California has no shortage of clean-energy ambition. Under SB 100, the state must serve 60% of retail electricity sales from renewables by 2030 and reach 100% clean electricity by 2045; SB 1020 later filled the gap in between with binding interim benchmarks of 90% clean by 2035 and 95% by 2040. The targets are settled law. The harder question is how the grid actually gets built — and specifically, who buys the resources that don't get built on their own.
That last part is the problem Assembly Bill 1373, signed in 2023 as part of Governor Newsom's clean-energy and grid-reliability package, was written to solve. Most of California's renewable build-out happens through individual load-serving entities — utilities and community choice aggregators — each signing its own contracts. That works well for solar and short-duration batteries, which are fast to build and easy to finance. It works poorly for the big, slow, capital-intensive resources the 2045 grid will need: offshore wind, geothermal, and multi-hour and multi-day storage. AB 1373 creates a central buyer for exactly those resources.
In this paper
01The problem AB 1373 solves
Imagine you are a single community choice aggregator serving a few hundred thousand customers. You can comfortably sign a 20-year contract for a solar-plus-storage project — it's a known quantity, it comes online in a couple of years, and if your load forecast shifts, the contract is a manageable share of your portfolio. Now imagine signing a contract for a slice of an offshore wind farm that won't generate a megawatt until the 2030s, costs billions, and depends on port infrastructure and transmission that don't exist yet. For most individual buyers, that risk is simply too large to carry alone.
The result is a classic coordination failure. Everyone agrees the state needs offshore wind, deep geothermal, and long-duration storage to hit 100% clean. No single buyer has the balance sheet or the time horizon to anchor them. So they don't get built — not because they aren't needed, but because the buying is fragmented. AB 1373 addresses the fragmentation directly: it authorizes a central entity to aggregate the state's demand for these resources and procure them on everyone's behalf.
Solar and short batteries get built because they're easy to buy. The 2045 grid also needs resources that are hard to buy — and AB 1373 is, at its core, a fix for the buying problem.
02How centralized procurement works
AB 1373 gives the California Public Utilities Commission authority to designate a central procurement entity, and the Department of Water Resources (DWR) has been tapped to run the solicitations for these long lead-time resources. The mechanism works in stages. First, the CPUC issues a need determination — a decision specifying how much of which resource types should be centrally procured, and by when. DWR then runs competitive solicitations, evaluates bids, and — if costs are found reasonable and contracts are approved — signs the agreements. The costs are ultimately spread across load-serving entities (and their customers) in proportion to their share of statewide demand.
The point of routing this through a single buyer is twofold. It pools the risk that no individual utility wants to shoulder, and it gives developers something they badly need to finance a multi-billion-dollar, decade-long project: a creditworthy, long-term offtaker willing to commit before the project is shovel-ready. For the kinds of resources on the list, that early, durable commitment is often the difference between a project that gets financed and one that stays on paper.
03What the CPUC has authorized
In its August 2024 need determination, the CPUC authorized centralized procurement of up to 10.6 GW of clean capacity across four resource types — the first concrete test of the AB 1373 mechanism.
| Resource | Max authorized | What it provides |
|---|---|---|
| Offshore wind | 7.6 GW | Large, steady output that peaks in evenings and winter — complementary to solar |
| Geothermal | 1 GW | Around-the-clock firm clean baseload |
| Long-duration storage (12 hr+) | 1 GW | Shifts clean energy deep into the night, past the reach of 4-hour batteries |
| Multi-day long-duration storage | 1 GW | Bridges multi-day lulls in wind and solar |
Two things stand out. First, the heavy weighting toward offshore wind — more than seven of the ten-plus gigawatts — reflects how central that resource is to the state's long-term plan, and how far it is from being buildable without a committed buyer. Second, two of the four categories are long-duration storage, including a multi-day tier. That is a clear signal about where regulators see the grid's reliability gap heading: not toward more of the four-hour batteries that already crowd the evening peak, but toward storage that can move clean energy across far longer stretches of time.
04Why these four resources
The list isn't arbitrary. Each resource does something solar and short-duration storage cannot. Offshore wind tends to blow hardest in the evening and through the winter — precisely when solar fades and demand holds, making it a natural complement rather than a competitor to the state's enormous solar fleet. Geothermal runs around the clock, supplying the firm, weather-independent clean baseload that a high-renewables grid still needs underneath it. And the two storage tiers extend the grid's reach in time: 12-hour-plus systems push clean energy deep into the night, while multi-day storage insures against the stretches when both wind and solar go quiet for days.
What unites them is that they are all long lead-time resources — slow to permit, slow to build, and expensive enough that they need an anchor offtaker to get financed. They are also exactly the resources a fragmented market underbuilds. Centralized procurement is the tool matched to that specific failure.
The authorized mix is a statement of intent: California is buying complementarity and duration, not just more megawatts of the cheapest thing.
05What it means for developers
For developers of firm and long-duration clean resources, AB 1373 changes the financing picture in a structural way. A central buyer with statewide demand behind it is the kind of creditworthy, long-horizon counterparty that makes capital-intensive projects bankable — the same logic that makes contracted, infrastructure-style projects attractive to long-term investors in the first place. It also sharpens the signal about what the state actually wants: complementary generation and real duration, not simply the lowest-cost solar megawatt.
It does not, of course, change physics or supply chains. Offshore wind still needs ports and transmission; long-duration storage still needs to prove its cost and performance at scale. And the authorized quantities are ceilings, not guarantees — they depend on bids coming in at reasonable cost and contracts winning approval. But the direction is unambiguous. California has decided that hitting 100% clean by 2045 requires deliberately buying the resources the market won't build on its own, and it has built the mechanism to do it.
At Solyx, we read AB 1373 as confirmation of a thesis we've been building around: the next phase of the clean-energy transition is about firmness and duration — clean power available across the full day and the full year — not just adding nameplate capacity. That's the grid the policy is pointing toward, and it's the grid our hybrid systems are designed to serve.
What it means for Solyx
AB 1373 validates the part of the market we build for: firm, long-duration clean energy. By creating a central buyer for offshore wind, geothermal, and 12-hour-plus and multi-day storage, California is putting policy weight behind complementarity and duration — the same qualities our solar-plus-storage-plus-firm campuses are engineered to deliver. We watch this procurement closely because it maps the state's reliability needs a decade out.