Sutter County.

Biomass-electricity

The direct combustion of forest and agricultural biomass for electricity provides about 1% of the state’s total electricity supply. Biomass-electricity has seen a significant downturn from almost 70 operating facilities in the early 1990s to only 25 operating facilities today. Two key challenges include the high cost of biomass-electricity and air pollution from larger facilities in the Central Valley. Greater biomass utilization is an important factor in enabling the state’s ambitious forest treatment goals, but the non-combustion processing of wastes to produce zero-carbon fuels such as hydrogen and sustainable aviation fuel is increasingly favored given the significantly cleaner emissions profile of gasification and pyrolysis technologies and lack of alternative feedstock options to produce zero-carbon fuels that replace petroleum in hard-to-electrify applications. Biomass-hydrogen is also an optimal technology to pair with CCS and deliver carbon dioxide removal necessary to achieve statewide net-zero emissions by 2045.

Hydropower

Hydropower provides the largest amount of clean firm capacity to the state at 17% of the total grid. However, as mentioned this capacity may not be maximized in a given year due to climate impacts. For example, in 2021 hydroelectric generation was 37% less than the year prior due to drought. This risk is expected to become more severe over time. Dams have also historically been at odds with habitat restoration and cultural practices; four dams on the Klamath River are at various stages of decommissioning and removal. For these reasons, although possible it seems unlikely that California will increase its hydropower capacity in the coming years.

Nuclear

California has one remaining nuclear facility (Diablo Canyon) which provides about 3% of capacity to the state’s electricity grid. Diablo Canyon was slated to be decommissioned in 2025, however the facility was authorized an extension through 2030 to meet reliability needs. Although there is a growing interest in increasing nuclear power, particularly at the federal level and in favor of small modular reactors (“SMRs”), at this stage it seems unlikely in California as the state prohibits new in-state nuclear power plants under the Warren-Alquist Act.

Conclusion

Although a California grid powered by 100% solar, wind and batteries is technically possible, it would be extremely costly and require the conversion of thousands of additional square miles of natural and working lands throughout the state. By adding clean firm power to the portfolio, these impacts are reduced substantially with added benefits in terms of reliability and overall deployment feasibility.

A number of variables could change the future need for clean firm supply, but as a guide we estimate that the state will need at least an additional 30 GW of capacity.

There are multiple available clean firm options of varying levels of readiness, cost and viability. There is no silver bullet and a portfolio of supportive policies and investments should be considered. We emphasize that while meeting clean firm power needs is important, the challenge on the distributed side is still significant. The rapid and low-cost deployment of transmission continues to be a priority for unlocking a clean and resilient net-zero electricity grid.

For more information, please contact Neil Matouka (neil@csgcalifornia.com), Amanda DeMarco (amanda@csgcalifornia.com) or Sam Uden (sam@csgcalifornia.com).

[1] This excludes new off-grid utility-scale solar needed for green hydrogen and direct air capture, which would bring the total to over 200 GW.