California has proposed spending $5.2 billion on creating a "strategic electricity reliability reserve" that would help the state avoid blackouts when its electric grid is stressed, a 2022-2023 budget revision document showed on Friday according to Bloomberg.
California has weathered a fair amount of criticism over its electric grid, which contributed to rolling blackouts as recently as 2020. California warned last week that it could run into electricity shortages this summer with drought, heatwaves, and wildfires continuing to stress the grid.
But renewables and California's electricity exports have also stressed the grid.
The Reserve will be developed using existing generation capacity that was scheduled to retire, new generation, new storage projects, clean backup generation projects, customer side load reduction capacity that is visible to and dispatchable by CAISO during grid emergencies, and diesel and natural gas backup generation projects – which the budget document stressed would have emission controls and all required permits.
Of note were two items in that list: "existing generation capacity that was scheduled to retire" and "diesel and natural gas backup generation projects".
California is set to retire 6,000 MW of nuclear and gas-fired energy production.
The Reserve will be capable of providing up to 5,000 MW that will be available whenever the grid is stressed.
The new budget would also earmark $8 billion over five years to increase the state's system reliability and provide relief to consumers as electricity rates rise.
The budget now calls for $22.5 billion in funds for the purpose of "climate resilience and integrated climate, equity, and economic opportunity across the state's budget to mobilize a coordinated all-of-government response to the climate crisis.