California grid needs $9.3B in upgrades for shift to renewable energy (NYSEARCA:XLU) - Seeking Alpha
California grid needs $9.3B in upgrades for shift to renewable energy (NYSEARCA:XLU) | Seeking Alpha
California grid needs $9.3B in upgrades for shift to renewable energy
Utilities Select Sector SPDR® Fund ETF (XLU)
EIX,
SRE,
PCG By:
Carl Surran, SA News Editor
68 Comments
yangna
California's power grid operator said this week the state will need to spend $9.3B over the next decade on grid upgrades to support its transition to renewable energy and electric vehicles.
In a draft transition plan, the California Independent System Operator identified 46 projects it says will be needed to help planned solar plants and offshore wind farms plug into the grid, as well as new transmission lines and other grid upgrades to help improve reliability in a state that already has been hit with blackouts.
Potentially relevant tickers include ( PCG), ( EIX), ( SRE)
The transmission plan is based on projections that California will need to add 40-70 GW of power generation over the next 10 years, depending on how quickly consumers switch to electric cars and electric home appliances; California’s highest-ever recorded power demand, set in September, was 52 GW.
Electricity prices in California jumped 15% in 2022 and have increased ~80% since 2008.
Utility stocks (NYSEARCA: XLU) have sold off since August, as rising interest rates have given investors alternatives for income, and many stocks in the sector are trading at double-digit discounts to historical valuations, Eric Landis writes in an analysis posted recently on Seeking Alpha.
Related Knowledge Center: ENERGY BASICS: solar
Declining costs and government encouragement have resulted in a rapid increase in solar energy production in the United States over the past 10 years, although solar’s share remains small: 1.6 percent of all electricity generation in 2018. That rapid growth is projected to continue.