ACP-CA Offshore Wind Insights

Charting a Sustainable Future
Why California Should Plan for 10 GW of Offshore Wind by 2035

Molly Croll
Pacific Offshore Wind Director, American Clean Power – CA

This summer the California Public Utilities Commission (CPUC) faces an important decision on central procurement planning that will either send a strong signal to accelerate offshore wind energy or jeopardize the state’s long-term clean energy goals.

In 2023, the state passed Assembly Bill 1373, establishing a central procurement mechanism to jumpstart the state’s offshore wind market. Central procurement allows a single, dedicated buyer to contract for large-scale energy resources with long development timelines like offshore wind, providing market certainty and reducing risk to help the industry grow, reduce costs, and achieve economies of scale. The passage of AB 1373 signaled the Governor and Legislature’s interest in expanding California’s toolkit to procure diverse clean energy resources like offshore wind that are difficult for a single power provider to develop but will be necessary to meet the state’s goals of 90% clean energy by 2035 and 100% clean energy by 2045.

As California plans for large-scale offshore wind energy, the responsibility to implement AB 1373 lies with the CPUC. To ensure the necessary buy-in and investment from the different elements of the offshore wind economy, it is crucial that the CPUC sets a course for procuring 10 gigawatts (GW) of offshore wind by 2035.

Why 10 GW by 2035? Offshore wind developers need a clear signal that there is a path to market to develop their lease areas and enable offshore wind market transformation and growth. Building just a couple of offshore wind projects does not reach the tipping point to justify the required infrastructure investments in ports or transmission, nor achieve the economies of scale needed to drive down costs for future projects. Planning for 10 GW by 2035 will illustrate California’s commitment to building offshore wind at a large scale and the state’s continued leadership as an incubator for growing clean energy technologies.

Setting a strong and clear central procurement target now is also the fiscally responsible decision for California. A 10 GW target would promote affordability in the long-term by allowing costs to be shared more economically across load-serving entities as the offshore wind market grows. As a long-term strategy, central procurement can complement other more short-term CPUC strategies to promote affordability such as electrification-driven load-growth and more equitable rate design. Ratepayers won’t pay a penny for offshore wind until it’s on the grid, and initiating large-scale procurement now will reduce costs when offshore wind comes online in the mid-2030s.

Offshore wind companies are counting on the CPUC to demonstrate California’s commitment to offshore wind energy as they approach big decisions to secure financing and advance plans to develop the state’s first large-scale projects. With the confidence afforded by a 10 GW central procurement target, California’s offshore wind market can scale to generate tens of thousands of good-paying jobs while setting California on course to achieve its 100% clean energy target.