Katerina Swanson
California, the state with the largest population and economy in the US, has a varied energy profile. In 2024, California was the fourth-largest producer of electricity in the nation, with renewable resources supplying 57% of the state's in-state electricity generation. Natural gas-fired power plants provided 35% of the state's total net generation, with nuclear power accounting for the remaining 7%. California's energy consumption is dominated by transportation, with the state accounting for one-tenth of US motor gasoline consumption and about one-seventh of the nation's jet fuel consumption. While California has been making progress in its transition to clean energy, with solar and wind power projects booming, fossil fuels still play a significant role in the state's energy mix.
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What You'll Learn
California's electricity imports and exports
California has some of the most ambitious renewable energy goals in the United States. The state is required to obtain at least one-third of its electricity from renewable resources by 2020 and 50% by 2030, excluding large hydropower sources. In 2024, renewable resources, including hydropower and small-scale solar power, supplied 57% of California's in-state electricity generation. Natural gas fuelled another 35%, and nuclear power provided almost all the rest.
California is the third-largest electricity consumer in the nation and imports the second-largest amount of electricity of any state. In 2019, California's net electricity imports were the largest in the country at 70.8 million megawatt-hours (MWh) or 25% of the state's total electricity supply. In 2018, the state imported 32% of its consumption, primarily wind and hydroelectric power from states in the Pacific Northwest, and nuclear, coal, and natural gas-fired production from the desert Southwest.
California's investor-owned utilities have transitioned to time-of-use pricing. As of 2021, 30.1% of electricity was imported (11.7% from the Northwest and 18.4% from the Southwest), and 33.6% was generated in-state from renewables.
California's electricity imports include hydroelectric power from the Pacific Northwest, transmitted across high-voltage lines from Oregon to Los Angeles. A 2.4 GW HVDC line, Path 27, provides coal-generated electricity to Los Angeles from Utah. Path 46 brings up to 10.6 GW of electricity from sources including hydroelectric, fossil fuels, nuclear, and solar from Nevada and Arizona. California utilities partly own and import power from several power plants in these states.
California exports its excess solar and wind-generated electricity to other states, and imports wind-generated electricity when there is no wind in California but wind in other Western states.
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Natural gas-fired power plants
California is the state with the largest population and the largest economy in the United States. It is the fourth-largest producer of electricity in the nation, accounting for about 5% of all U.S. utility-scale power generation. In 2024, renewable resources, including hydropower and small-scale solar power, supplied 57% of California's in-state electricity generation.
Natural gas plants are a large source of greenhouse gases, which contribute to global warming, as well as toxic gases like ammonia and formaldehyde, and nitrogen oxides, which contribute to Southern California's extreme smog. In 2022, gas plants failed to perform at their expected capacity during a heatwave, while significantly increasing the pollution burden for local communities. Despite this, California officials have agreed to extend operations at three natural gas plants on the Southern California coast to shore up the state's power grid and avoid rolling blackouts.
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California's renewable energy goals
California has some of the most ambitious renewable energy goals in the United States. The state has set targets to obtain at least a third of its electricity from renewable resources by 2020 and increase that to 50% by 2030, excluding large-scale hydropower. California is also leading the nation towards 100% clean energy in the future.
In 2024, California was the fourth-largest producer of electricity in the nation, and the third-largest consumer, importing the second-largest amount of electricity of any state. Renewable resources, including hydropower and small-scale solar power, supplied 57% of California's in-state electricity generation. Natural gas fuelled 35%, and nuclear power provided almost all of the rest.
California's clean energy and storage capacity is currently insufficient to replace the energy production from the Diablo Canyon nuclear plant, which has had its life extended by five years. The state's forecast of electricity demand by 2035 has risen by about 5% due to the increasing number of electric vehicles and heat pumps. California is struggling to accommodate all the new renewables seeking to connect to its transmission grid and to build the new power lines needed.
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Fossil fuel companies' future
California is a leader in renewable energy in the United States, with a focus on wind, solar, and hydroelectric power. In 2024, renewable resources supplied 57% of California's in-state electricity generation, with natural gas providing 35% and nuclear power providing almost the rest. A small amount of coal-generated electricity is imported from Utah. California is also a top producer of oil and biomass energy.
Despite California's progress in renewable energy, fossil fuels still play a significant role in the state's energy mix. As of 2024, California was the fourth-largest producer of crude oil in the US and the third-largest refiner. The state also consumes large amounts of jet fuel and gasoline, though it has the second-highest rate of electric vehicles in the world.
The future of fossil fuel companies is uncertain, with demand for oil expected to peak and decline by 2035. However, fossil fuels will still represent a significant business segment for the next few decades. National Oil Companies (NOCs) will likely dominate global oil production due to their control over reserves. International Oil Companies (IOCs), on the other hand, will lead the transition to renewable energy sources, penetrating the utility market and providing electricity to end users.
Some fossil fuel companies have begun to transition to renewable energy sources, but others, like Exxon, have resisted. There is increasing pressure from institutional investors and hedge funds for oil companies to diversify their energy portfolios and acquire companies in the renewable energy business.
To remain competitive, fossil fuel companies should redefine themselves as energy companies and leverage their engineering, procurement, logistics, and management expertise to develop a broad portfolio of energy products, including renewable sources. While fossil fuels are in decline, companies can still play a part in the transition to an environmentally sustainable economy.
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California's energy market payments
California is the state with the largest population and the largest economy in the United States. It is the fourth-largest producer of electricity in the nation and the third-largest consumer. In 2024, renewable resources, including hydropower and small-scale solar power, supplied 57% of California's in-state electricity generation. Natural gas-fired power plants provided 35% of the state's total net generation, and nuclear power provided almost all the rest. California leads the nation in electricity generation from non-hydroelectric renewable energy sources, including geothermal power, wind power, and solar power.
California has some of the most ambitious renewable energy goals in the United States. The state is required to obtain at least 33% of its electricity from renewable resources by 2020 and 50% by 2030, excluding large hydro. California is also a leader in the electric vehicle market, with the second-highest rate of plug-in cars in the world, making up half of the electric car market in the US.
The California energy market includes various players, such as the California Independent System Operator (ISO), which manages the state's electricity grid and works to maintain a balanced supply and demand through programs like Resource Adequacy (RA) and the Demand Side Grid Support Program (DSGS). The state also has utilities like Pacific Gas & Electric, which provide electricity to customers and are regulated by entities like the Public Utilities Commission.
California's energy market also includes the trading and sale of energy commodities, such as natural gas and renewable energy credits. The state's energy markets are influenced by federal and state policies, regulations, and incentives that promote renewable energy development and reduce greenhouse gas emissions. California has taken steps to transition to cleaner fuels, although advocacy groups have opposed some proposals, expressing concerns about the continued reliance on fossil-based transportation fuels.
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Frequently asked questions
In 2020, 40% of California's electricity came from fossil fuels. In 2024, natural gas-fired power plants provided 35% of the state's total net generation.
In 2024, renewable resources, including hydropower and small-scale solar power, supplied 57% of California's in-state electricity generation.
California's goal is to obtain 60% of its electricity from renewable resources by 2030.
California's largest source of electricity is natural gas-fired power plants, which provided almost half of the state's in-state generation as of 2019.
