How Alberta’s lithium-laced oil fields can fuel the electric vehicle revolution


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Alberta Lithium Brine can power EV batteries via direct lithium extraction, leveraging oilfield infrastructure and critical minerals policy to build a low-carbon supply chain with clean energy, lower emissions, and domestic manufacturing advantages.

 

Key Points

Alberta lithium brine is subsurface saline water rich in lithium, extracted via DLE to supply EV batteries.

✅ Uses direct lithium extraction from oilfield brines

✅ Leverages Alberta infrastructure and skilled workforce

✅ Supports EV battery supply chain with lower emissions

 

After a most difficult several months, Canadians are cautiously emerging from their COVID-19 isolation and confronting a struggling economy.
There’s a growing consensus that we need to build back better from COVID-19, and to position for the U.S. auto sector’s pivot to electric vehicles as supply chains evolve. Instead of shoring up the old economy as we did following the 2008 financial crisis, we need to make strategic investments today that will prepare Canada for tomorrow’s economy.

Tomorrow’s energy system will look very different from today’s — and that tomorrow is coming quickly. The assets of today’s energy economy can help build and launch the new industries required for a low-carbon future. And few opportunities are more intriguing than the growing lithium market.

The world needs lithium – and Alberta has plenty

It’s estimated that three billion tonnes of metals will be required to generate clean energy by 2050. One of those key metals – lithium, a light, highly conductive metal – is critical to the construction of battery electric vehicles (BEV). As global automobile manufacturers design hundreds of new BEVs, demand for lithium is expected to triple in the next five years alone, a trend sharpened by pandemic-related supply risks for automakers.

Most lithium today originates from either hard rock or salt flats in Australia and South America. Alberta’s oil fields hold abundant deposits of lithium in subsurface brine, but so far it’s been overlooked as industrial waste. With new processing technologies and growing concerns about the security of global supplies, this is set to change. In January, Canada and the U.S. finalized a Joint Action Plan on Critical Minerals to ensure supply security for critical minerals such as lithium and to promote supply chains closer to home, aligning with U.S. efforts to secure EV metals among allies worldwide.

This presents a major opportunity for Canada and Alberta. Lithium brine will be produced much like the oil that came before it. This lithium originates from many of the same reservoirs responsible for driving both Alberta’s economy and the broader transportation fuel sector for decades. The province now has extensive geological data and abundant infrastructure, including roads, power lines, rail and well sites. Most importantly, Alberta has a highly trained workforce. With very little retooling, the province could deliver significant volumes of newly strategic lithium.

Specialized technologies known as direct lithium extraction, or DLE, are being developed to unlock lithium-brine resources like those in Canada. In Alberta, E3 Metals* has formed a development partnership with U.S. lithium heavyweight Livent Corporation to advance and pilot its DLE technology. Prairie Lithium and LiEP Energy formed a joint venture to pilot lithium extraction in Saskatchewan. And Vancouver’s Standard Lithium is already piloting its own DLE process in southern Arkansas, where the geology is very similar to Alberta and Saskatchewan.

Heavy on quality, light on emissions

All lithium produced today has a carbon footprint, most of which can be tied back to energy-intensive processing. The purity of lithium is essential to battery safety and performance, but this comes at a cost when lithium is mined with trucks and shovels and then refined in coal-heavy China.

As automakers look to source more sustainable raw materials, battery recycling will complement responsible extraction, and Alberta’s experience with green technologies such as renewable electricity and carbon capture and storage can make it one of the world’s largest suppliers of zero-carbon lithium.

Beyond raw materials

The rewards would be considerable. E3 Metals’ Alberta project alone could generate annual revenues of US$1.8 billion by 2030, based on projected production and price forecasts. This would create thousands of direct jobs, as initiatives like a lithium-battery workforce initiative expand training, and many more indirectly.

To truly grow this industry, however, Canada needs to move beyond its comfort zone. Rather than produce lithium as yet another raw-commodity export, Canadians should be manufacturing end products, such as batteries, for the electrified economy, with recent EV assembly deals underscoring Canada’s momentum. With nickel and cobalt refining, graphite resources and abundant petrochemical infrastructure already in place, Canada must aim for a larger piece of the supply chain.

By 2030, the global battery market is expected to be worth $116 billion annually. The timing is right to invest in a strategic commodity and grow our manufacturing sector. This is why the Alberta-based Energy Futures Lab has called lithium one of the ‘Five big ideas for Alberta’s economic recovery.’  The assets of today’s energy economy can be used to help build and launch new resource industries like lithium, required for the low-carbon energy system of the future.

Industry needs support

To do this, however, governments will have to step up the way they did a generation ago. In 1975, the Alberta government kick-started oil-sands development by funding the Alberta Oil Sands Technology and Research Authority. AOSTRA developed a technology called SAGD (steam-assisted gravity drainage) that now accounts for 80% of Alberta’s in situ oil-sands production.

Canada’s lithium industry needs similar support. Despite the compelling long-term economics of lithium, some industry investors need help to balance the risks of pioneering such a new industry in Canada. The U.S. government has recognized a similar need, with the Department of Energy’s recent US$30 million earmarked for innovation in critical minerals processing and the California Energy Commission’s recent grants of US$7.8 million for geothermal-related lithium extraction.

To accelerate lithium development in Canada, this kind of leadership is needed. Government-assisted financing could help early-stage lithium-extraction technologies kick-start a whole new industry.

Aspiring lithium producers are also looking for government’s help to repurpose inactive oil and gas wells. The federal government has earmarked $1 billion for cleaning up inactive Alberta oil wells. Allocating a small percentage of that total for repurposing wells could help transform environmental liabilities into valuable clean-energy assets.

The North American lithium-battery supply chain will soon be looking for local sources of supply, and there is room for Canada-U.S. collaboration as companies turn to electric cars, strengthening regional resilience.
 

 

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Wind Leading Power

UK Wind Power Surpasses Gas as offshore wind and solar drive record electricity generation, National Grid milestones, and net zero progress, despite grid capacity bottlenecks, onshore planning reforms, demand from heat pumps and transport electrification.

 

Key Points

A milestone where wind turbines generated more UK electricity than gas, advancing progress toward a net zero grid.

✅ Offshore wind delivered the majority of UK wind generation

✅ Grid connection delays stall billions in green projects

✅ Planning reforms may restart onshore wind development

 

Wind turbines have generated more electricity than gas, as wind becomes the main source for the first time in the UK.

In the first three months of this year a third of the country's electricity came from wind farms, as the UK set a wind generation record that underscored the trend, research from Imperial College London has shown.

National Grid has also confirmed that April saw a record period of solar energy generation, and wind and solar outproduced nuclear in earlier milestones.

By 2035 the UK aims for all of its electricity to have net zero emissions, after a 2019 stall in low-carbon generation highlighted the challenge.

"There are still many hurdles to reaching a completely fossil fuel-free grid, but wind out-supplying gas for the first time is a genuine milestone event," said Iain Staffell, energy researcher at Imperial College and lead author of the report.

The research was commissioned by Drax Electrical Insights, which is funded by Drax energy company.

The majority of the UK's wind power has come from offshore wind farms, and the country leads the G20 for wind's electricity share according to recent analyses. Installing new onshore wind turbines has effectively been banned since 2015 in England.

Under current planning rules, companies can only apply to build onshore wind turbines on land specifically identified for development in the land-use plans drawn up by local councils. Prime Minister Rishi Sunak agreed in December to relax these planning restrictions to speed up development.

Scientists say switching to renewable power is crucial to curb the impacts of climate change, which are already being felt, including in the UK, which last year recorded its hottest year since records began.

Solar and wind have seen significant growth in the UK, with wind surpassing coal in 2016 as a milestone. In the first quarter of 2023, 42% of the UK's electricity came from renewable energy, with 33% coming from fossil fuels like gas and coal.

But BBC research revealed on Thursday that billions of pounds' worth of green energy projects are stuck on hold due to delays with getting connections to the grid, as peak power prices also climbed amid system pressures.

Some new solar and wind sites are waiting up to 10 to 15 years to be connected because of a lack of capacity in the electricity system.

And electricity only accounts for 18% of the UK's total power needs. There are many demands for energy which electricity is not meeting, such as heating our homes, manufacturing and transport.

Currently the majority of UK homes use gas for their heating - the government is seeking to move households away from gas boilers and on to heat pumps which use electricity.

 

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Disrupting Electricity? This Startup Is Digitizing Our Very Analog Electrical System

Solid-State AC Switching reimagines electrification with silicon-based, firmware-driven controls, smart outlets, programmable circuit breakers, AC-DC conversion, and embedded sensors for IoT, energy monitoring, surge protection, and safer, globally compatible devices.

 

Key Points

Solid-state AC switching replaces mechanical switches with silicon chips for intelligent, programmable power control.

✅ Programmable breakers trip faster and add surge and GFCI protection

✅ Shrinks AC-DC conversion, boosting efficiency and device longevity

✅ Enables sensor-rich, IoT-ready outlets with energy monitoring

 

Electricity is a paradox. On the one hand, it powers our most modern clean cars and miracles of computing like your phone and laptop. On the other hand, it’s one of the least updated, despite efforts to build a smarter electricity infrastructure nationwide, and most ready-for-disruption parts of our homes, offices, and factories.

A startup in Silicon Valley plans to change all that, in California’s energy transition where reliability is top of mind, and has just signed deals with leading global electronics manufacturers to make it happen.

“The end point of the electrification infrastructure of every building out there right now is based on old technology,” Thar Casey, CEO of Amber Solutions, told me recently on the TechFirst podcast. “Basically some was invented ... last century and some came in a little bit later on in the fifties and sixties.”

Ultimately, it’s an almost 18th century part of modern homes.

Even smart homes, with add-ons like the Tesla Powerwall, still rely on legacy switching.

The fuses, breakers, light switches, and electrical outlets in your home are ancient technology that would easily understood by Thomas Edison, who was born in 1847. When you flip a switch and instantly flood your room with light, it feels like a modern right. But you are simply pushing a piece of plastic which physically moves one wire to touch another wire. That completes a circuit, electricity flows, and ... let there be light.

Casey wants to change all that. To transform our hard-wired electrical worlds and make them, in a sense, soft wired. And the addressable market is literally tens of billions of devices.

The core innovation is a transition to solid-state switches.

“Take your table, which is a solid piece of wood,” Casey says. “If you can mimic what an electromechanical switch does, opening and closing, inside that table without any actual moving parts, that means you are now solid state AC switching.”

And solid-state is exactly what Silicon Valley is all about.

“Solid state it means it can be silicon,” Casey says. “It can be a chip, it can be smaller, it can be intelligent, you can have firmware, you can add software ... now you have a mini computer.”

That’s a significant innovation with a huge number of implications. It means that the AC to DC converters attached to every appliance you plug into the wall — the big “bricks” that are part of your power cord, for instance — can now be a tiny fraction of the size. Appliance run on DC, direct current, and the electricity in your walls is AC, alternating current; similar principles underpin advanced smart inverters in solar systems, and it needs to be converted before it’s usable, and that chunk of hardware, with electrolytics, magnetics, transformers and more, can now be replaced, saving space in thermostats, CO2 sensors, coffee machines, hair dryers, smoke detectors ... any small electric device.

(Since those components generally fail before the device does, replacing them is a double win.)

Going solid state also means that you can have dynamic input range: 45 volts all the way up to 600 volts.

So you can standardize one component across many different electric devices, and it’ll work in the U.S., it’ll work in Europe, it’ll work in Japan, and it will work whether it’s getting 100 or 120 or 220 volts.

Building it small and building it solid state has other benefits as well, Casey says, including a much better circuit breaker for power spikes as the U.S. grid faces climate change impacts today.

“This circuit breaker is programmable, it has intelligence, it has WiFi, it has Bluetooth, it has energy monitoring metering, it has surge protection, it has GFCI, and here’s the best part: we trip 3000 times faster than a mechanical circuit breaker.”

What that means is much more ambient intelligence that can be applied all throughout your home. Rather than one CO2 sensor in one location, every power outlet is now a CO2 sensor that can feed virtual power plant programs, too. And a particulate matter sensor and temperature sensor and dampness sensor and ... you name it.

Amber’s next-generation system-on-chip complete replacement for smart outlets
Amber’s next-generation system-on-chip complete replacement for smart outlets JOHN KOETSIER
“We put as many as fifteen functions ... in one single gang box in a wall,” Casey told me.

Solid state is the gift that keeps giving, because now every outlet can be surge-protected. Every outlet can have GFCI — ground fault circuit interruption — not just the ones in your bathroom. And every outlet and light switch in your home can participate in the sensor network that powers your home security system. Oh, and, if you want, Alexa or Siri or the Google Assistant too. Plus energy-efficient dimmers for all lighting appliances that don’t buzz.

So when can you buy Amber switches and outlets?

In a sense, never.

Casey says Amber isn’t trying to be a consumer-facing company and won’t bring these innovations to market themselves. This July, Amber announced a letter of intent with a global manufacturer that includes revenue, plus MOUs with six other major electronics manufacturers. Letters of intent can be a dime a dozen, as can memoranda of understanding, but attaching revenue makes it more serious and significant.

The company has only raised $6.7 million, according to Craft, and has a number of competitors, such as Blixt, which has funding from the European Union, and Atom Power, which is already shipping technology. But since Amber is not trying to be a consumer product and take its innovations to market itself, it needs much less cash to build a brand and a market. You’ll be able to buy Amber’s technology at some point; just not under the Amber name.

“We have over 25 companies that we’re in discussions with,” Casey says. “We’re going to give them a complete solution and back them up and support them toward success. Their success will be our success at the end of the day.”

Ultimately, of course, cost will be a big part of the discussion.

There are literally tens of billions of switches and outlets on the planet, and modernizing all of them won’t happen overnight. And if it’s expensive, it won’t happen quickly either, even as California turns to grid-scale batteries to ease strain.

Casey is a big cagey with costs — there are still a lot of variables, after all. But it seems it won’t cost that much more than current technology.

“This can’t be $1.50 to manufacture, at least not right now, maybe down the road,” he told me. “We’re very competitive, we feel very good. We’re talking to these partners. They recognize that what we’re bringing, it’s a cost that is cost effective.”

 

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Norway Considers Curbing Electricity Exports to Avoid Shortages

Norway Electricity Export Limits weigh hydro reservoirs, energy security, EU-UK interconnectors, and record power prices amid Russia gas cuts; Statnett grid constraints and subsidies debate intensify as reservoir levels fall, threatening winter supply.

 

Key Points

Rules to curb Norway's power exports when reservoirs are very low, protecting supply security and easing extreme prices.

✅ Triggered by low hydro levels and record day-ahead prices

✅ Considers EU/UK cables, Statnett operations, seasonal thresholds

✅ Aims to secure winter supply and expand subsidies

 

Norway, one of Europe’s biggest electricity exporters, is considering measures to limit power shipments to prevent domestic shortages amid surging prices, according to local media reports.

The government may propose a rule to limit exports if the water level for Norway’s hydro reservoirs drops to “very low” levels, to ensure security of supply, said Energy Minister Terje Aasland, according NTB newswire. The limit would take account of seasonality and would differ across the about 1,800 hydro reservoirs, he said. 

Russia’s gas supply cuts in retaliation for European sanctions over the war in Ukraine have triggered the continent’s worst energy crisis in decades, with demand surging for cheap Norwegian hydro electricity. Yet the government faces increasing calls from the public and opposition to limit flows abroad. Prices are near record levels in some parts of the Nordic nation as hydro-reservoir levels have plunged in the south after a drier-than-normal spring. 

The government has been under pressure to do something about exports since before April. Flows on the cables are regulated by deals with both the European Union and the UK energy market and Norway can’t simply cut flows. It’s the latest test of European solidarity and a wake-up call for Europe when it comes to energy supplies. Hungary is trying to ban energy exports after it declared an energy emergency.

Back in May, grid operator Statnett SF warned that Norway could face a strained power situation after less snowfall than usual during the winter. At the end of last week, the level of filling in Norwegian hydro reservoirs was 66.5%, compared with a median 74.9% for the corresponding time in 2002-2021, regulator NVE said. Day-ahead electricity prices in southwest Norway soared to a record 423 euros per megawatt-hour late last month, partly due to bottlenecks in the grid limiting supply from the northern regions.

The grid operator has been asked to present by Oct. 1 possible measures that need to be taken to secure supply and infrastructure security ahead of the winter. Statnett operates cables to the UK and Germany aimed at selling surplus electricity and would likely take a financial hit if curbs were introduced. “Operations of these will always follow current laws and regulations,” Irene Meldal, a company spokeswoman, said Friday by email. 

Premier Jonas Gahr Store signaled his minority government will file proposals that also include more subsidies to families and companies and align with Europe’s emergency price measures during August, according to an interview with TV2 on Thursday. Meanwhile, opposition politicians plan to hold an extraordinary parliament meeting to discuss boosting the subsidies.

Aasland will summon the parties’ representatives to a meeting on Monday on the electricity crisis, the Aftenposten newspaper reported on Friday, without citing anyone. He intends to inform the parties about the ongoing work and aims to “avoid rushed decisions” by the parliamentary majority.

Norway Faces Pressure to Curb Power Exports as Prices Surge (1)

The nation gets almost all of its electricity from its vast hydro resources. Historically, it has been able to export a hefty surplus and still have among the lowest prices in Europe. 
 

 

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Key Ontario power system staff may end up locked down at work sites due to COVID-19, operator says

Ontario IESO COVID-19 Control Room Measures detail how essential operators safeguard the electricity grid with split shifts, backup control centres, real-time balancing, deep cleaning, social distancing, and shelter-in-place readiness to maintain reliable power.

 

Key Points

Measures that protect essential grid operators with split shifts, backup sites, and hygiene to keep power reliable.

✅ Split teams across primary and backup control centres

✅ 12-hour shifts with remote handoffs and deep cleaning

✅ Real-time grid modeling to balance demand and supply

 

A group of personnel key to keeping Ontario's electricity system functioning may end up locked down in their control centres due to the COVID-19 crisis, according to the head of the province's power operator.

But that has so far proven unnecessary with a change-up in routine, Independent Electricity System Operator CEO Peter Gregg said.

While about 90 per cent of staff were sent to work from home on March 13, another 48 control-room operators deemed essential are still going into work, Gregg said in an interview.

"We identified a smaller cohort of critical operations room staff that need to go in to operate the system out of our control centres," Gregg said. "My biggest concern is to maintain their health, their safety as we rely on them to do this critical work."

Some of the operators manage power demand and supply in real time as Ontario electricity demand shifts, by calling for more or less generation and keeping an eye on the distribution grid, which also allows power to flow to and from Ontario's neighbours. Others do scenario planning and modelling to prepare for changes.

The essential operators have been split into eight teams of six each working 12-hour shifts. The day crew works out of a control centre near Toronto and the night shift out of a backup centre in the city's west end, Gregg said.

"That means that we're not having physical hand-off between control room operators on shift change -- we can do it remotely -- and it also allows us to do deep cleansing," Gregg said. "We're fortunate that the way the room is set up allows us to practice good social distancing."

Should it become necessary, he said, bed, food and other on-site arrangements have been made to allow the operators to stay at their workplaces as a similar agency in New York has done.

"If we do need to shelter these critical employees in place, we've got the ability to do so."

IESO is responsible for ensuring a balance between supply and demand for electricity across the province. Because power cannot be stored, the IESO ensures generators produce enough power to meet peak demand while making sure they don't produce too much.

"You're seeing, obviously, commercial demand drop, some industrial demand drop," Gregg said. "But you're also seeing a shift in the demand curve as well, where normally you have people heading off to work and so residential demand would go down. But obviously with them staying home, you're seeing an increase in residential electricity use across the province."

Some utilities have indicated no cuts to peak rates for self-isolating customers, with Hydro One peak pricing remaining in place for now.

IESO also runs and settles the wholesale electricity markets. Market prices are set based on accepted offers to supply electricity, while programs supporting stable electricity pricing for industrial and commercial users can affect costs against forecast demand.

With the pandemic forcing many businesses to close and people to stay home, and provincial electricity relief for families and small businesses in place, typical power needs fallen about seven per cent at a time of year that would normally see demand soften anyway. It remains to be seen whether, and how much, power needs shift further amid stringent isolation measures and the ongoing economic impact of the outbreak.

Gregg said the operator is constantly modeling different possibilities.

"What we do normally is prepare for all of these sort of emergency scenarios, as reflected in the U.S. grid response coverage, and test and drill for these," he said. "What we're experiencing over the last few weeks is that those drills come in handy because they help us prepare for when the real-time situation actually happens."

 

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Texas produces and consumes the most electricity in the US

Texas ERCOT Power Grid leads U.S. wind generation yet faces isolated interconnection, FERC exemption, and high industrial energy use, with distinct electricity and natural gas prices managed by a single balancing authority.

 

Key Points

The state-run interconnection that balances Texas electricity, isolated from FERC oversight and other U.S. grids.

✅ Largest U.S. wind power producer, high industrial demand

✅ Operates one balancing authority, independent interconnection

✅ Pays lower electricity, higher natural gas vs national average

 

For nearly two decades, the Lone Star State has generated more wind-sourced electricity than any other state in the U.S., according to the Energy Information Administration, or EIA.

In 2022, EIA reported Texas produced more electricity than any other state and generated twice as much as second-place Florida.

However, Texas also leads the country in another category. According to EIA, Texas is the largest energy-consuming state in the nation across all sectors with more than half of the state’s energy being used by the industrial sector.

As of May 2023, Texas residents paid 43% more for natural gas and around 10% less for electricity compared to the national average, according to EIA, and in competitive areas shopping for electricity is getting cheaper as well. Commercial and industrial sectors on average for the same month paid 25% less for electricity compared to the national average.


U.S. electric system compared to Texas
The U.S. electric system is essentially split into three regions called interconnections and are managed by a total of 74 entities called balancing authorities that ensure that power supply and demand are balanced throughout the region to prevent the possibility of blackouts, according to EIA.

The three regions (Interconnections):

Eastern Interconnection: Covers all U.S. states east of the Rocky Mountains, a portion of northern Texas, and consists of 36 balancing authorities.
Western Interconnection: Covers all U.S. states west of the Rockies and consists of 37 balancing authorities.
ERCOT: Covers the majority of Texas and consists of one balancing authority (itself).

During the 2021 winter storm, Texas electric cooperatives were credited with helping maintain service in many communities.

“ERCOT is unique in that the balancing authority, interconnection, and the regional transmission organization are all the same entity and physical system,” according to EIA, a structure often discussed in analyses of Texas power grid challenges today.

With this being the case, Texas is the only state in the U.S. that balances itself, the only state that is not subject to the jurisdiction of the Federal Energy Regulatory Commission, or FERC, and the only state that is not synchronously interconnected to the grid in the rest of the United States in the event of tight grid conditions, highlighting ongoing discussions about improving Texas grid reliability before peak seasons, according to EIA.

Every other state in the U.S. is connected to a web of multiple balancing authorities that contribute to ensuring power supply and demand are met.

California, for example, was the fourth largest electricity producer and the third largest electricity consumer in the nation in 2022, according to EIA, and California imports the most electricity from other states while Pennsylvania exports the most.

Although California produces significantly less electricity than Texas, it has the ability to connect with more than 10 neighboring balancing authorities within the Western Interconnection to interchange electricity, a dynamic that can see clean states importing dirty electricity under certain market conditions. ERCOT being independent only has electricity interchange with two balancing authorities, one of which is in Mexico.

Regardless of Texas’ unique power structure compared to the rest of the nation, the vast majority of the U.S. risked electricity supplies during this summer’s high heat, as outlined in severe heat blackout risks reports, according to EIA.

 

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Newsom Vetoes Bill to Codify Load Flexibility

California Governor Gavin Newsom vetoed a bill aimed at expanding load flexibility in state grid planning, citing conflicts with California’s resource adequacy framework and concerns over grid reliability and energy planning uncertainty.

 

Why has Newsom vetoed the Bill to Codify Load Flexibility?

Governor Gavin Newsom’s veto blocks legislation that would have required the California Energy Commission to incorporate load flexibility into the state’s energy planning and policy framework, a move that has stirred debate across the clean energy sector.

✅ Argues the bill conflicts with California’s existing Resource Adequacy system

✅ Draws backlash from clean energy and grid modernization advocates

✅ Exposes ongoing tension over how to manage renewable integration and demand response

 

California Governor Gavin Newsom has vetoed Assembly Bill 44, which would have required the California Energy Commission to evaluate and incorporate load management mechanisms into the state’s energy planning process. The move drew criticism from clean energy advocates who say it undermines efforts to strengthen grid reliability and reduce costs.

The bill directed the commission to adopt “upfront technical requirements and load modification protocols” that would allow load-serving entities to adjust their electrical demand forecasts. Proponents viewed this as a way to modernize California’s grid management, and to explore a revamp of electricity rates to help clean the grid, making it more responsive to demand fluctuations and renewable energy variability.

In his veto statement, Newsom said the bill was incompatible with existing energy planning frameworks, even as a looming electricity shortage remains a concern. “While I support expanding electric load flexibility, this bill does not align with the California Public Utility Commission’s Resource Adequacy framework,” he said. “As a result, the requirements of this bill would not improve electric grid reliability planning and could create uncertainty around energy resource planning and procurement processes.”

Newsom’s decision comes shortly after he signed a broad package of energy legislation that set the stage for a regional Western electricity market and extended the state’s cap-and-trade program. However, that legislative package did not include continued funding for several key grid reliability programs — including what advocates have called the world’s largest virtual power plant, a distributed network of connected devices that can balance electricity demand in real time.

Clean energy supporters saw AB 44 as a crucial step toward integrating these distributed energy resources into long-term grid planning. “With Assembly Bill 44 being vetoed, the state has missed a huge opportunity to advance common-sense policy that would have lowered costs, strengthened the grid, and unlocked the full potential of advanced energy,” said Edson Perez, California lead at Advanced Energy United.

Perez added that the setback increases pressure on lawmakers to take stronger action in the next legislative session. “The pressure is on next session to ensure that California is using all tools in its policy toolbox to build critically needed infrastructure, strengthen the grid, and bring costs down,” he said.

California’s growing use of demand response programs and virtual power plants has been central to its strategy for managing grid stress during heat waves and wildfire seasons. These systems allow utilities and customers to temporarily reduce or shift energy use, helping to prevent blackouts and reduce the need for fossil-fuel peaker plants during peak demand.

A recent report by the Brattle Group found that California’s taxpayer-funded virtual power plant could save ratepayers $206 million between 2025 and 2028 while reducing reliance on gas generation. The study, commissioned by Sunrun and Tesla Energy, highlighted the potential for flexible load management to improve both grid reliability and reduce costs, even as regulators weigh whether the state needs more power plants to ensure reliability.

Despite these findings, Newsom’s veto signals continued tension between state policymakers and clean energy advocates over how best to modernize California’s power grid. While the governor has prioritized large-scale renewable development and regional market integration, critics argue that California’s climate policy choices risk exacerbating reliability challenges and that failing to codify load flexibility could slow progress toward a more adaptive, resilient, and affordable clean energy future.

 

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