The California Independent System Operator (CAISO) has reduced its budget for transmission development by $1.3 billion in its 2024-2025 transmission plan compared to last year. This shift is due to a stronger focus on projects that enhance reliability, rather than those driven by policy, like connecting offshore wind farms.
According to CAISO’s report, the plan reflects an increase in peak demand growth, from 0.99% to 1.53%. Specifically, in the Greater Bay Area, peak load forecasts have risen significantly, indicating a need for more robust infrastructure to meet expected demand increases.
The new transmission plan aims to support the connection of 30 GW of solar power and 7 GW of onshore wind, alongside geothermal projects and battery energy storage systems. These developments are essential in areas like the Los Angeles Basin and San Diego, ensuring a reliable energy supply for growing urban centers.
CAISO’s report also mentions that the plan will facilitate the import of over 9 GW of wind energy from other states and 4.5 GW from offshore sources, including notable contributions from the Central and North Coast areas.
This February 1 report is the first delivered in line with Assembly Bill 825, which mandates annual updates on market and transmission activities. The bill, signed into law by Governor Gavin Newsom, sets the stage for a new regional organization to oversee electricity markets by 2028.
Furthermore, CAISO is adapting to federal requirements for a 20-year transmission planning cycle, which aims to incorporate new technologies and enhance state involvement in planning and cost allocation. Changes will include transitioning to a biennial planning process with the first comprehensive plan expected by spring 2030.
In addition, CAISO highlighted its plans to bolster participation in the day-ahead market and undergo necessary reforms to ensure grid reliability. The upcoming launch of the Extended Day-Ahead Market (EDAM) later this year is anticipated to facilitate further energy savings and stability.
The 2024-2025 transmission plan includes 28 reliability-focused projects, a notable increase from previous years, while reducing the number of policy-driven projects from seven to three. Overall, projected spending for these initiatives has also declined, from $6.1 billion to $4.8 billion, emphasizing a strategic shift towards enhancing grid reliability amid increasing demand.