California's 'forgotten giant of clean electricity' is set to reawaken in 2023

What it means for power sector emissions and the demand for carbon allowances

Photo by F Cary Snyder on Unsplash

One of the most important factors affecting the demand for California’s carbon allowances (CCAs) is the percentage of the states electricity supply that is generated by it’s hydroelectric dams.

However, in one of the driest states in the US, one that is increasingly suffering from long periods of extreme drought, hydroelectric generation is becoming more volatile and uncertain.

Reservoir levels at this time of the year are vital in determining the power generation mix for the year ahead. Too low and the state will have to rely on carbon intensive natural gas and coal fired generators, increasing emissions and resulting in higher demand for CCAs.

Lets look at where California gets its electricity from and what current conditions might mean for power sector emissions during 2023.