Replacing a Polluting Plant in Oakland with Clean Energy

PG&E’s plans to replace the Dynegy power plant with clean energy solutions that empower the local community were approved by the California Independent System Operator (CAISO) on March 22nd. This PG&E project illustrates that dirty old power plants can be replaced with environmentally sound, customer friendly resources without compromising the reliability of the electric grid.

The Dynegy power plant, located near historic Jack London Square in Oakland, is adjacent to communities with some of the worst pollution per the California Environment Protection Agency. The jet fuel fired power plant is almost 40 years old and due to be retired in the summer of 2022. This planned retirement had been identified by the CAISO as a long-term local reliability concern.

Map of Oakland Showing Approximate Plant Location and Level of Pollution Developed

Image created using CalEnviroScreen 3.0 (

The Dynegy plant, under a Reliability-Must-Run contract, provides up to 40 MW for approximately 10 hours every day. Standard procedure would require PG&E to either re-power the power plant with new gas turbines or install high-power transmission lines through downtown Oakland. A new gas turbine would continue to pollute the local communities; adding additional transmission would mean an expensive and inconvenient multi-year effort that would require digging through downtown Oakland.

Instead, PG&E decided to implement the Oakland Clean Energy Initiative (OCEI) which will utilize distributed energy resources (such as energy efficiency, rooftop solar panels, and other demand side solutions) to replace the departing power plant. PG&E will commence on a request-for-offers process this spring to invite distributed energy resource providers to propose innovative and cost-efficient solutions.

NRDC has long advocated that distributed energy resources are a cost-efficient alternative to building power plants while reducing air pollution. The OCEI is illustrative of this. This initiative will improve Oakland air quality, save Oakland residents money on their utility bills, and create jobs for the local labor force. NRDC looks forward to working with PG&E to successfully implement this initiative.

About the Authors

Mohit Chhabra

Senior Scientist, Climate & Clean Energy Program

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