Overview of California’s Energy Transition

An overview authored by the Steering Committee describing a framework for California’s energy transition and key highlights.

The system of energy sources and applications we enjoy today has evolved over hundreds of years and has gone through multiple transformations over that period. Our complex energy system has many interacting technical and governance components. The current energy system emits greenhouse gases and causes other environmental impacts including air, water, and soil pollution. Low-income and communities of color disproportionately experience the negative impacts of our current energy system.

Motivated by the dire and mounting risks of climate change and opportunities for a more prosperous, just, and healthy California, we are in the midst of a rapid transition of our energy system and other aspects of our economy that contribute to greenhouse gas emissions. Strong, rapid action guided by careful, evidence-based, and inclusive planning can help minimize the impact of climate change while securing a safe, prosperous, and equitable future for all Californians.

At a high level, decarbonizing energy has three fundamental elements:

1. Maximize efficiency and electrify energy use across sectors to the greatest extent possible.
2. Provide affordable, accessible, and reliable carbon-free electricity for a highly electrified economy.
3. Decarbonize activities that cannot be electrified by using clean fuels, efficiency, conservation, and better land use planning and infrastructure.

We are now entering an era of fundamental, large-scale structural changes to the energy system, during which the choices we make must ensure that the future energy system has adequate capacity and is both reliable and cost effective.

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1. Electrification and Grid Development

Grappling with an aging power grid and a rapidly expanding demand for electricity.

Overview

California’s decarbonization strategy calls for vehicle and building electrification, but as more vehicles and homes are powered by electricity, there will be increasing demand placed on California’s grid. The California Air Resources Board (CARB) estimates that electricity demand could increase in the state by 76% by 2045 (relative to demand in 2022).

The challenge of meeting these new demands comes alongside California’s concurrent transition to 100% renewable and zero-carbon resources as mandated by SB 100 (de León, 2018) and the integration of distributed energy resources like rooftop solar. These new and increasing demands require upgrades and expansion of a grid that is already challenged by wildfires, extreme heat, and weather events.

Transmission infrastructure carries high-voltage electricity over long distances to distribution substations. These substations reduce the voltage and then transfer the power to distribution networks that deliver the lower voltage electricity over short distances to consumers. Both transmission and distribution infrastructure will need to be upgraded to accommodate additional demand and new energy resources. The California Independent System Operator (CAISO)—which oversees the operation of approximately 80% of California’s bulk electric power system, transmission lines, and electricity market—estimates that adding and upgrading transmission lines to meet predicted demand will cost $30.5 billion over the next 20 years.

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Section topics

• Increasing demand for electricity
• Changing energy supplies
• Reliability challenges
• Scale, impacts, and challenges of necessary grid infrastructure development
• Environmental Justice and Equity Considerations
• Relevant Policies
• Relevant State Institutions

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Sources

• ^{California Air Resources Board. (2022). 2022 Scoping Plan for Achieving Carbon Neutrality. Available at: https://ww2.arb.ca.gov/sites/default/files/2022-11/2022-sp.pdf.}
• ^{California ISO. (2022). California ISO extends Flex Alert to Thursday, Sept. 1. Available at: http://www.caiso.com/Documents/california-iso-extends-flex-alert-to-thursday-sept-1.pdf.}
• ^{California ISO, California Public Utilities Commission, and California Energy Commission. (2021). Root Cause Analysis: Mid-August 2020 Extreme Heat Wave. Available at: http://www.caiso.com/Documents/Final-Root-Cause-Analysis-Mid-August-2020-Extreme-Heat-Wave.pdf.}
• ^{California ISO. (2022). 20-Year Transmission Outlook. Available at: http://www.caiso.com/InitiativeDocuments/Draft20-YearTransmissionOutlook.pdf.}

2. Utility-Scale Solar and Wind Development

Dramatically scaling California’s capacity to produce renewable energy without compromising the State’s natural and working lands.

Overview

Approximately 28% of California’s energy is currently provided by utility-scale wind and solar facilities (as of 2023). SB 100 (de León, 2018) requires that by 2045, 100% of retail electricity will be provided by zero-carbon and renewable resources. 

Many alternatives exist (e.g., geothermal, natural gas with carbon capture and storage*, nuclear, hydro-, solar, and wind power). Due to low costs and high resource availability, solar and wind power will likely comprise the majority of California’s energy portfolio in a zero-carbon, renewable future. 

Distributed solar resources (e.g., rooftop solar) are and will continue to be important. Expanding this resource could avoid some of the impacts of utility-scale solar. However, these distributed resources will likely not meet all demand for renewable electricity. Further, utility-scale facilities are much more cost-effective than these small-scale applications. To meet predicted demand, unprecedented construction of utility-scale solar and wind facilities will be required. 

For example, California currently has 21 gigawatts (GW) of utility-scale solar; the SB 100 Joint Agency Report projects that an additional 70 GW of utility-scale solar will be required by 2045. Each GW of solar currently requires between 2,900 and 4,200 acres of land on average. The state is also committed to protecting and managing natural and working lands as a strategy for meeting the state’s goals for reducing greenhouse gas emissions (as per SB 1386, Wolk, 2016). 

In siting utility-scale solar and wind, the state must consider clean energy needs, while also supporting other land use priorities such as agriculture, wildlife conservation, and recreation. New utility-scale solar often requires new transmission to deliver power to customers; this infrastructure presents its own siting challenges.

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Section topics:

• Wind and solar production
• Challenges to siting renewable facilities
• Possible synergies among land uses
• Environmental impacts of renewable energy installation
• Environmental Justice and Equity Considerations
• Relevant Policies
• Relevant State Institutions

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Sources

• ^{Nyberg, M. (2024). 2023 Total System Electric Generation. Available at: https://www.energy.ca.gov/data-reports/energy-almanac/california-electricity-data/2023-total-system-electric-generation.}
• ^{Gill, L., Gutierrez, A., and Weeks, T. (2021). 2021 SB 100 Joint Agency Report, Achieving 100 Percent Clean Electricity in California: An Initial Assessment. California Energy Commission, California Public Utilities Commission and California Air Resources Board. Publication number: CEC-200-2021-00. Available at: https://www.energy.ca.gov/publications/2021/2021-sb-100-joint-agency-report-achieving-100-percent-clean-electricity.}
• ^{Ramasamy, V. et al. (2022). U.S. Solar Photovoltaic System and Energy Storage Cost Benchmarks, with Minimum Sustainable Price Analysis: Q1 2022 (No. NREL/TP-7A40-83586). National Renewable Energy Lab.}
• ^{Gill, L., Gutierrez, A., and Weeks, T. (2021). 2021 SB 100 Joint Agency Report, Achieving 100 Percent Clean Electricity in California: An Initial Assessment. California Energy Commission, California Public Utilities Commission and California Air Resources Board. Publication number: CEC-200-2021-00. Available at: https://www.energy.ca.gov/publications/2021/2021-sb-100-joint-agency-report-achieving-100-percent-clean-electricity.}
• ^{Nyberg, M. (2024). Electric Generation Capacity and Energy. Available at: https://www.energy.ca.gov/data-reports/energy-almanac/california-electricity-data/electric-generation-capacity-and-energy.}
• ^{Bolinger, M., and Bolinger, G. (2022). Land Requirements for Utility-Scale PV: An Empirical Update on Power and Energy Density. IEEE Journal of Photovoltaics, 12(2), pp. 589-594.}

3. Reliability and the Need for Clean, Firm Power

Managing the intermittency of renewable resources.

Overview

Wind and solar resources are integral to California’s path to decarbonization, but these weather- and season-dependent resources introduce reliability challenges. To cost-effectively resolve these challenges and still meet net-zero* by 2045 (as per AB 1279, Muratsuchi, 2022), the state will need clean, firm power—carbon-neutral power that can be delivered for as long as needed in the amount needed.

Utility-scale wind and solar currently comprise the majority (73%) of California’s portfolio of renewable energy. In 2023, 25.6% of the total electricity generated in-state came from these intermittent renewable resources (19.2% and 6.5% from solar and wind, respectively). Moreover, demand for electricity is expected to increase 76% (relative to demand in 2022) by 2045 as a result of population growth and electrification efforts. 

Energy storage, demand response, and grid regionalization can alleviate some—but not all—of the challenges associated with intermittent renewable resources. A diverse portfolio that also includes clean, firm power—be it geothermal, nuclear, renewable hydrogen, natural gas with carbon capture and storage, or something else—would address seasonal fluctuations and extreme weather events and is predicted to result in significantly reduced system costs and therefore lower electricity rates.

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Section topics

• The nature of renewable intermittency
• Batteries and other energy storage
• Demand response
• Coordination across states
• Clean firm power options
• Geothermal energy
• Nuclear power
• Hydropower
• Natural gas with carbon capture and storage
• Hydrogen
• Environmental Justice and Equity Considerations
• Relevant Policies
• Relevant State Institutions

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Sources

• ^{Nyberg, M. (2024). 2023 Total System Electric Generation. Available at: https://www.energy.ca.gov/data-reports/energy-almanac/california-electricity-data/2023-total-system-electric-generation.}
• ^{California Air Resources Board. (2022). 2022 Scoping Plan for Achieving Carbon Neutrality. Available at: https://ww2.arb.ca.gov/sites/default/files/2022-11/2022-sp.pdf.}
  

4. Decentralizing the Grid

Deploying, integrating, and coordinating distributed energy resources to improve energy resilience.

Overview

California’s power grid—which is more than a century old in some places—is challenged by the growth in energy demand, addition of renewable resources, and increasingly common extreme heat and wildfires. 

If effectively leveraged, distributed energy resources (DERs)* can help enhance energy resilience for consumers and the grid at large. This umbrella term includes small-scale energy resources—like rooftop solar panels, back-up generators, and batteries—that either store or generate energy and that are usually behind-the-meter (as opposed to utility-scale energy resources like power plants). DERs also include technologies that help reduce or shift energy demand (i.e., demand response and energy efficiency).

California is embarking on plans to modernize the electric grid by further integrating and coordinating these distributed resources. However, California’s grid operators and electric utilities have numerous hurdles to overcome if they are to fully realize the benefits of DERs.  

For example, transitioning from California’s historically centralized grid—whereby power is generated by a small number of large power plants and then transmitted across long distances to consumers across the state—to a more decentralized grid that also draws power from innumerable DERs will take a fundamental shift in grid management and introduces numerous challenges.

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Section topics

• DERs defined
• Distributed solar power
• Distributed battery storage
• Demand response
• Battery electric vehicles
• Energy efficiency
• Challenges
• Coordinating DERs: Strength in numbers
• Supporting distributed energy resources in California
• Net energy metering
• Environmental Justice and Equity Considerations
• Relevant Policies
• Relevant State Institutions

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Sources

• ^{California Public Utilities Commission. (2021). Order Institute Rulemaking to Modernize the Electric Grid for a High Distributed Energy Resources Future. Available at: https://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M382/K451/382451995.PDF.} 

5. Carbon Capture and Storage

Capturing difficult-to-mitigate emissions.

Overview

Carbon capture and storage* (CCS) is the process of capturing, compressing, transporting, and sequestering carbon dioxide (CO₂). Most proposed applications for CCS involve capturing CO₂ that would have otherwise been released into the atmosphere during industrial processes, particularly fuel combustion. However, new applications are emerging that remove CO₂ from ambient air (known as “direct air capture” or DAC). The captured carbon can then be sequestered in geologic formations (see Figure 5.1). A small fraction could also be used for other industrial applications (like concrete, fuels, or plastic). Much of the cost and complexity of CCS relates to separating CO₂ from other gases, especially oxygen and nitrogen.  Where CO₂ is present in higher concentrations, this separation is typically easier and less expensive.

In its proposed scenario for reaching a net-zero economy by 2045 (as per AB 1279, Muratsuchi, 2022, 2022), the California Air Resources Board (CARB) includes CCS—and DAC—to limit emissions and minimize leakage from hard-to-decarbonize sectors. This aligns with the findings of multiple studies on climate change that have found few, if any, feasible trajectories to climate stabilization without significant amounts of CCS. 

CCS deployment has historically been slow, but the pace is quickening (see Figure 5.2). There are currently 51 operational CCS facilities across 14 countries, capturing an estimated 70 metric tons of CO2 per year. An additional 788  CCS and CCS-related projects are either planned or under construction (293 and 25 of which are in the U.S. and California, respectively). Early CCS projects have produced mixed results: many have been in continuous operation for several years, but others have closed or been cancelled due to both technical and economic challenges.

The extent to which California should rely on CCS to achieve its emissions reduction goals has generated much debate. Opponents argue that CCS does not achieve the emissions reductions promised, prolongs the life of polluting industries that are often located in disadvantaged communities, and distracts from opportunities for direct emissions reductions. 

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Section topics

• CCS in California
• Capture rates and emissions reductions
• Potential risks
• Environmental Justice and Equity Considerations
• Relevant Policies
• Relevant State Institutions

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Sources

• ^{Congressional Research Service. (2022). Carbon Capture and Sequestration in the United States. Available at: https://sgp.fas.org/crs/misc/R44902.pdf.} 
• ^{California Air Resources Board. (2022). 2022 Scoping Plan for Achieving Carbon Neutrality. Available at: https://ww2.arb.ca.gov/sites/default/files/2022-11/2022-sp.pdf.}
• ^{Intergovernmental Panel on Climate Change. (2022). Summary of the 56th Session of the Intergovernmental Panel on Climate Change and the 14th Session of Working Group III: 21 March - 4 April 2022. Earth Negotiations Bulletin, 12(795), pp. 1-32.}
• ^{International Energy Agency. (2024). CCUS Projects Database. Available at: https://www.iea.org/data-and-statistics/data-product/ccus-projects-database}

6. The Future of the Natural Gas System

Reducing natural gas consumption to meet climate and air quality laws while ensuring a reliable energy supply.

Overview

More natural gas is consumed in California than in any other state except Texas. Of all natural gas consumed in state, approximately 32% is used to generate electricity; 33% is used in industry; 22% is used for residential purposes (e.g., heating and cooking); 12% is used for commercial applications; and 1% is used for vehicle fuel (Figure 6.1). Approximately 36% of California’s power is derived from natural gas (as of 2023). However, meeting the State’s climate and air quality laws requires nearly eliminating consumption of natural gas—other than at facilities with carbon capture and storage (CCS)—by 2045.

Policies are being implemented that reduce California’s dependence on natural gas due to its impacts on climate and health (via electrification, increasing energy efficiency, building more renewable resources, etc.). Between 2001 and 2023, in-state natural gas use declined by 16% despite a 15% increase in population over the same period. The California Energy Commission (CEC) predicts close to another 12% reduction by 2035 (relative to 2020 levels).

Currently, natural gas is most commonly used as an energy carrier for heat production. Renewable electricity can replace natural gas in most of these applications. However, some current uses of natural gas—particularly for firm power (i.e., power that can be delivered for as long as needed in the amount needed) and as a feedstock for chemical industries—may not be feasible to replace with renewable electricity. The key challenges for policymakers will be to transition most natural gas uses to lower-carbon alternatives while preserving the capacity to supply the hard-to-replace sectors and reducing the environmental impacts of natural gas extraction, distribution, and use, particularly methane leaks and air pollution caused by natural gas combustion.

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Section topics

• Climate, health, and safety impacts
• Decarbonizing buildings
• Natural gas infrastructure
• Meeting electricity demand
• Reducing carbon intensity
• Environmental Justice and Equity Considerations
• Relevant Policies
• Relevant State Institutions

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Sources

• ^{U.S. Energy Information Administration. (2022). California Natural Gas Consumption by End Use. Independent Statistics & Analysis. Accessed on 11/01/2022 at: https://www.eia.gov/dnav/ng/ng_cons_sum_dcu_SCA_a.htm.}
• ^{Nyberg, M. (2024). 2023 Total System Electric Generation. Available at: https://www.energy.ca.gov/data-reports/energy-almanac/california-electricity-data/2023-total-system-electric-generation.}
• ^{U.S. Energy Information Administration. (2022). Natural Gas Delivered to Consumers in California (Including Vehicle Fuel). Accessed on 11/22/2022 at: https://www.eia.gov/dnav/ng/hist/n3060ca2m.htm.}
• ^{Statista. (2025). Resident population in California from 1960 to 2023. Accessed on 1/30/2025 at: https://www.statista.com/statistics/206097/resident-population-in-california/.}
• ^{Javanbakht, H. et al. (2022). Final 2021 Integrated Energy Policy Report, Volume IV: California Energy Demand Forecast. California Energy Commission. Publication Number: CEC-100- 2021-001-V4. Available at: https://efiling.energy.ca.gov/GetDocument.aspx?tn=241581}

7. Decarbonizing Transportation

Transitioning to zero-emission vehicles and reducing vehicle miles traveled.

Overview

The transportation sector accounts for about 38% of California’s greenhouse gas (GHG) emissions (50% if including emissions from fuel production), 80% of smog-forming nitrogen oxide emissions, and 95% of diesel particulate matter emissions. 

Achieving net-zero* GHG emissions by 2045 (as per AB 1279, Muratsuchi, 2022) requires the vast majority of the transportation sector to transition to vehicles that can be powered by zero, or near-zero carbon energy. Zero-emission vehicles (ZEVs) probably cannot satisfy every transportation demand, so California has adopted a portfolio approach to decarbonizing the transportation sector. 

Critical complementary strategies include supporting markets for low- and carbon-free fuels, improving access to active transportation through safe pedestrian and bicycle pathways, optimizing city planning, and mitigating barriers to public transportation and decarbonization technologies in lower income and rural communities. 

The transition to carbon-neutral transportation is likely to provide significant co-benefits, including improvements to air pollution, public health, environmental equity, and economic development.

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Section topics

• Decarbonizing vehicles and fuels
• Zero-emission vehicles (ZEVs)
• Supporting the electric vehicle transition
• Low-carbon fuels
• Reducing vehicle miles traveled
• Environmental Justice and Equity Considerations
• Relevant Policies
• Relevant State Institutions

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Sources

• ^{California Air Resources Board. (2022). Current California GHG Emission Inventory Data. Accessed on 10/17/2023 at: https://ww2.arb.ca.gov/ghg-inventory-data.}
• ^{California Air Resources Board. (2021). Advanced Clean Trucks: Accelerating Zero-Emission Truck Markets. Accessed on 12/01/2022 at: https://ww2.arb.ca.gov/sites/default/files/2021-08/200625factsheet_ADA.pdf.}

8. Cap-and-Trade

Leveraging market mechanisms to incentivize decarbonization through 2030 (and beyond?)

Overview

As part of its implementation of AB 32 (Nunez, 2006), the California Air Resources Board (CARB) launched the statewide Cap-and-Trade Program in late 2012. The program initially covered greenhouse gases (GHGs)—including carbon dioxide (CO₂), methane (CH₄), and nitrous oxide (N₂O)—produced by the industrial and electricity sectors. Emissions associated with transportation fuels and natural gas distributors were added to the program in 2015. 

Currently about 80% of statewide emissions are covered by the cap, including emissions from electricity imports and fuel imported and consumed in the state. As a result of implementation decisions, the direct contributions of Cap-and-Trade to emission reductions achieved in California are suspected to be modest in comparison with other programs. Proceeds from the Cap-and-Trade auction are deposited into the Greenhouse Gas Reduction Fund (GGRF). The GGRF supports programs that contribute to additional emission reductions (see Figure 8.1). The future role of Cap-and-Trade in driving emission reductions through 2030 (when the program is currently set to expire) is uncertain depending in part on the performance of complementary programs. Analysts have cautioned that excessive banked allowances* jeopardize California’s ability to reach 2030 emission reduction targets.

Compared to the 2017 Scoping Plan, CARB’s 2022 Scoping Plan predicts a much more modest role for Cap-and-Trade in driving future reductions in GHG emissions. However, the Independent Emissions Market Advisory Committee—established by AB 398 (Eduardo Garcia, 2017) to analyze the performance of Cap-and-Trade—has recommended several reforms that could make the program play a larger role in driving emission reductions. 

Facilities regulated by Cap-and-Trade are disproportionately located in communities with greater numbers of residents of color and residents living in poverty. Environmental justice advocates argue the program inadequately addresses pollution in these communities because it does not require these facilities to directly reduce emissions if the operating firms satisfy their compliance obligations in other ways.

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Section topics

• Cap-and-Trade Fundamentals
• Challenges
• Environmental Justice and Equity Considerations
• Relevant Policies
• Relevant State Institutions

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Sources

• ^{California Air Resources Board. (2025). Cap-and-Trade Program: About. Accessed on 2/4/2025 at: https://ww2.arb.ca.gov/our-work/programs/cap-and-trade-program/about.}
• ^{Legislative Analyst’s Office. (2019). Assessing California’s Climate Policies. Available at: https://lao.ca.gov/handouts/resources/2019/Assessing-California-Climate-Policies-022019.pdf.}
• ^{California Climate Investments. (2023). 2023 Annual Report: Cap-and-Trade Auction Proceeds. Available at: https://ww2.arb.ca.gov/sites/default/files/auction-proceeds/cci_annual_report_2023.pdf.}
• ^{Legislative Analyst’s Office. (2017). Cap-and-Trade Extension: Issues for Legislative Oversight. Available at: https://lao.ca.gov/Publications/Report/3719.}
• ^{Burtraw, D. et al. (2022). 2021 Annual Report of the Independent Emissions Market Advisory Committee. Available at: https://calepa.ca.gov/wp-content/uploads/sites/6/2022/01/2021-IEMAC-Annual-Report.a.pdf.}

Glossary

Allowances: Each allowance in California’s Cap-and-Trade Program is a permit to emit one metric ton of carbon dioxide equivalent. The California Air Resources Board sets the total emissions cap for each year and introduces a corresponding number of allowances. Some allowances are provided directly to entities while the remainder of allowances are sold at quarterly auctions.

Balancing authority: Balancing authorities ensure that the electricity generation consistently matches consumer demand for electricity within a defined geographic area. Balancing authorities also oversee the exchange of electricity with other jurisdictions. More than 60 balancing authorities manage electric systems across the U.S.

Banked allowances: An allowance that has been purchased but not used in the current year can be banked for future use. California’s Cap-and-Trade program allows participants to save allowances for future emissions to alleviate price volatility in the market.

Base load: The minimum amount of power that must be supplied to the grid over a given time frame is referred to as the “base load.” Base load resources supply the grid with a consistent amount of power.  

Battery electric vehicles (BEVs): Vehicles powered solely by the chemical energy stored in rechargeable battery packs with no other source of propulsion.

Behind-the-meter (BTM): Behind-the-meter refers to the position of energy resources in relation to the energy user’s electric meter. BTM resources are located onsite and do not require transmission or distribution infrastructure to reach the consumer (as opposed to front-of-meter energy resources supplied by the power grid).

Biomethane: Biomethane (or renewable natural gas) is produced from decaying organic matter through anaerobic digestion by microorganisms. When biomethane is created from organic matter that would have otherwise released methane into the atmosphere (such as from landfills or wastewater treatment facilities), it is often considered to be carbon neutral or carbon negative. Biomethane is chemically identical to natural gas and can be readily substituted for all natural gas applications.

Blue hydrogen: Because of the high reactivity of hydrogen atoms, pure hydrogen (H₂) rarely exists in nature and instead must be produced. There are a variety of different methods for generating pure hydrogen. Blue hydrogen is created from natural gas in a process that includes carbon capture and storage.

Carbon capture and storage (CCS): CCS is the process of capturing, compressing, transporting, and sequestering carbon dioxide (CO₂). Most proposed applications for CCS involve capturing CO₂ that would have otherwise been released into the atmosphere during industrial processes, particularly fuel combustion.

Carbon intensity: Carbon intensity is a measure of how much carbon dioxide (or equivalent greenhouse gas) was emitted during the production of a given unit of electricity, transportation fuel, or some other good. For example, carbon intensities of different energy resources may be provided as kg of CO₂ per megawatt-hour (MWh) of electricity.

Curtail: To curtail is to reduce power generation to balance supply and demand on the grid. Curtailment is necessary when power generators are producing more power than is required by customers or can be absorbed by energy storage systems.

Demand response: Demand response is a method of grid management where consumers are signaled to adjust their energy use in response to grid conditions. Flex Alerts issued by the California Independent System Operator (CAISO) are an example of demand response where consumers are signaled to reduce their energy use (by adjusting their thermostat, avoiding the use of their ovens, etc.).   

Disadvantaged communities (DACs): Disadvantaged communities are legally defined by the California Environmental Protection Agency as per SB 535 (de León, 2012). They are identified as those communities throughout California that suffer the most from a combination of economic, health, and environmental burdens, including poverty, high unemployment, air and water pollution, hazardous waste, and high incidence of asthma and heart disease.

Distributed energy resources (DERs): Distributed energy resources are small-scale assets that either generate electricity (e.g., rooftop solar panels), store energy (e.g., 4-hour lithium batteries), or influence energy use (e.g., demand response technologies and energy efficiency). DERs are typically behind-the-meter but may be aggregated and coordinated to provide benefits to the grid.

Duck curve: Coined by the California Independent System Operator (CAlSO), the term “duck curve” refers to a chart that displays the difference between energy demand and available renewable energy (known as net demand) over the course of a single day, which roughly resembles the shape of a duck.

Electrification: Electrification refers to the process of replacing fossil fuel-powered technologies or systems with ones powered by electricity. For example, cooking can be electrified by replacing natural gas stoves with electric ovens.

Energy (cost) burden: Energy burden refers to the proportion of household income spent on energy costs. Low-income households generally have higher energy burdens.

Energy carrier: Energy carriers allow energy to be moved between systems or places. The energy they carry is then used to generate heat or mechanical work.

Enhanced oil recovery (EOR): EOR involves the injection of gas, heat, or chemicals into reservoirs to extract oil that would otherwise be unrecoverable.

Feeder circuits: Feeder circuits are composed of the main distribution lines that carry electricity from distribution substations to be delivered to large groups of consumers within a given area (e.g., multiple city blocks).

Firm power: Firm power refers to sources of energy that can be delivered reliably and for a long duration (as opposed to intermittent resources that are not consistently available).  

Fuel cell electric vehicles (FCEVs): Also known as hydrogen fuel cell vehicles, FCEVs use oxygen pulled from the air and compressed hydrogen to generate electricity via a fuel cell to power the engine.

Gigawatt (GW): Gigawatts are a unit of electric power equal to 1,000 megawatts or 1 million kilowatts. For context, during the September 2022 heat wave, the total demand for electricity in California peaked at roughly 52 GW (setting an all-time record).

Global warming potential (GWP): Global warming potential is a unit of measurement that was created to allow the comparison of global warming effects from different greenhouse gases. GWP is the amount of energy (or heat) that 1 ton of an emitted gas would absorb in the atmosphere over a given period of time compared to 1 ton of carbon dioxide.

Grid-enhancing technologies: Grid enhancing technologies include both software and hardware tools that increase the capacity and flexibility of existing transmission infrastructure. Some examples of grid enhancing technologies include dynamic line ratings (using sensors and real-time data to determine actual capacity of a transmission line) and reconductoring (replacing old conductor cables with improved cable materials).

Hazardous air pollutants: Hazardous air pollutants are designated by the U.S. Environmental Protection Agency as substances known or suspected to cause cancer or other serious health problems, including reproductive or birth defects and adverse environmental effects. Hazardous air pollutants are designated as toxic air contaminants in the state of California.

Heat pump: Heat pumps are highly efficient electric appliances that provide air conditioning, space heating, or water heating. Heat pumps operate by using electricity to transfer heat from one material to another. For example, heat pump water heaters capture heat from ambient air and transfer that heat to water in the tank (rather than using electricity to heat the water). 

Hosting capacity: Hosting capacity indicates the number of distributed energy resources that can be reliably supported on a local distribution network before upgrades to the circuit are required.

Independent system operator (ISO): ISOs are non-profit entities that manage the electric grid and wholesale electricity markets within a defined region. ISOs are independent from the utilities that own generation and transmission assets and help foster competition among these participants in the wholesale energy market. As balancing authorities, ISOs are also responsible for matching electricity supply with demand in real time. The role of ISOs is very similar to that of regional transmission operators (RTO), but RTOs hold a special status designated by the Federal Energy Regulatory Commission (FERC); ISOs either do not meet the requirements or have not applied for RTO status. The California Independent System Operator (CAISO) is just one of three ISOs in the U.S. 

Intermittency: Intermittency refers to irregularity or inconsistency. In energy, intermittent resources are those that are not continuously available such as solar and wind power.  

Investor-owned utilities (IOUs): IOUs are privately held companies that provide public utility services. California has six electric IOUs: Bear Valley Electric Service, Liberty Utilities, PacifiCorp, Pacific Gas and Electric (PG&E), San Diego Gas and Electric (SDG&E), and Southern California Edison (SCE). The latter three—PG&E, SDG&E, and SCE—are the largest in the state and participate in the California Independent System Operator (CAISO) service territory. PG&E, SDG&E, Southwest Gas, and Southern California Gas (SoCalGas) are the four largest IOUs providing natural gas service in the state. 

Leakage (Carbon leakage): Leakage occurs when market share moves from one geographic area (with more strict climate policies) to another area. Emissions appear to decrease in the geographic area with strict policies, but increase elsewhere, resulting in no net change in emissions to the atmosphere. 

Load balancing: Load balancing is the act of ensuring energy supplied to the grid matches that required to meet energy demand, resulting in a consistent electric frequency.

Load shifting: Load shifting is a form of demand response where electricity consumption is shifted from one time period to another. For example, some electric water heaters can be configured to proactively heat water during the day when electricity is cheapest and renewable energy generation greatest, rather than heating water in the evening during peak net demand.

Kilowatt (kW): This unit of electric power is equal to 1,000 watts. Electric bills are usually expressed in kilowatt hours, or the amount of electricity equivalent to 1 kilowatt delivered for 1 hour. For reference, the average household in California consumes a little more than 6,000 kWh per year. 

Megawatt (MW):  This unit of electric power is equal to 1 million watts. According to the California Independent System Operator (CAISO), 1 MW is roughly equivalent to the amount of electricity needed to meet the simultaneous demand of 750 homes.

Megawatt-hour:  A watt-hour (Wh) is the amount of energy used when one watt of power is consumed for one hour. A megawatt-hour (MWh) is a measure of energy equal to one million watt-hours (10^6 Wh) or one thousand kilowatt-hours (10^3 Wh).

Methane: Methane (CH₄) is a short-lived greenhouse gas and the second most abundant human-generated greenhouse gas after carbon dioxide (CO₂). Methane is emitted from a variety of anthropological sources including landfills, dairy farms, and oil and gas operations. Methane is the primary component of natural gas. According to the International Panel on Climate Change, methane has a global warming potential 80 times and 29.8 times higher than CO₂ over a 20-year and 100-year time span, respectively.

Microgrids: Microgrids are collections of distributed energy resources that can supply energy to consumers independent from the main power grid. They typically include a local source of energy generation, a means of storing energy, electrical cables to connect end-users, and a control system to manage energy.

Natural lands: SB 1386 (Wolk, 2016) defines natural lands as forests, grasslands, deserts, freshwater and riparian systems, wetlands, coastal and estuarine areas, watersheds, wildlands, wildlife habitat. Also included are in this definition are lands used for recreation like parks, urban and community forests, trails, greenbelts, etc.

Net demand: Net demand is a measure of total energy demand minus renewable energy generation. In California, net demand tends to be highest during the evening (from about 4:00 - 6:00 pm) as solar resources go offline.

Net-zero: Net-zero greenhouse gas emissions indicates that any emission of greenhouse gases is balanced by the removal of equivalent greenhouse gases from the atmosphere. Though similar in meaning, the term “net-zero greenhouse gas emissions” is typically considered broader in scope than “carbon neutrality,” which technically only refers to a balance in carbon emissions and removals. Achieving net-zero greenhouse gas emissions by 2045 was declared the policy of the state by AB 1279 (Muratsuchi, 2022).

Offset credits: California compliance offset credits are an alternative to allowances purchased from the Cap-and-Trade market. Offset credits are generated by projects that either prevent greenhouse gas emissions from being released or that capture emissions from ambient air. Each offset credit represents the reduction of one ton of CO₂ or other equivalent greenhouse gas. Offset credits are only generated from sectors that are not covered by the Cap-and-Trade Program. California law (AB 32, Nunez, 2006) requires that offset credits must represent real, permanent, quantifiable, verifiable and enforceable greenhouse gas emission reductions that are additional to any GHG reduction that would have otherwise occurred.

Ozone: Ozone is a greenhouse gas and toxic air pollutant, as well as the primary component of smog. Ozone is created when nitrogen oxides (NOx) and volatile organic compounds (which are emitted by vehicles, industrial plants, and consumer products) interact in the presence of sunlight and heat.

Peak demand: Peak demand refers to the largest amount of power (in MW or GW) required to meet customer demand within a specified time period.

Plug-in hybrid electric vehicles (PHEVs): PHEVs are powered by both a battery-powered electric motor and a gasoline- or diesel-powered internal combustion engine. The engine will draw on battery power for shorter trips. For longer trips, the PHEV will use on-board fuel to achieve similar driving ranges to conventional internal combustion engines.  

Pollution gap: Pollution gap refers to the difference in pollution exposure experienced by different communities (for example, between disadvantaged communities in California and the general population). 

Price signal: Price signals convey information to either consumers or producers (via cost adjustments) that results in adjustments to behavior. For example, if electricity rates are more expensive during peak net demand, consumers may decide to use less electricity during those windows of time. 

Pruning: With respect to the natural gas system, pruning is the strategic decommissioning or retirement of parts of the natural gas distribution network after households have been fully electrified. Pruning may be more cost effective than paying to maintain natural gas pipelines that are underutilized. 

Public safety power shutoff (PSPS): Utilities may intentionally cut power to specific parts of the electric grid to mitigate the risk of wildfire ignitions caused by electric infrastructure. These intentional outages are called public safety power shutoffs or “de-energization.”

Regional transmission operator (RTO): Regional transmission operators are non-profit entities that manage the transmission system and wholesale electricity markets within a defined region. RTOs are are independent from the utilities that own generation and transmission assets and help foster competition among these participants in the wholesale energy market.  As balancing authorities, RTOs are responsible for matching electricity supply with demand in real time. The roles of RTOs and independent system operators (ISOs) are very similar, but RTOs have a greater responsibility for coordinating transmission maintenance, upgrades, and expansions. There are 4 RTOs in the U.S. and 3 ISOs, which collectively serve roughly 2/3 of the U.S. population. Where no RTO or ISO exists, utilities fulfill these functions.

Retail rates: Retail rates are state-regulated prices for the sale of electricity to consumers by utilities. Retail rates reflect the bundled costs of generating, transmitting, and distributing electricity to consumers. These costs include things like new infrastructure construction, wildfire mitigation, personnel wages, and other overhead costs.

Terawatt-hour: A watt-hour (Wh) is the amount of energy used when one watt of power is consumed for one hour. A terawatt-hour (TWh) is a measure of energy equal to one trillion watt-hours (10¹² Wh) or one billion kilowatt-hours (10⁹ kWh). It quantifies large-scale electricity generation and consumption over time. For context, the U.S. consumed approximately 4,000 TWh in 2023.

Upstream emissions: Upstream emissions reflect greenhouse gas emissions that occur prior to the combustion or use of a fuel. For example, upstream emissions of oil include the emissions generated during the extraction, refining, and transportation of that oil before it reaches its final destination.

Vehicle miles traveled (VMT): Vehicle miles traveled (VMT) is a cumulative measure of how much people in a given area drive. Per capita VMT is how much the average person drives. Reducing VMT—by encouraging mass transit or walking, for example—is one method for reducing greenhouse gas emissions from the transportation sector.

Well-to-wheel emissions: Well-to-wheel is an estimate of the total cumulative emissions produced during the lifetime of a transportation fuel, from its production to use by the final consumer.

Working lands: SB 1386 (Wolk, 2016) defines working lands as those used for farming, grazing, or the production of forest products. 

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