ACCELERATING CARBON REDUCTIONS FROM CALIFORNIA’S ELECTRICITY SECTOR

This report by Energy Innovation proposes a shift in California's energy policy to meet 2030 and 2050 greenhouse gas targets. It recommends replacing the current Renewable Portfolio Standard (RPS) and the Efficiency Savings and Performance Incentive (ESPI) with performance-based carbon and energy intensity standards to better align utility incentives with decarbonization and efficiency goals.

• The report recommends that California implement a system-wide carbon standard for the electricity sector by 2030, targeting either 393lb. CO2e/MWh or 48.9MMT CO2e. This standard would be supported by a 50 percent renewable energy procurement "backbone" to maintain investment signals for renewable developers.
• A "Target Case" scenario suggests that a more aggressive carbon intensity standard of 321lb. CO2e/MWh by 2030 is achievable at a neutral cost, meaning additional costs could be offset by fuel savings, reduced operation costs, and carbon emission credits.
• The current Renewable Portfolio Standard (RPS) is criticized for siloing renewable energy from other resources and providing no incentive for utilities to pursue low-carbon flexibility solutions, often leading to the procurement of fossil fuel-fired generators for grid flexibility.
• To improve energy efficiency in existing buildings, the report proposes replacing the Efficiency Savings and Performance Incentive (ESPI) with a performance-based energy standard targeting a reduction in a utility's kWh/capita by approximately 1.2 percent annually through 2030.
• The report suggests a comparable therms per capita standard for natural gas to incentivize carbon reductions through building electrification and the decarbonization of the gas supply.
• The existing ESPI mechanism is described as complex and opaque, with a reliance on ex post evaluations for "highly uncertain" projects—affecting 55 percent of PG&E, 53 percent of SCE, 45 percent of SDG&E, and 35 percent of SCG portfolios—which creates controversy over incentive payments.
• The report identifies a "perverse effect" in the CPUC's baseline methodology where utilities are prohibited from counting efficiency savings achieved by bringing buildings that are below code up to code, effectively stranding the most inefficient buildings.
• To enhance grid integration and reduce costs, the report recommends expanding the Energy Imbalance Market (EIM) to a West-wide electricity market and increasing coordination between CAISO, the Los Angeles Department of Water and Power (LADWP), and the Sacramento Municipal Utility District (SMUD).
• The report advocates for the expedited implementation of AB 758 (Comprehensive Energy Efficiency in Existing Buildings law) and suggests that the California Energy Commission (CEC) consider mandatory retrofit policies, such as required upgrades at the time of sale, if voluntary progress is insufficient.

APA

Orvis, R., O’Boyle, M., Aggarwal, S., & Harvey, H. (2015). ACCELERATING CARBON REDUCTIONS FROM CALIFORNIA’S ELECTRICITY SECTOR. Energy Innovation. https://energyinnovation.org/wp-content/uploads/2015_CA_ElectricityPolicy_FINAL-2.pdf

Chicago

Orvis, Robbie, Michael O’Boyle, Sonia Aggarwal, and Hal Harvey. ACCELERATING CARBON REDUCTIONS FROM CALIFORNIA’S ELECTRICITY SECTOR. Energy Innovation, 2015. https://energyinnovation.org/wp-content/uploads/2015_CA_ElectricityPolicy_FINAL-2.pdf.

Wikipedia

{{cite report |last1=Orvis |first1=Robbie |last2=O’Boyle |first2=Michael |last3=Aggarwal |first3=Sonia |last4=Harvey |first4=Hal |title=ACCELERATING CARBON REDUCTIONS FROM CALIFORNIA’S ELECTRICITY SECTOR |publisher=Energy Innovation |date=March 2015 |url=https://energyinnovation.org/wp-content/uploads/2015_CA_ElectricityPolicy_FINAL-2.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{orvis2015accelerating, author = {Orvis, Robbie and O’Boyle, Michael and Aggarwal, Sonia and Harvey, Hal}, title = {{ACCELERATING CARBON REDUCTIONS FROM CALIFORNIA’S ELECTRICITY SECTOR}}, institution = {Energy Innovation}, year = {2015}, month = mar, url = {https://energyinnovation.org/wp-content/uploads/2015_CA_ElectricityPolicy_FINAL-2.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }