Powering the Golden State into the Future
It’s no secret the world, and especially California, requires more and more energy to power our businesses, communities and everyday lives. And with population growth and the increasing demand from AI and other technological innovations, that need is only going to continue trending up over the coming years. Long story short: the energy infrastructure we have in place today can’t keep pace with the demands of the future.
How government, utilities and energy companies are preparing for this surge in demand will shape how well we are able to effectively navigate the need for more and more energy. Energy is largely seen as a local issue (usually accompanied with local challenges). But the broader energy conundrum isn’t just happening in our backyards. On a global scale, energy demand of all types continues to surge:
Global energy demand rose by 2.2% (IEA) in 2024 – which may not seem like a lot, but is huge on a global scale.
Natural gas demand rose by 2.7%, with oil demand rising by 0.8%, reminding us that the world is still largely powered by fossil fuels.
The amount of new renewable power capacity installed worldwide rose to around 700 gigawatts, setting a new annual record for the 22nd consecutive year, but still is not meeting growing energy demands.
And here in California, we lead the nation and the globe in clean energy policy, but we are also home to high-powered industries and the nation’s largest population that keep demand high and ever-growing. Recent data reminds us that this issue will be a critical one for decades to come. Let’s take a look at the state of California’s energy footprint:
California is the second-largest total energy consumer among states, the nation’s third-largest electricity consumer and imports more electricity than any other state (US EIA). That means we require a lot of energy to function successfully.
California's non-CO2 emitting electric generation categories (nuclear, large hydroelectric, and renewables) accounted for 58 percent of total generation in 2024, up from 54 percent the year prior (CEC), with natural gas owning the remaining percentage. That’s solid advancement but still leaves a lot of progress needed to meet the state’s aggressive climate goals.
In 2023 data centers, which power technology company operations and AI, accounted for 2.6% of the state’s total energy demand. This number is predicted to triple in the next three years and continue to grow at a rapid rate – accounting for more than 1/10th of the state’s energy consumption by the end of the decade (CalCCA).
Aside from being a lot to take in, what does this all mean?
Small percentages may not seem like a big deal, but when we think about how much energy we consume today, the growing demand is worrisome to say the least. But the good news is several companies, governments and NGOs are laying the groundwork for a sustainable energy future. Balancing the rising cost of clean energy policy vs energy needs has become a real concern that needs to be thoughtfully addressed. And it is, often by the incredible work our clients are leading.
The Calkin PA team is working closely with companies that are pioneering sustainable energy solutions that are also cost effective. Solutions that will truly help us get to where we need to be. Shaping the narrative around energy policy across the state has allowed our clients to achieve successful policy, regulatory and political outcomes, often against tough odds.
Balancing progress toward sustainability goals, while managing the skyrocketing costs of energy production, affects every day Californians and businesses alike. It’s a daunting task, but progress is happening. Something I do know is this: California can't meet its aggressive climate and energy goals without the work our clients do, and the work our team supports and partners with them on. That’s something that besides making me proud, makes me feel confident we will navigate this energy future successfully.
We will be following local, statewide and national energy policy and data closely to share more insights in the future. Stay tuned for updates in the energy space, and to hear about amazing innovations that will help us reach our collective energy goals.