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California Solar Mandate Puts More Pressure on Natural Gas

The California Energy Commission has challenged the landscape for natural gas growth in the state by mandating standards that favor solar energy in new buildings.

In a state where climate change mitigation efforts are already squeezing the historic dominance of natural gas, the requirement seeks to cut energy use in new residential buildings by 50%. The CEC unanimously adopted stronger construction standards, including the solar mandate. It is set to take effect in 2020 and would reduce greenhouse gas (GHG) emissions by the equivalent of 115,000 vehicles, the CEC said.

The solar mandate comes at a time in which climate-driven policy shifts are driving down demand for natural gas in the state. The latest forecasts by the CEC underscore a shrinking amount of gas being needed for power generation as renewables, efficiency and distributed generation are growing in importance.

While CEC projections earlier this year showed the 12-state western electric grid's use of gas-fired generation growing over the next 10 years -- due mostly to increased coal-fired plant retirements -- California's use of gas-fired generation is expected to continue to decline. From 2012 to 2016, it dropped nearly 15%.

Demand for gas-fired generation in the state is expected to drop from 1.5 Bcf/d in 2025 to 1.4 Bcf/d in 2030, according to the CEC. At the same time, the Western Electric Coordinating Council is expected to increase gas-fired generation from 6.4 Bcf/d in 2025 to 6.9 Bcf/d in 2030.

ClearView Energy Partners LLC has predicted a substantial increase in distributed generation's share of the annual power supply given the new building standards, along with a boost for the state's efforts to create more storage to assist grid management.

The CEC solar mandate would offer an alternative, or exemption, that would lower or offset the requirement if a new home had a storage system or was connected to a community storage system, ClearView said.

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