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White paper · Revised edition, August 2026

Strategies for Success in CAISO

The IRA Era in California’s Wholesale Power Market, Q3 2022 – Q1 2025

A period retrospective for utility-scale solar, wind and battery storage developers and investors. All market data is stated as of March 31, 2025 unless otherwise noted. “The period” runs from enactment of the Inflation Reduction Act on August 16, 2022 to March 31, 2025 — the quarter in which the market stopped committing to new projects and waited for the reconciliation bill that became the One Big Beautiful Bill Act.

Logan G. Williams, Managing Partner and Founder Odette Capital LLC, New York Original edition Q1 2025; research closed Q4 2024
The period at a glance: August 16, 2022 – March 31, 2025CAISO battery fleet and the events that framed the era

Preface to the Revised Edition

Why a period piece, and why the period closes where it does

The market this paper described no longer exists in the same form. The strategies that succeeded in it are worth recording precisely because the conditions were unusual.

The first edition was researched in the fourth quarter of 2024 and published in the first quarter of 2025, in the same weeks in which a new federal administration began to reverse the policy architecture the paper described. It was released with limited distribution.

The IRA was signed on August 16, 2022, and its wind and solar credits were not repealed until the One Big Beautiful Bill Act was signed on July 4, 2025. We nonetheless close the period at the end of the first quarter of 2025, because that is when the market closed it. From January 2025 the question in every investment committee, sell-side process and tax-credit negotiation was not what the law said but what it was about to say; new commitments stopped while existing positions were locked in. The first quarter of 2025 saw $7.9 billion of announced clean-energy projects cancelled, closed or downsized nationally — more than three times the total of the previous thirty months1 — while, in the same quarter, capital deployment into already-committed projects peaked as developers safe-harbored equipment and sold credits ahead of the change2.

A market that simultaneously cancels its future commitments and secures its existing positions is a market in suspension.

This revised edition does three things. It corrects and updates every figure to the close of the first quarter of 2025, which we treat as the end of the IRA era for planning purposes. It reframes the material as a retrospective: what the CAISO market looked like, what a successful entry and investment strategy looked like, and why. And it adds an epilogue recording what changed after March 2025, so that no reader mistakes a period piece for current advice.

The analytical conclusion has not changed. Between 2022 and early 2025, CAISO became the deepest utility-scale battery storage market in the world, and it did so through a specific combination of federal tax credits, state procurement mandates, and a capacity (resource adequacy) framework that rewarded four-hour storage. Developers and investors who organized around that combination did well. Those who organized around offshore wind, speculative queue positions, or solar without storage generally did not.

Executive Summary

The period in brief
32,572 MWInstalled renewables, Feb 11, 2025
~13,000 MWActive battery capacity, Dec 2024
50,852 MWResource adequacy NQC, Jan 31, 2025
3.4 TWhWind and solar curtailed in 2024
~$30bnTax-credit transfer market, 2024
500+ GWInterconnection queue after Cluster 15

What CAISO looked like at the close of the period

By early 2025 the CAISO balancing authority area served roughly 32 million consumers and about 80% of California’s demand across approximately 26,000 circuit-miles of transmission3. Its installed renewable fleet stood at 32,572 MW — 20,739 MW of utility-scale solar (63.6%), 8,346 MW of wind, 1,610 MW of geothermal, 1,147 MW of small hydro and 730 MW of biofuels — and its battery fleet, which had been approximately 500 MW in 2020, had reached roughly 13,000 MW of active capacity by December 2024 (11,454 MW under CAISO’s stricter fully-commercial count as of January 31, 2025)4. Resource adequacy net qualifying capacity was 50,852 MW against a 2024 peak of 48,323 MW and an all-time peak of 52,061 MW set on September 6, 2022.

The period had clear bookends. It opened with the Inflation Reduction Act and, three weeks later, the September 2022 heat wave that pushed CAISO to its all-time peak and real-time prices to the $2,000/MWh cap — the event that made the value of dispatchable storage evident to regulators and investors alike. It closed in a single fortnight in January 2025.

Exhibit A. The bookends of the period
Source: Odette Capital, from the sources cited in the References.

What a successful strategy looked like

Seven elements recur in the projects and platforms that created value in CAISO during the period. Each is developed in Chapter 6.

  1. Storage first. Four-hour lithium-ion batteries, standalone or co-located with solar, concentrated in the SP15 zone where solar saturation created the widest daily price spreads and the tightest evening capacity need.
  2. A resource adequacy contract as the anchor. Long-term RA or tolling agreements with investor-owned utilities and community choice aggregators, procured under the CPUC’s mid-term reliability orders (11,500 MW of net qualifying capacity for 2023–2026, plus 4,000 MW for 2026–2027), with merchant energy and ancillary-service revenue layered on top.
  3. A capital stack built on the IRA. The 30% investment tax credit extended for the first time to standalone storage; 10-point adders for domestic content and energy communities; and transferability, which turned tax credits into a $30 billion market in 2024 at 92.5 cents (ITC) and 95 cents (PTC) on the dollar14.
  4. Queue position and zonal alignment. Holding earlier-cluster interconnection positions, siting inside the zones prioritized in CAISO’s transmission plans, and meeting the readiness tests introduced when CAISO reset its process after the 354 GW Cluster 15 window15.
  5. Permitting and community readiness. Using the CEC’s AB 205 opt-in certification where local pathways were uncertain, engaging early with counties and fire authorities, and treating battery safety as a licence-to-operate issue before Moss Landing made it one.
  6. Tariff-aware procurement. Managing solar anti-dumping and countervailing duties, the scheduled increase in Section 301 tariffs on Chinese batteries, and the first IEEPA tariffs of February–March 2025 through diversified sourcing, safe-harbor purchases and domestic-content planning.
  7. Disciplined exit timing. Selling development pipelines at ready-to-build or shortly after commercial operation, when strategic buyers and infrastructure funds paid premiums for contracted CAISO capacity — a valuation marker set in January 2025 when Constellation agreed to pay 7.9× 2026 EBITDA for Calpine’s dispatchable fleet7.

1. Market Trends

The IRA era in CAISO

1.1 The snapshot at the close of the period

Table 1 sets out the figures used throughout this edition. All are drawn from CAISO’s own statistics as published in February 2025 or from the CAISO Department of Market Monitoring’s 2024 battery report3,4, so that every figure in the paper reconciles to a single dated source.

Table 1. CAISO at the close of the period: principal market statistics
MetricValueAs ofSource
Installed utility-scale solar20,739 MW (63.6% of renewables)Feb 11, 2025CAISO Key Statistics
Installed wind8,346 MW (25.6%)Feb 11, 2025CAISO Key Statistics
Geothermal / small hydro / biofuels1,610 / 1,147 / 730 MWFeb 11, 2025CAISO Key Statistics
Total installed renewables32,572 MWFeb 11, 2025CAISO Key Statistics
Battery capacity — fully commercial11,454 MWJan 31, 2025CAISO Key Statistics
Battery capacity — active in market~13,000 MW (5,800 standalone; 5,700 co-located; ~1,500 hybrid)Dec 2024CAISO DMM
Battery additions in 2024~4.0 GW2024Modo Energy (CAISO data)
Resource adequacy NQC50,852 MWJan 31, 2025CAISO Key Statistics
2024 peak demand48,323 MW (Sept 5, 2024)2024CAISO 2024 Statistics
All-time peak demand52,061 MW (Sept 6, 2022)RecordCAISO Key Statistics
Solar generation record19,650 MW (Aug 23, 2024)RecordCAISO Key Statistics
2024 wind and solar curtailment3.4 TWh (+29% vs 2023; 93% solar)2024EIA (CAISO data)
Statewide utility-scale wind + solar28.2 GW (9.7 GW in 2014)End 2024EIA
Statewide battery capacity13,391 MW (fall 2024)2024CEC
Figure 1. CAISO installed renewable resources — total 32,572 MW
Source: California ISO, Key Statistics, January 2025 (installed renewable resources as of 2/11/2025). Battery storage is reported separately: 11,454 MW fully commercial as of 1/31/2025 (CAISO); ~13,000 MW active in December 2024 (CAISO DMM). Hover or tap a bar for detail.

1.2 The battery build-out

The defining trend of the period was the speed of storage deployment. CAISO’s active battery capacity grew from about 500 MW in 2020 to 11,200 MW by June 2024 and approximately 13,000 MW by December 20244,16, with 2024 alone adding about 4 GW17 — a record that 2025 would exceed. By the end of 2024 slightly more than half of that capacity was physically paired with solar under CAISO’s co-located or hybrid models, sharing a point of interconnection with generation; the balance was standalone, the segment that would dominate additions from 2025 onward.

Operationally the fleet changed the shape of the grid. In 2024 battery charging represented about 14.7% of CAISO load between hours-ending 10 and 13, up from 8.3% in 2023, absorbing midday solar that would otherwise have been curtailed or exported. In the evening the same fleet displaced gas: in 2023 batteries supplied on average 5.6% of electricity between 5 and 9 p.m.18, and by the spring of 2024 CAISO was reporting the first evenings on which batteries were the single largest supply resource on the system after sunset. The Department of Market Monitoring found that local market power mitigation had minimal effect on battery dispatch, with only about 363 MW per hour on average subject to bid reductions — evidence that the fleet was competing rather than being constrained.

Figure 2. CAISO battery storage capacity, 2020 – 2025
Source: CAISO Department of Market Monitoring, 2024 Special Report on Battery Storage (Dec 2024 ≈ 13,000 MW; ~500 MW in 2020); EIA (8.0 GW, 2023); CAISO via Amperon (11,200 MW, June 2024); Modo Energy (15.7 GW, Dec 31, 2025). Note: active/operating capacity; CAISO’s fully-commercial count is lower (11,454 MW at 1/31/2025). December 2025 falls after the period covered by this paper.

1.3 Solar saturation, curtailment, and negative prices

Solar remained the largest renewable resource, and its success created the period’s central operating problem. CAISO curtailed 2.4 TWh of wind and solar in 2022 and 2.66 TWh in 2023, and 3.4 TWh in 2024 — a 29% year-on-year increase, 93% of it solar and most of it in the spring, when output is high and heating and cooling loads are low21. Trading in the Western Energy Imbalance Market avoided a further 274 GWh of curtailment in 2024, about 8% of the total. Statewide, utility-scale wind and solar capacity nearly tripled over the decade, from 9.7 GW in 2014 to 28.2 GW at the end of 2024.

For developers the implication was direct. Solar-only projects in SP15 faced deepening midday price collapse and rising curtailment exposure, while any project that could shift energy four hours into the evening captured both an energy spread and a capacity payment. The economics of the period pushed capital toward storage, and toward co-location, where a single interconnection could serve both.

Figure 3. CAISO wind and solar curtailment, 2021 – 2024
Source: CAISO wind and solar curtailment totals (2021: 1,504,840 MWh; 2022: 2,449,247 MWh; 2023: 2,659,527 MWh); EIA, Today in Energy, May 28, 2025 (2024: 3.4 TWh, +29% vs 2023, 93% solar).

1.4 Prices: PPAs rose, not fell

Contrary to the cost-curve narrative that dominated forecasts written in 2022, contracted prices rose through the period. LevelTen Energy’s North American solar P25 index — the most competitive quartile of offers on its marketplace — stood at $56.76/MWh in the fourth quarter of 2024, and CAISO posted the largest increases of any ISO in the index: 8.2% quarter-on-quarter and 24.7% year-on-year22. Higher interest rates from 2022 onward, tariff uncertainty on modules and cells, and interconnection scarcity all pushed in the same direction. Wind PPA offers across North America averaged $67.81/MWh in the same quarter, marking fifteen consecutive quarters in which solar had priced below wind.

Long-run cost curves still pointed down. NREL’s 2024 Annual Technology Baseline projected that overnight capital cost for utility-scale PV-plus-battery would fall from roughly $2,100/kW in 2024 to roughly $1,060/kW by 2050, and that PV-plus-storage levelized cost would decline from the high-$70s to the mid-$50s per MWh (conservative) or low-$30s (advanced)23.

The cost curves were not wrong. The period demonstrated that in a capacity-short market with rising rates and tariffs, the equilibrium contract price is set by scarcity rather than by the cost curve.

1.5 Load growth arrived late in the period

For most of the period California’s load story was flat-to-declining demand offset by electrification. That changed at the end. The CEC’s 2025 forecast projected CAISO’s 1-in-2 peak rising 15% from 46,094 MW in 2025 to 52,940 MW in 2030, and annual energy from 217,686 GWh to 271,992 GWh over the same window24. CAISO’s own transmission planning, drafted in the spring of 2025, raised its assumed year-on-year rate of peak growth from 0.99% to 1.53%, and to 2.14% in the Greater Bay Area, on the strength of transportation and building electrification and data-center interconnection requests25. The last quarter of the IRA era was therefore also the first quarter in which CAISO participants began to plan for a growing, rather than a static, system.

1.6 Policy drivers and constraints, as they stood at March 31, 2025

  • California’s Renewables Portfolio Standard (60% renewable retail sales by 2030) and SB 100 (100% renewable and zero-carbon by 2045), tightened by SB 1020 (2022) to 90% by 2035 and 95% by 2040.
  • The CPUC’s integrated resource planning orders requiring 11,500 MW of new net qualifying capacity for 2023–2026 and a further 4,000 MW for 2026–202712,13.
  • The IRA’s technology-neutral credits, standalone-storage ITC, bonus adders and transferability.
  • A resource adequacy market that, on the CPUC’s own account, recorded 82 transactions above $100/kW-month during 2023–202428.

2. Market Structure and Operations

The balancing authority, resource adequacy, procurement, interconnection and transmission

2.1 The balancing authority and the Western markets

CAISO operates the day-ahead and real-time markets for its balancing authority area and, since 2014, the Western Energy Imbalance Market (WEIM), a real-time market that by the end of 2024 had 22 active participants across 11 states with two more preparing to join, and had produced $6.62 billion in gross benefits since launch. For a CAISO developer the WEIM’s practical value was as an outlet for surplus midday solar and as a source of imports during evening ramps; its value was indirect rather than a distinct revenue stream.

The period also settled the structure of the West’s day-ahead markets. FERC accepted CAISO’s Extended Day-Ahead Market (EDAM) tariff in December 202329. By the end of the period PacifiCorp (implementation agreement April 2024; go-live May 1, 2026), Portland General Electric (June 2024), the Balancing Authority of Northern California (November 2024) and the Los Angeles Department of Water and Power (January 13, 2025) had signed implementation agreements, with NV Energy, Idaho Power, BHE Montana and PNM publicly leaning toward EDAM30. The competing Southwest Power Pool Markets+ received conditional FERC approval on January 16, 2025, with Bonneville’s choice — the largest single swing factor — still pending at the close of the period. The West was heading toward two day-ahead markets with a long seam between them.

2.2 Resource adequacy: the anchor of the revenue stack

California does not run a centralized capacity market. Instead the CPUC requires each load-serving entity (LSE) — investor-owned utility, community choice aggregator, or electric service provider — to demonstrate system, local and flexible resource adequacy (RA) against its forecast load plus a planning reserve margin, and CAISO backstops any shortfall. The planning reserve margin was 17% for the 2024 and 2025 compliance years, with an “effective” procurement target of roughly 22.5% for the summer months, and the CPUC’s new Slice-of-Day framework — under which each LSE must show sufficient capacity in every hour of the month’s worst day — took effect for the 2025 compliance year32,33.

Two features of this framework built the battery fleet. First, RA is contracted bilaterally, so a developer with a signed long-term RA or tolling agreement from an IOU or CCA had bankable revenue years before commercial operation, and the CPUC’s mid-term reliability orders obliged those buyers to sign. Second, Slice-of-Day explicitly rewards resources that can cover the post-sunset hours — that is, four-hour storage. Scarcity pricing reinforced the effect. By the end of the period the market had begun to loosen as the 2024 additions came online, but RA remained the revenue line on which every CAISO storage financing was underwritten.

2.3 The procurement mandates

The CPUC’s integrated resource planning proceeding converted state policy into purchase orders. Decision 19-11-016 required 3,300 MW of new capacity for 2021–2023. Decision 21-06-035 (June 2021) required 11,500 MW of new net qualifying capacity from zero-emitting or RPS-eligible resources between 2023 and 2026 — at the time the largest single procurement order in the state’s history — and Decision 23-02-040 (February 2023) added 4,000 MW for 2026–2027. These orders, allocated across the IOUs and CCAs by load share, are the demand side of every RA contract signed in the period. In parallel, AB 1373 (2023) authorized the Department of Water Resources to procure centrally on behalf of LSEs for resources with long lead times — long-duration storage, geothermal and offshore wind — a channel that was still in design at the close of the period35.

2.4 Interconnection: the queue and the reset

Interconnection was the binding constraint of the period. CAISO’s Cluster 14 window (2021) drew 151 GW of requests; Cluster 15, in April 2023, drew 541 requests totaling roughly 354 GW, against an informal survey that had anticipated about 300 requests in total. With approximately 188 GW of earlier-cluster projects still active, the queue exceeded 500 GW — more than ten times the system’s peak load.

Exhibit B. The queue, before and after the reset
151 GWCluster 14 requests (2021)
541Cluster 15 requests (April 2023)
~354 GWCluster 15 capacity requested
~188 GWActive earlier-cluster projects
~68 GWAdvanced to study after scoring (June 2025)
Source: CAISO, Interconnection Process Enhancements 2023 materials; CAISO, Summary of Cluster 15 Intake Scoring Results, June 12, 2025. The scoring result post-dates the period and is reported in Chapter 8.

CAISO’s response, the Interconnection Process Enhancements (IPE) 2023 initiative, reset the rules for every project in the queue. Track 2, approved by FERC in the Appendix KK “Resource Interconnection Standards” tariff (Docket ER24-2671) in 202436, introduced a zonal approach tied to the CPUC and CEC resource portfolios; a scoring system weighting project viability (site control, engineering progress), system need (including local RA), and commercial interest from LSEs and non-LSEs; and a cap on the capacity studied per zone at 150% of available transmission capability. Cluster 15 requests were required to be resubmitted through a window that ran from October 1 to December 2, 2024, and were being scored as the period closed. FERC’s Order 2023 (July 2023) provided the federal backdrop, though CAISO obtained regional variations for most of its reforms.

For developers the reset changed the definition of a good queue position. Positions in earlier clusters became scarcer and more valuable; new positions were worth little without site control, LSE interest and a location inside a portfolio zone. The IPE scoring also elevated the strategic value of surplus interconnection capacity at existing points of interconnection, which is one reason co-location and repowering at existing solar sites gained ground.

2.5 Transmission planning

CAISO’s 20-Year Transmission Outlook (May 2022) estimated $30.5 billion of transmission would be needed to integrate the state’s 2040 portfolio, and its annual plans began to deliver it. The 2022-2023 plan approved 45 projects at $7.3 billion. The 2023-2024 plan, approved May 23, 2024, added 26 projects at $6.1 billion, of which $4.59 billion was for three lines to bring North Coast (Humboldt) offshore wind to the Bay Area — a new Humboldt 500 kV substation with an HVDC line to Collinsville and a 500 kV AC line to Fern Road, both opened to competitive solicitation40. CAISO’s chief executive framed the planning task as adding roughly 7,000 MW of new resources every year to meet state goals. At the close of the period the draft 2024-2025 plan was weeks from publication; it would shift emphasis from policy-driven offshore lines toward reliability-driven upgrades and reconductoring for load growth.

3. Competitive Landscape

Who bought capacity, who built it, and what the period’s benchmark transaction said

3.1 Buyers

Group 1Investor-owned utilities

Pacific Gas and Electric (PG&E Corporation revenue $24.4 billion in 2023), Southern California Edison (Edison International revenue $16.3 billion in 2023; serving about 15 million people) and San Diego Gas and Electric carried the largest shares of the CPUC’s procurement orders and remained the counterparties of choice for lenders because of their credit and the CPUC’s cost-recovery framework — even after PG&E’s 2019–2020 bankruptcy had taught the market to price wildfire liability. PG&E also operated Diablo Canyon, the 2,240 MW nuclear plant whose retirement was reversed by SB 846 (September 2022) with a state loan of up to $1.4 billion and a federal Civil Nuclear Credit award of up to $1.1 billion; the plant supplied about 10% of the state’s electricity in 202443.

Group 2Community choice aggregators

CCAs — Clean Power Alliance, MCE, Silicon Valley Clean Energy, Peninsula Clean Energy, San Diego Community Power and their peers — grew through the period into a buyer group that rivaled the IOUs for new-build storage and solar-plus-storage RA contracts, often with faster procurement cycles and greater appetite for co-located projects. Their credit was thinner than the IOUs’, which affected pricing and security packages, but the CPUC’s central procurement entities for local RA and the sheer volume of mandated procurement kept them active throughout.

Group 3Publicly owned utilities

LADWP and SMUD are outside the CAISO balancing area and procure separately (LADWP joined the WEIM in 2021 and signed an EDAM agreement in January 2025), but both were large buyers of desert solar-plus-storage delivered at CAISO seams.

Group 4Corporate and public offtakers

Technology companies remained active buyers of California renewable energy, generally through financial or virtual PPAs; California state agencies were required by SB 1020 to procure 100% clean electricity by 2035. Neither group was a source of RA revenue, which is why in CAISO the corporate PPA was a complement to, not a substitute for, an LSE contract.

Group 5The state itself

AB 1373 added the Department of Water Resources as a central buyer for long-lead resources, and the DWR Strategic Reliability Reserve, created in 2022, procured emergency capacity directly.

3.2 Builders

The CAISO storage ecosystem at the close of the period comprised roughly 75 active owner-developers and nearly 500 battery projects under construction or in development totaling well over 100 GW18. The most prolific by project count included EIG-backed platforms, NextEra Energy Resources, Arevon, Hecate Energy and Cultivate Power; the largest operating sites included Vistra’s Moss Landing complex, the Edwards and Sanborn solar-plus-storage project in Kern County, and a series of standalone SP15 batteries built by AES, Calpine (Nova Power Bank), Terra-Gen, REV Renewables, esVolta and others.

Table 2. Principal buyers and builders in CAISO, Q3 2022 – Q1 2025
CompanyRole in CAISOPeriod facts
Pacific Gas and Electric (PG&E Corporation)Investor-owned utility; buyer; transmission owner; Diablo Canyon operator2023 revenue $24.4 billion; approximately 16 million people served; Diablo Canyon (2,240 MW) extended to 2029/2030 under SB 846.
Southern California Edison (Edison International)Investor-owned utility; buyer; transmission owner2023 revenue $16.3 billion; approximately 15 million people served; largest single procurer by load share under the CPUC mid-term reliability orders.
San Diego Gas and Electric (Sempra)Investor-owned utility; buyerIn operation since 1881; approximately 3.7 million people served in San Diego and southern Orange counties.
NextEra Energy / NextEra Energy ResourcesDeveloper and independent power producer2023 revenue $28.1 billion; among the most active battery developers in CAISO by project count.
The AES CorporationDeveloper and IPP; owner of early utility-scale CAISO batteries (Alamitos, Huntington Beach)2023 revenue $12.7 billion; exit from coal targeted for the end of 2025.
EDF Renewables North AmericaDeveloper and IPP; Riverside East solar-plus-storage (Desert Harvest, Maverick, Arica, Victory Pass)Principal Riverside East developer through the period.
Calpine CorporationIPP; Geysers geothermal (~725 MW); California gas fleet; Nova Power Bank storage (Menifee)Fleet of approximately 27 GW; agreement to be acquired by Constellation announced January 10, 2025 (net purchase price $26.6 billion; 7.9× 2026 EV/EBITDA); transaction completed January 7, 2026.
Vistra Corp.IPP; Moss Landing Energy Storage Facility (750 MW across three phases)Phase 1 (300 MW / 1,200 MWh) destroyed by fire on January 16, 2025.
Terra-Gen; Arevon; Intersect Power; Clearway; REV Renewables; esVolta; Hecate Energy; Cultivate PowerDevelopers and IPPs active in SP15 storage and in Kern and Riverside County solar-plus-storageEdwards and Sanborn (Terra-Gen, Kern County) is among the largest solar-plus-storage facilities in the world; Arevon, Hecate and Cultivate each had eight or more CAISO battery projects in development.

3.3 CAISO versus ERCOT: the two storage markets

The only inter-ISO comparison that carried analytical weight in the period was with Texas. At mid-2024 CAISO had 9.87 GW of operating batteries to ERCOT’s 7.74 GW51; by the end of 2024 the figures were approximately 13 GW and 10 GW. The two markets reached similar scale by opposite routes. CAISO’s fleet was built on bilateral RA contracts with LSEs under CPUC mandates, supported by the IRA’s storage ITC; ERCOT’s was built merchant, on energy and ancillary-service revenue in an energy-only market with a $5,000/MWh cap. CAISO offered bankable contracted cash flows and slower, more expensive development; ERCOT offered faster interconnection and higher but more volatile returns. ERCOT would overtake CAISO in installed capacity in the second quarter of 202552, but not in contracted capacity.

Figure 4. CAISO vs ERCOT operating battery capacity
Source: S&P Global Commodity Insights (Q2 2024: CAISO 9.867 GW, ERCOT 7.74 GW); CAISO DMM (Dec 2024 ≈ 13 GW); ERCOT ≈ 10 GW at end-2024 (approx.; 14.17 GW by end-Q2 2025 per S&P, when ERCOT passed CAISO); Modo Energy (CAISO 15.7 GW) and ERCOT (15,981 MW), Dec 2025. Note: December 2025 post-dates the period. CAISO capacity is largely under RA or tolling contracts with load-serving entities; ERCOT capacity is largely merchant.
Table 3. CAISO and ERCOT storage markets compared
CAISOERCOT
Batteries operating, mid-20249.87 GW7.74 GW
Batteries operating, end-2024 (approx.)~13 GW (DMM)~10 GW (14.2 GW by end-Q2 2025, when ERCOT passed CAISO)
Installed wind / solar8.3 GW / 20.7 GW (Feb 2025)~40 GW / ~30 GW (40.0 / 32.7 GW by Jul 2025)
Customers; transmission32 million; ~26,000 circuit-miles27 million (~90% of Texas load); 54,100+ miles
Peak demand (record)52,061 MW (Sept 2022)85,508 MW (Aug 2023)
Primary storage revenue modelContracted RA / tolling with LSEs; merchant energy on topMerchant energy and ancillary services
Capacity mechanismBilateral resource adequacy under CPUC mandatesNone (energy-only market)
InterconnectionCluster study, 500+ GW queue, IPE reforms“Connect and manage,” faster and cheaper
Offer cap$2,000/MWh (hard)$5,000/MWh

3.4 The M&A marker: Constellation–Calpine

On January 10, 2025, Constellation Energy agreed to acquire Calpine from Energy Capital Partners, CPP Investments and Access Industries for an equity price of approximately $16.4 billion (50 million Constellation shares plus $4.5 billion in cash) and the assumption of about $12.7 billion of net debt — a net purchase price of $26.6 billion after expected interim cash generation and tax attributes, or 7.9× 2026 EV/EBITDA7. For CAISO participants the transaction was the period’s clearest statement of what dispatchable, capacity-earning assets in a tightening Western market were worth to a strategic buyer, and it set the reference multiple against which contracted storage platforms were marked in the following months.

3.5 SWOT, restated

  • Deepest contracted storage market in the world (~13 GW active, December 2024) with mandated demand of 15.5 GW NQC through 2027.
  • Bankable IOU and CCA counterparties under a CPUC cost-recovery framework.
  • World-class solar resource in the desert Southwest and a transmission plan funded to $6.1 billion (2023-24) on top of prior approvals.
Assessed as of the close of the period, March 31, 2025 (Tables 4 and 5 in the print edition).

4. Regulatory and Policy Framework

As of March 31, 2025
Table 6. California statutory and regulatory framework as of March 31, 2025
InstrumentWhat it didWhy it mattered in CAISO
Renewables Portfolio Standard (SB 350, 2015)60% of retail sales from RPS-eligible renewables by 2030; annual compliance reporting.Baseline demand for solar and wind PPAs; 42.9% achieved in 2023.
SB 100 (2018)100% of retail sales and state loads from renewable and zero-carbon resources by 2045.Set the long-run portfolio; 67% zero-carbon achieved in 2023.
SB 1020 (2022)Interim targets of 90% by 2035 and 95% by 2040; 100% clean for state agencies by 2035.Pulled procurement forward into the period.
CPUC integrated resource planning — D.19-11-016, D.21-06-035, D.23-02-0403,300 MW (2021–23); 11,500 MW NQC (2023–26); 4,000 MW NQC (2026–27) of new zero-emitting or RPS-eligible capacity, allocated to all LSEs.The demand side of every RA and tolling contract signed in the period.
Resource adequacy (CPUC R.21-10-002; R.23-10-011)17% planning reserve margin for 2024–25; effective PRM ~22.5% in summer; Slice-of-Day 24-hour showings from the 2025 compliance year (D.24-06-004).Made four-hour storage the highest-value RA resource; scarcity pricing in 2023–24.
AB 2514 (2010) storage mandateCPUC target of 1,325 MW of utility storage procurement by 2020 (installed by 2024).The original seed of the storage market; long since exceeded.
AB 205 (2022)Created the CEC opt-in certification program for renewable and storage projects of 50 MW or more — a single state permit with a 270-day decision target — and the DWR Strategic Reliability Reserve.Alternative to county permitting where local opposition or capacity was a constraint.
SB 846 (2022)Extended Diablo Canyon (2,240 MW) to 2029/2030 with up to $1.4 billion in state loans; federal Civil Nuclear Credit of up to $1.1 billion.Kept ~10% of state energy on the system; reduced near-term RA scarcity.
AB 1373 (2023)Authorized DWR to procure centrally for long-lead resources (long-duration storage, geothermal, offshore wind).Created a state channel for resources LSEs would not contract alone.
SB 38 (2023)Required emergency response and communication plans for battery storage facilities.The baseline safety regime in force when Moss Landing burned.
Cap-and-Trade (AB 32; AB 398 extension to 2030)Economy-wide carbon price; proceeds fund California Climate Investments.Supported the clean-energy premium in wholesale prices; reauthorized beyond 2030 in 2025 (see Epilogue).
CEQA; Williamson Act; county general plansEnvironmental review; agricultural land preservation contracts; local zoning.The everyday permitting friction of desert and Central Valley siting.

5. Site Selection

Two archetypes revisited: Riverside East and Morro Bay

5.1 Resource availability

California’s resource endowment did not change during the period, but its ranking did. Direct normal irradiation in the Mojave and Colorado Desert reaches the highest values in the continental United States (7–8.5 kWh/m²/day on the World Bank/Solargis Global Solar Atlas), which is why the Riverside East Solar Energy Zone and the corridors along I-10 and State Route 177 remained the core of utility-scale solar development. Offshore, NREL’s 2022 assessment of the Morro Bay and Humboldt wind energy areas found annual mean wind speeds at hub height in the 8–10 m/s range, with Humboldt the stronger of the two70 — a resource of the first rank that could not, in the period, be developed at acceptable cost.

5.2 Riverside County: solar-plus-storage on public land

The Riverside East Solar Energy Zone, designated by the Bureau of Land Management under the Western Solar Plan and refined by the DRECP to protect the approaches to Joshua Tree National Park, offered flat basins, sparse vegetation, proximity to the I-10 corridor and existing SCE and IID transmission, and a county Eligible Renewable Energy Resource Development policy that explicitly supported solar paired with storage. CAISO’s 20-Year Outlook assumed roughly 12,266 MW of new solar in the SDG&E area and 4,001 MW in the IID area — 16,267 MW in the region — and prioritized the transmission to deliver it. The trade-offs were known: significant wildfire and extreme-heat exposure, a 2–3 GW seasonal surplus that deepened curtailment, and BLM leasing timelines. The archetype worked. Solar-plus-storage and standalone storage in the eastern SCE and IID footprint were the most heavily contracted assets of the period.

5.3 Morro Bay: floating offshore wind on federal water

The Morro Bay Wind Energy Area covers about 240,898 acres roughly 20 miles off the central coast. In the December 2022 BOEM auction — the first for floating wind in the United States, raising $757 million across five California leases — the three Morro Bay leases went to Equinor, Golden State Wind and Invenergy (Even Keel Wind)73. The state’s AB 525 planning goals and CAISO’s 20-Year Outlook allowance of 5,400 MW for Morro Bay made it the most policy-supported wind site in the state. The 2023-2024 transmission plan nonetheless directed its $4.59 billion of offshore-wind investment to Humboldt, not Morro Bay, and AB 1373’s central procurement mechanism — the only realistic buyer for a $3,000/kW-plus resource — was still in design.

At the close of the period the leases were intact, no construction and operations plans had been approved, and the January 20, 2025 memorandum had frozen new federal approvals and ordered a review of existing leases. The reasonable assessment in March 2025 was that Morro Bay had moved from a 2030s project to an option on a change in federal policy. The epilogue records what became of that option.

5.4 The lesson of the two archetypes

Sites that won in the period shared four attributes: existing or planned transmission within the CAISO plan, a resource that could be firmed with four-hour storage on the same interconnection, a permitting path with a state backstop (AB 205 or BLM/DRECP), and no dependence on a federal approval that a change of administration could withdraw. Riverside East had all four. Morro Bay had two.

Table 8. Site assessment at the close of the period

Riverside County — solar and BESS

Outcome in the period: heavily contracted; the core of the storage build-out.

Morro Bay — floating offshore wind

Outcome in the period: stalled; two of three leases surrendered in 2026 (see Epilogue).
Select a criterion above to compare the two sites. Economics from NREL’s 2024 Annual Technology Baseline.

6. What a Successful Strategy Looked Like

Seven pillars, three archetypes, and the approaches that failed

6.1 The seven pillars

Pillar 1Storage first, SP15 weighted

The asset that defined the period was a four-hour lithium-ion battery, sized to the CPUC’s RA counting rules, located in the SP15 zone where solar saturation created the deepest midday-to-evening spreads and the highest local RA premiums, and interconnected either standalone or co-located with solar at a shared point of interconnection. Co-location captured the ITC on the storage, shared gen-tie and interconnection costs, and — after FERC Order 845 and CAISO’s co-located resource model — allowed the battery to charge from the grid as well as from the paired solar. Standalone batteries took over as additions shifted from 2024 to 2025 because they could use surplus interconnection capacity at existing sites and were simpler to contract.

Pillar 2A resource adequacy contract as the anchor

Every financeable CAISO storage project in the period began with a signed long-term RA-only, tolling or hybrid PPA with an IOU or CCA, typically 10–20 years, procured under the mid-term reliability orders. The contract fixed the capacity revenue that lenders and tax-credit buyers underwrote; energy arbitrage, ancillary services and, from 2025, Slice-of-Day-driven hourly value were upside. Successful developers ran parallel RFO campaigns with the three IOUs and the larger CCAs, understood the CPUC’s net qualifying capacity and effective-load-carrying-capability rules before they sized the project, and structured for local RA premiums where the site allowed. They also priced counterparty risk: IOU paper was cheaper to finance than CCA paper, and the difference showed up in the offer.

Pillar 3A capital stack built on the IRA

The period’s capital stack was ITC-led. For storage, the 30% ITC (with prevailing wage and apprenticeship compliance from January 2023) was frequently lifted to 40% by the energy-community adder, which many desert and Central Valley sites qualified for, and occasionally to 50% with domestic content. Tax equity remained available for large sponsors, but transferability changed the market for other sponsors: 2024 transfers reached about $30 billion, with ITCs clearing at 92.5 cents and PTCs at 95 cents on the dollar. Successful sponsors locked transfer agreements early, insured ITC deals (three-quarters of ITC transfers carried insurance), and treated the Treasury’s prevailing wage, apprenticeship and domestic-content rules as a compliance function rather than a legal afterthought. Debt was sized to the contracted RA revenue and priced through a rate cycle that took the ten-year Treasury from under 2% in early 2022 to above 4.5% at points in 2023–2024.

Pillar 4Queue position and zonal alignment

Interconnection determined who could build. Developers who held Cluster 13 or 14 positions, or interconnection agreements from earlier clusters, had an asset that appreciated throughout the period; those who filed in Cluster 15 discovered in 2024 that the rules had changed and that their positions were worth little without site control, LSE commercial interest and a location inside a CPUC/CEC portfolio zone. The strategy that worked was to align siting with CAISO’s transmission plan zones before filing, to secure a memorandum of interest from a load-serving entity ahead of the scoring window, to pursue surplus interconnection service at existing plants (FERC Order 845), and to treat the December 2024 resubmission as a competitive bid rather than a formality. Queue speculation — filing broadly and selling positions — ended with Cluster 15.

Pillar 5Permitting, community and safety readiness

The permitting decision of the period was county versus CEC. Where a county had capacity and a supportive general plan, the local route was faster; where it did not, AB 205’s opt-in certification offered a 270-day state decision with the CEC as CEQA lead agency. Either way, successful projects arrived with community benefit agreements, local hiring commitments, wildlife and visual mitigation, and — decisively after January 16, 2025 — a battery safety package built to NFPA 855 (2023 edition), the SB 38 emergency response plan, and the CPUC’s General Order 167 regime, with outdoor containerized systems, deflagration venting and early engagement with the local fire authority. The Moss Landing fire converted safety from an engineering specification into a condition of the licence to operate.

Pillar 6Tariff-aware procurement

Supply chain risk in the period was tariff risk. Solar sponsors managed the Section 201 safeguard and the 2024 antidumping and countervailing duty investigations on Southeast Asian cells and modules; storage sponsors watched the Section 301 tariff on Chinese non-EV lithium-ion batteries, scheduled to rise from 7.5% to 25% on January 1, 2026, and then the first IEEPA tariffs of February and March 2025. The response that worked was to buy ahead — safe-harboring cells and modules into bonded inventory in late 2024 — to diversify suppliers across Korea, Japan and the emerging U.S. cell base, and to map domestic-content adder eligibility at the bill-of-materials level. Sponsors who assumed the 2022–2024 tariff regime was stable were the first to be repriced in 2025.

Pillar 7Disciplined exit timing

The period rewarded developers who sold at the right point in the lifecycle. Development pipelines with interconnection agreements and RA contracts commanded premiums from independent power producers and infrastructure funds; operating standalone storage in SP15 attracted strategic and financial buyers; platforms with repeatable origination in CAISO traded on multiples that the Constellation–Calpine agreement (7.9× 2026 EBITDA for a dispatchable fleet) anchored in January 2025. For a mid-market developer the practical implication was to run a sell-side process at ready-to-build or shortly after commercial operation rather than to hold to terminal value — a decision made easier by the visible narrowing of the federal window in the first quarter of 2025.

6.2 Three archetypes

Table 9. Three archetypes of value creation in CAISO, Q3 2022 – Q1 2025
ArchetypeHow it made moneyWhat it neededRepresentative exit
Greenfield developer (develop-to-RTB)Originated sites, queue positions, permits and RA contracts; sold at ready-to-build to IPPs and funds.Early-cluster queue positions; LSE relationships; county and CEC permitting capability; modest balance sheet.Portfolio or project sale at RTB; often with development-fee earn-outs tied to COD.
Independent power producer (own and operate)Built and held contracted storage and solar-plus-storage; layered merchant upside; recycled capital through tax-credit transfers and project-level debt.Tax-credit monetization capacity; construction management; RA compliance and market bidding capability; scale purchasing.Platform recapitalization or sale to a strategic (utility, oil major, infrastructure fund).
Financial investor (platform or portfolio)Backed developers or acquired operating portfolios; underwrote to contracted RA cash flows with merchant optionality.Sector diligence capability; tax-credit transfer counterparties; tolerance for California regulatory process.Sale to a strategic at a capacity-driven multiple; the Calpine transaction was the period’s marker.

6.3 Approaches that did not succeed

  • Solar without storage in SP15. Rising curtailment (3.4 TWh in 2024), negative midday prices and Slice-of-Day counting rules concentrated solar-only RA value in the daytime slices where the system was already long.
  • Queue speculation. Filing many Cluster 15 positions without site control or LSE interest, expecting to trade them; the IPE reforms and the December 2024 resubmission window eliminated the strategy.
  • Offshore-dependent strategies. Any plan whose critical path ran through a federal wind approval was exposed to a single executive action, which arrived on January 20, 2025.
  • Indoor, high-density battery buildings on constrained sites. The design lineage of Moss Landing Phase 1 became difficult to insure or to permit within weeks of the fire.
  • Treating tariffs and tax rules as static. Sponsors who did not safe-harbor equipment or document prevailing wage and apprenticeship compliance found their 2025 economics repriced.
  • Corporate PPA as the anchor. In CAISO a corporate offtake agreement delivered no RA revenue; projects underwritten on it alone could not be financed as storage.

6.4 Offtake channels and stakeholder communications, as practiced

Several offtake channels were available to a utility-scale developer in the period. In order of importance: (1) IOU and CCA resource-adequacy and hybrid PPA solicitations driven by the CPUC’s orders; (2) the CPUC’s central procurement entities for local RA; (3) DWR central procurement under AB 1373 for long-lead resources (still in design at the close); (4) corporate and public-agency PPAs as energy and REC complements; and (5) merchant participation in CAISO’s energy and ancillary-service markets and, prospectively, EDAM. Advisory support was most valuable at the point of monetization — the packaging of queue position, contract and permit into an asset that a strategic buyer would pay for.

Stakeholder communication in the period converged on four messages that regulators, counties and communities responded to: reliability, safety, local benefit, and alignment with the state’s targets. Messages about corporate sustainability or “innovation” carried little weight with the audiences that actually decided permits and contracts.

7. Risk Management

What the period taught
Table 10. Principal risks and the mitigations that proved effective
RiskHow it showed up, Q3 2022 – Q1 2025Mitigation that worked
Federal policyDisbursement pause and offshore-wind memorandum (Jan 20, 2025); rising probability of tax-credit legislation through Q1 2025.Safe-harbor construction starts and equipment purchases; transfer agreements executed early; diversification away from federally-permitted resources.
State regulatoryIPE 2023 queue reset; Slice-of-Day implementation; evolving local RA rules; wildfire cost allocation for IOUs.Portfolio-zone siting; early LSE engagement; RA counting expertise in-house; regulatory counsel on retainer.
Interconnection500+ GW queue; Cluster 15 resubmission; deliverability allocation uncertainty.Earlier-cluster positions; surplus interconnection at existing POIs; co-location; readiness documentation.
Financing and ratesTen-year Treasury from under 2% (early 2022) to above 4.5% (2023–24); tax-equity scarcity.Transferability; contracted RA as the sizing case; rate hedges at financial close.
Technology and safetyMoss Landing (Jan 16, 2025); ten CPUC-listed storage incidents since 2021; GO 167-C adopted Mar 13, 2025.Outdoor containerized LFP designs; NFPA 855 compliance; performance and availability guarantees; augmentation reserves.
Market price$2,000/MWh cap reached in Sept 2022; negative midday prices; curtailment +29% in 2024; ancillary-service saturation.RA contract as anchor; hybrid contracts with merchant share; storage sized to Slice-of-Day value.
Environmental and communityDRECP exclusions; Williamson Act; local moratoria after Moss Landing; commercial fishing litigation offshore.Community benefit agreements; CEC opt-in where counties stalled; early wildlife and visual mitigation.
LegalContractor disputes on schedule; NIMBY litigation; post-fire tort claims (Moss Landing suits filed March 2025).Clear EPC risk allocation; insurance reviewed for battery fire; transparent community communication.
Trade and supply chainSection 201; Southeast Asia AD/CVD (2024); Section 301 escalation scheduled for 2026; IEEPA tariffs from Feb 2025.Forward purchasing; supplier diversification; domestic-content mapping.
Offtaker creditIOU wildfire exposure; CCA thin credit; contract renegotiation requests as PPA prices rose.Security packages calibrated to counterparty; IOU/CCA mix in the portfolio.
ExecutionLabor and transformer shortages; interconnection upgrade delays; prevailing wage and apprenticeship compliance.Long-lead procurement; schedule float; compliance staffing.

8. The Interregnum

April 1 – July 4, 2025

The IRA era ended in practice in the first quarter of 2025 and in law on July 4. This chapter covers the ninety-five days in between, so that the reader knows what the market was waiting for and what it did while it waited.

New commitments. E2’s Clean Economy Works tracker recorded $7.9 billion of announced clean-energy factories and projects cancelled, closed or downsized in the first quarter of 2025 across 16 projects — more than three times the total for the previous thirty months — rising to $14 billion and 10,000 jobs by the end of April, $22 billion and 16,500 jobs by the end of June, and $34.8 billion for the full year77,79. Developers stopped filing, buyers stopped signing platform and pipeline transactions, and tax-credit buyers began asking how the pending bill would change their own tax liabilities. In CAISO specifically, the operating battery fleet kept growing through 2025 — those projects had been financed in 2023 and 2024 — but new origination, new financings and portfolio M&A were suspended.

Table 11. Sequence of events, April 1 – July 4, 2025
Source: as cited in the References. Select a category above to filter the sequence.

Conclusion

Lessons carried forward

The IRA era in CAISO lasted roughly thirty-one months in practice and thirty-four in law. In that time the market built the world’s largest contracted battery fleet, reset its interconnection process, launched a Western day-ahead market, and discovered that a decade of flat load was ending. The strategies that succeeded were not novel. They were storage-first siting in the zone with the deepest need, a capacity contract as the first dollar of revenue, a capital stack that used the federal credits as designed, a queue strategy built on readiness rather than volume, permitting and safety treated as commercial imperatives, procurement that assumed the tariff regime would move, and a willingness to sell when the buyer was paying for what the developer had actually created.

Lesson 1Capacity is the product

CAISO paid for evening capability, not for energy. That is more true, not less, as load growth returns.

Lesson 2Contract beats cost curve

Prices rose through a period in which technology costs fell, because the binding constraints were interconnection, capital and policy. Underwrite to the contract.

Lesson 3Federal dependence is a discount rate

Every strategy that required a federal approval a future administration could withdraw was repriced or eliminated. Storage survived the OBBBA; offshore wind did not survive a memorandum.

Lesson 4Readiness is the new queue position

Site control, an LSE letter and a portfolio zone are now the entry ticket; volume is not.

Lesson 5Safety is a licence

After Moss Landing, a battery project without a fire authority sign-off has no community, no insurer and no counterparty.

About this record. Odette Capital advised on sell-side and capital-formation mandates in this market during the period; this paper reflects that experience. It is published as a record of the period and as a reference for the one that follows.

Epilogue: After July 4, 2025

Everything below post-dates the signing of the One Big Beautiful Bill Act

Federal tax credits

The One Big Beautiful Bill Act, signed July 4, 2025, ended the technology-neutral §45Y and §48E credits for wind and solar facilities placed in service after December 31, 2027, with an exception for facilities that began construction by July 4, 2026 (which then have the usual four-year continuity window). Energy storage kept the original IRA schedule — full credit for projects beginning construction before 2033, phasing down thereafter.

The asset class that defined the period survived. The asset classes around it did not.

The act also imposed “foreign entity of concern” restrictions, including material-assistance cost-ratio tests, on projects beginning construction after December 31, 2025; removed five-year MACRS for post-2024 starts (while making 100% bonus depreciation permanent); terminated the §25D residential solar credit after December 31, 2025; and, for wind, ended the §45X credit for components sold after 202787,88. A July 7, 2025 executive order directed Treasury to tighten begin-construction rules, which it did on August 15, 2025, eliminating the 5% safe harbor for larger wind and solar projects in favor of a physical-work test.

Offshore wind

On December 8, 2025 a federal district court vacated the agencies’ pause on wind approvals as a violation of the Administrative Procedure Act; on December 22, 2025 the administration suspended the leases of five large East Coast projects on national-security grounds. In California the outcome was settlement rather than litigation. In April 2026 Golden State Wind surrendered its Morro Bay lease in exchange for the return of roughly $120 million; in June 2026 Invenergy surrendered Even Keel Wind at Morro Bay together with three Atlantic leases, redirecting $765 million to gas-fired and geothermal projects. Equinor is the sole remaining Morro Bay leaseholder. On June 23, 2026 the California Energy Commission and the Attorney General issued notices of intent to sue the Department of the Interior over the settlements. The Morro Bay archetype described in Chapter 5 has, for practical purposes, ended.

Storage, safety and the market

The CAISO battery fleet reached 15.7 GW at December 31, 2025, adding a record 4.7 GW during the year with standalone systems now 59% of the fleet and 93% of fourth-quarter additions17; on April 21, 2025 batteries met 36.6% of CAISO load between 5 and 9 p.m., discharging 42.6 GWh. The CEC counted 15,763 MW statewide by April 2025. ERCOT overtook CAISO in installed capacity in the second quarter of 2025 and stood at 15,981 MW in December 2025 — but still without a contracted capacity framework. SB 283 and AB 303 carried the Moss Landing response through the legislature, and EPA-supervised battery removal continued through 2025 and 2026 under the General Order 167-C regime adopted in March 2025.

Interconnection, transmission and Western markets

Following the Cluster 15 scoring, CAISO issued the IPE 5.0 draft final proposal in October 2025; the Cluster 16 window is scheduled to open in October 2026. The 2024-2025 Transmission Plan approved in May 2025 (31 projects, $4.8 billion) is now in execution, with load-growth-driven reliability projects and advanced-conductor reconductoring displacing the policy-driven offshore-wind lines that dominated the 2023-24 plan. EDAM went live on May 1, 2026 with PacifiCorp; Portland General Electric is scheduled for October 2026, LADWP, BANC, PNM and Turlock Irrigation District for 2027, and Imperial Irrigation District for 2028, at which point EDAM is expected to serve about 42% of Western demand. Bonneville adopted a policy to pursue SPP Markets+ in May 2025, and Markets+ is targeting an October 2027 launch. The two-market West is now a fact.

Other markers

  • The NRC approved Diablo Canyon’s 20-year license renewal on April 2, 2026; operation beyond 2029/2030 still requires state action.
  • LevelTen’s North American solar P25 index reached $61.67/MWh in the fourth quarter of 2025, up 9% year-on-year, with wind at $73.77/MWh — policy and tariff costs continuing to flow into contract prices.
  • California extended its cap-and-trade program beyond 2030 in September 2025 legislation, renaming it cap-and-invest.
  • Constellation completed the Calpine acquisition on January 7, 2026, following FERC approval on July 24, 2025 and a December 4, 2025 settlement with the Department of Justice requiring divestitures in PJM and ERCOT; no California assets were divested.

Appendix: Q1 2025 Data Snapshot

Principal statistics for the period, with sources
ItemValueAs of / periodSource
CAISO service~80% of California demand; 32 million consumers; ~26,000 circuit-miles; 22 PTOs; 331 market participants; ~33% of WECC demandFeb 2025CAISO Key Statistics
Installed renewables32,572 MW (solar 20,739; wind 8,346; geothermal 1,610; small hydro 1,147; biofuels 730)Feb 11, 2025CAISO Key Statistics
Battery capacity11,454 MW commercial (Jan 31, 2025); ~13,000 MW active (Dec 2024); statewide 13,391 MW (fall 2024)—CAISO; DMM; CEC
Battery mix5,800 MW standalone; 5,700 MW co-located; ~1,500 MW hybrid storage; 2024 additions ~4.0 GWDec 2024CAISO DMM; Modo
Battery charging share of load, HE10–1314.7% (2024); 8.3% (2023)—CAISO DMM
RA net qualifying capacity50,852 MWJan 31, 2025CAISO
Peak demand48,323 MW (Sept 5, 2024); record 52,061 MW (Sept 6, 2022)—CAISO
RecordsSolar 19,650 MW (Aug 23, 2024); wind 6,465 MW (May 28, 2022); 3-hour ramp 23,228 MWh (Jan 20, 2025)—CAISO
Curtailment2022: 2.4 TWh; 2024: 3.4 TWh (+29%; 93% solar); WEIM avoided 274 GWh (2024)—EIA / CAISO
WEIM22 active, 2 future participants; 11 states; $6.62B gross benefits since 2014; $374M in Q4 2024Q4 2024CAISO
EDAM signatoriesPacifiCorp, Portland General, BANC, LADWP; leaning: NV Energy, Idaho Power, BHE Montana, PNMJan 2025Western Energy Markets
InterconnectionCluster 14: 151 GW; Cluster 15: 541 requests, ~354 GW; earlier active ~188 GW; resubmission Oct 1 – Dec 2, 2024—CAISO
Transmission plans20-Year Outlook $30.5B (2022); 2022-23 TPP 45 projects / $7.3B; 2023-24 TPP 26 projects / $6.1B ($4.59B Humboldt OSW)—CAISO
CPUC procurement3,300 MW (D.19-11-016); 11,500 MW NQC (D.21-06-035); 4,000 MW NQC (D.23-02-040)—CPUC
Planning reserve margin17% (2024–25); effective ~22.5%; Slice-of-Day from 2025—CPUC
Tax credit transfers2024 ~$30B; ITC 92.5¢; PTC 95.0¢; 2023 $7–9B2024Crux
PPA indexNA solar P25 $56.76/MWh; wind $67.81; CAISO solar +8.2% q/q, +24.7% y/yQ4 2024LevelTen
State RPS progress42.9% RPS-eligible; 67% zero-carbon2023CEC
Load forecastCAISO 1-in-2 peak 46,094 MW (2025) → 52,940 MW (2030); energy 217.7 → 272.0 TWh2025CEC via CAISO
Diablo Canyon2,240 MW; ~10% of state electricity (2024); extended to 2029/2030 under SB 846—PG&E; Governor
Constellation–Calpine$16.4B equity + $12.7B net debt; $26.6B net; 7.9× 2026 EV/EBITDA; ~27 GW; completed Jan 7, 2026Jan 10, 2025Company releases; Form 8-K
Moss Landing fireJan 16, 2025; Moss 300 (300 MW / 1,200 MWh); ~100,000 cells, ~55% damaged; reignition Feb 18; GO 167-C Mar 13, 2025Q1 2025EPA; CPUC
Project cancellations (national)$7.9B / 16 projects in Q1 2025 (>3× the prior 30 months); $14B by April; $22B / 16,500 jobs by June; $34.8B / 38,000 jobs full-year 20252025E2 Clean Economy Works
Safe-harbor and transfer activity2025 deployment peaked in Q1; ~170 GW wind and solar safe-harbored in 2025; H1 2025 transfers >$20B (~2× H1 2024); full-year 2025 transfers ~$42B2025Crux

References

Numbered in order of first citation in the text. Electronic sources were accessed between January and August 2026.