California Energy Commission Releases Milestone Offshore Wind Energy Report and Sets Maximum Feasible Capacity and Megawatt Planning Goals for 2030 and 2045

Sheppard Mullin Richter & Hampton LLP

Sheppard Mullin Richter & Hampton LLP

Offshore wind development off the California coast took another step closer to reality on August 10, 2022 with the California Energy Commission’s release of a report setting maximum feasible capacity and megawatt goals for 2030 and 2045. The report constitutes a milestone in the planning process prescribed by AB 525, which requires that the Commission “evaluate and quantify the maximum feasible capacity of offshore wind to achieve reliability, ratepayer, employment, and decarbonization benefits” for 2030 and 2045.

In addition to responding to this directive, the report discusses the potential for offshore wind energy development in federal waters off the California coast to add technology diversity to the state’s renewable energy and zero-carbon resource portfolio and help California meet its ambitious climate and energy goals, three months after BOEM announced the first-ever federal offshore wind lease sale in California

A draft report released in May proposed preliminary planning goals of 3,000 megawatts (“MW”) by 2030 and an additional 7,000–12,000 MW for 2045, establishing a total 2045 preliminary target of 10,000-15,000 MW.

The final report sets a more flexible planning goal of 2,000-5,000 MW by 2030. The upper range of this goal could come from a full build-out of the Morro Bay Wind Energy Area (“WEA”) or a combination of a partial build-out of the Morro Bay WEA and the Humboldt WEA. According to the Commission, the lower end of this range reflects its understanding that bringing any proposed offshore wind project online by 2030 will require significant mobilization of resources and timely infrastructure investments.

The final report also sets a more aggressive planning goal of 25,000 MW for 2045. This significantly higher goal for 2045 came after Governor Newsom called for a more aspirational target and after the Commission received and considered additional feasibility studies and public comments in response to its initial goals. These preliminary planning goals are designed to be “potentially achievable but aspirational” and, according to the Commission, are established at levels that can contribute significantly to achieving California’s climate goals.

In setting these goals, the Commission was required to consider a wide range of factors influencing maximum feasible offshore capacity. According the the Commission, the most important factors were: (i) findings from the joint agency 2021 SB 100 report; (ii) the need to initiate long-term transmission and infrastructure planning; (iii) the need for renewable energy to accommodate California’s shifting peak load; (iv) generation profile of offshore wind off the California Coast; and (v) potential impacts on coastal resources, fisheries, Native American and Indigenous peoples, and national defense and strategies to address such impacts.

The Commission’s work under AB 525 will continue over the next few years. By December 31, 2022, the Energy Commission must do two things: (i) complete and submit a preliminary assessment of economic benefits as they relate to seaport investments and workforce development needs; and (ii) submit a “permitting roadmap” for efficient permitting for offshore wind projects. By June 30, 2023 the Energy Commission must develop and adopt a larger strategic plan for offshore wind development. The newly adopted megawatt planning goals will guide development of this larger strategic plan.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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