Today the Spanish renaissance building, sandwiched between Vacaville and Dixon along Interstate 80, remains a critical piece of the grid, powering homes across the Bay Area. It is also a museum, housing artifacts from the early days of California’s energy sector.
The bygone substation, owned by Pacific Gas and Electric, illustrates how long it has been since the state saw large-scale investment in the transmission of electricity. It also underscores a challenge California faces in eliminating reliance on fossil fuels: building new power lines to carry clean energy.
More wind and solar power is coming online all the time. But yearslong permitting processes across multiple agencies, community opposition, and high costs mean it can take a decade to build the infrastructure needed to move it. Without enough power lines, California will fall short of its goal to supply 100 percent clean energy by 2045.
“Imagine it’s 2032,” said Stanford University climate policy expert Michael Wara. “I hope we’re looking back and seeing all this new transmission that got built. But if we’re not there, we’re in trouble. Because we’re not going to be able to meet the goals we’ve set.”
CLEAN ENERGY BUT NOTHING TO CARRY IT
If the grid were a network of roads, transmission lines would be highways. Miles of heavy wires held aloft by steel towers pick up electrons in bulk from power plants in far-off places and carry them to population centers. The electricity is reduced to lower voltage at substations and distributed by smaller wires to homes and businesses.
The Vaca-Dixon line was built in 1922 to supply a growing population in Northern California with energy harnessed from its powerful rivers. The post-war boom drove construction of more lines from coal, oil and gas facilities through the 1970s. Apart from a couple projects and plenty of upgrades, California has not built long-distance transmission lines since.
Yet climate change is driving an increased demand for electricity, due to extreme weather and electrification of homes and cars. California’s Independent System Operator (ISO), which oversees the grid, predicted peak demand will nearly double by 2040 as homes and businesses switch to electric vehicles and home temperature control.
Clean energy sources such as wind and solar made up 33 percent of the grid’s supply on average last year, leaving natural gas plants to fill in when the sun stops shining and the wind isn’t blowing — which is why the state is focused on expanding battery storage. But reliance on renewables has left the grid more stressed during periods of high demand, leading to threats of rolling blackouts during periods like last summer’s heat wave. All of this is leading state regulators to agree that more transmission is needed, and fast.
The ISO has not offered an estimate for how many miles of long-distance power line will be necessary. But several agencies project the grid will need to roughly triple its transmission capacity by 2050. That would mean ramping up total available capacity from around 50,000 megawatts to 150,000. It’s why the ISO’s CEO Elliot Mainzer called this moment an “inflection point.”
“There’s a much greater recognition of the role that new transmission is going to play in helping California meet its clean energy objectives,” he said. “Just the sheer magnitude of resources that are going to have to come on the grid in the next 10, 15, 20 years will require significant additional transmission investment.”
PAIN IN THE PERMITTING PROCESS
Building a single power line, say for wind farms in the waters off Morro Bay (a recent auction for leases received high-priced bids), requires a multiyear planning and permitting process. There are bound to be a variety of snags along the way, making transmission an uncertain game of risk and timing.
Major transmission upgrades will likely be needed for offshore wind development anchored to the Northern California coast near Humboldt, for example, whether cables run undersea or over the mountains. Experts expect that process to face plenty of challenges.
It took just two years to complete Vaca-Dixon. But in 2022, a long-distance transmission line faces a six- to 10-year journey through California’s regulatory system. Every new line is first blueprinted by the California Public Utilities Commission (PUC) based on demand projected by the California Energy Commission, and then planned by the ISO. Environmental and permitting reviews by utilities or third-party companies can take four or five years alone before application to the PUC for final approval.
“We’re fighting against a regulatory structure that was not built for today’s needs,” said Rob Gramlich, president of power sector consulting firm Grid Strategies.
Researchers point to long wait times for projects to connect to the grid as a symptom of longstanding backlog in the transmission process — an average solar or wind farm spends two years waiting to get studied and approved. After postponing its own deadlines for processing the whole queue, the ISO has instituted reforms to try and speed up the system.
“The backlog in the queues points to a fundamental constraint of our transmission system, that it has not kept pace with the renewable transition,” said Joe Rand, a senior scientific engineering associate at the Electricity Markets & Policy Group at Berkeley Lab. “It’s just a totally inefficient process.”
Community opposition can also be the source of delay. Whether it’s from suburban homeowners concerned about property values or indigenous tribes protecting cultural resources, advocates hope to find a public that’s more receptive to clean energy infrastructure development.
WHO PICKS UP THE CHECK?
There is also the matter of cost. In the days of Vaca-Dixon, emerging monopolies spent $100 million to build thousands of miles of transmission lines connected to river hydroelectric plants. In today’s dollars, that would be $1.7 billion. Transmission build-outs today can run into the millions of dollars per mile, making cost a source of contention between renewable energy developers and utilities.
PG&E, California’s largest utility, is still saddled with debt following bankruptcy proceedings for wildfires sparked by its equipment. New wind, solar and battery project developers, meanwhile, say they are being unfairly burdened with the costs of grid upgrades that stand to benefit the larger system.
In 2011, the Federal Energy Regulatory Commission issued rules meant to spread the costs of new power lines more broadly and open the marketplace to competitive bidders, not just monopoly utility companies. Those steps were meant to unleash a wave of transmission development, but didn’t. And the Federal Energy Regulatory Commission is in the middle of a major revamp of transmission policy. Meanwhile, electricity customers will inevitably pick up the rising cost of new line construction.
A key question for California is the capacity of monopoly utilities like PG&E to undertake this overhaul, said Edward Randolph, former deputy executive director at the Public Utilities Commission now at Caliber Strategies consulting firm. As the company prioritizes aggressive wildfire prevention, they could be lacking in the capacity to raise funding and develop new power lines.
If we want to meet state goals for a fully clean energy grid, he said, streamlining the process and making it predictable for developers is critical and instituting reforms around the edges won’t be enough.
“We need to create a kind of permanent paradigm that is durable and predictable, not something that solves the problem for one or two lines but really changes things,” said Randolph. “To do that you’ve got to dig deep into what the problem is.”
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