The 20-year cycle in the electricity world

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The electricity industry in California seems to face a new world about every 20 years.

  • In 1960, California was in a boom of building fossil-fueled power plants to supplement the hydropower that had been a prime motive source.
  • In 1980, the state was shifting focus from rapid growth and large central generation stations to increased energy efficiency and bringing in third-party power developers.
  • That set in motion the next wave of change two decades later. Slowing demand plus exorbitant power contract prices lead to restructuring with substantial divestiture of the utilities’ role in generating power. Unfortunately, that effort ended up half-baked due to several obvious flaws, but out of the wreckage emerged a shift to third-party renewable projects. However, the state still didn’t learn its lesson about how to set appropriate contract prices, and again rates skyrocketed.
  • This has now lead to yet another wave, with two paths. The first is the rapid emergence of distributed energy resources such at solar rooftops and garage batteries, and development of complementary technologies in electric vehicles and building electrification. The second is devolution of power resource acquisition to local entities (CCAs).
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