As required by state law, the City has adopted a Renewable Portfolio Standard (RPS) policy requiring that 33% of the City’s retail electric sales be supplied by eligible renewable energy resources. However, the City’s policy is slightly more aggressive than the state’s, as the City aims to reach the 33% mark by 2015 – five years before the state requirement. As the market price of renewable power has fallen substantially over the past several years, the City has aggressively ramped up its commitments to new renewable energy projects – executing five new long-term contracts for large-scale solar photovoltaic projects between 2012 and 2014. In fact, while the state legislature recently passed a bill (SB 350) requiring Utilities in California to achieve a 50% RPS level by 2030, the City already has contracts in place for renewable supplies that are expected to provide over 57% of total electric sales by 2017! The City is also continuing to aggressively pursue energy efficiency measures in order to ratchet down its total electricity consumption, and thus reduce the volume of renewable energy purchases that are needed to satisfy its RPS requirements.
Carbon Neutral Portfolio
In 2013 the City formally adopted a Carbon Neutral Plan, which commits the City to providing its electric customers with a 100% carbon neutral electricity supply from 2013 onward. The City’s electric supply portfolio contains a variety of resources that are considered to be "eligible renewable energy resources," which means that these resources can be counted towards the City’s RPS target. In addition, the City for many years has received electricity from large hydroelectric resources that provide a carbon-free power supply, but under California’s renewable energy eligibility criteria do not count towards the RPS target. The chart below shows that, even in a severe drought year like 2014, approximately half of the City’s electric supplies are carbon neutral. (And in a “normal” hydrological year, over three-quarters of the City’s electric supplies are carbon neutral.) The City’s Power Content label provides additional information about its electricity supply.
When the five solar projects that the City has contracted for begin operating – which is expected to occur by the end of 2016 – the City will be able to provide its customers with a 100% carbon neutral electricity supply exclusively through its long-term renewable resource and hydroelectric contracts (under normal hydrological conditions). However, before those solar projects come online, as well as in drier than normal hydro years, the City plans to maintain its carbon neutral electricity supply through the purchase of renewable energy certificates (RECs) to compensate for the generic market power purchases that the City is required to make in order to satisfy its overall electricity demand.
Carbon Content of the Electricity Supply
Another way to illustrate the “carbon content” or “carbon intensity” of the City’s electric supply portfolio is to show the amount of carbon dioxide equivalent (CO2e) greenhouse gas emissions generated for each megawatt-hour (MWh) of electricity delivered to the City’s customers. The chart below illustrates the downward trend of the carbon content of the City’s electricity portfolio since 2005. This is largely due to the increasing purchases of renewable power supplies. This downward trend is expected to continue in the future as more renewable supplies are added to the portfolio.
The chart also shows the carbon content of the portfolio adjusted for an average hydrologic year, since some years are wet (resulting in more hydroelectric generation) and some are dry (resulting in less hydroelectric generation). For example, 2006 was a very wet year, so market purchases of electricity were minimal. On the other hand, we are currently experiencing historic drought conditions, which require the City to make more market purchases of electricity to meet all of its supply needs.
Map of the City of Palo Alto's Renewable Power Project Sites