A new report from California regulators and utilities puts a $15.7 billion price tag on the new transmission lines needed to meet the state's goal of getting one-third of its electricity from renewable sources in the next decade.

But the report notes that distributed generation – mostly rooftop solar panels – could take a bite out of those costs if it can compete economically with larger-scale wind, solar-thermal and geothermal power projects.

The Renewable Energy Transmission Initiative's latest update comes as little surprise, given that the California Public Utilities Commission said in June that it would cost about $12 billion for new transmission to meet California's proposed 33 percent renewable portfolio standard (see California Dreaming: Achieving 33% RPS Could Cost $12B in New Transmission).

The state already requires its major utilities to deliver 20 percent renewable energy by next year. State lawmakers are considering boosting that to 33 percent by 2020.

But that will require a whole new set of transmission lines, marching north and south along the state's Central Valley and east and west across its mountain ranges and deserts, according to a map of proposed routes given in the report.

And the report doesn't make more specific recommendations for precisely where the lines should go – a nod to the political challenges that come with siting new transmission lines.

The Sunrise Powerlink, a transmission line meant to link San Diego to planned solar thermal plants in California's southeast desert, was approved by regulators in December (see California OKs Controversial Transmission Project), but opponents are appealing the decision to the state's supreme court, the San Diego Union-Tribune reports

And another big transmission project planned for California's Central Valley was canceled last month by the Transmission Agency of Northern California, after some utilities backed out in the face of vocal opposition from environmental groups and landowners.

California faces in microcosm the challenge facing the country as a whole as it seeks to get more power from solar, wind, geothermal and other renewable sources.

This would most likely require carrying lots of power from where it's most efficiently generated – by wind turbines in the Midwest or solar-thermal power plants in the Southwest, for example – over long distances to population centers that need it (see Wind Growth Could Cost Eastern U.S. $80B in Transmission Lines).

ITC Holdings is proposing a $10 billion to $12 billion "Green Power Express" transmission project crisscrossing the upper Midwest to link future wind farms to the grid, and similar, if smaller, projects are underway elsewhere (see Duke, AEP to Spend $1B on New Transmission Lines and Texas Approves $5B Worth of Transmission Line Projects).

Congress may give the Federal Energy Regulatory Commission more authority in siting interstate transmission lines, if efforts by Senate Majority Leader Harry Reid (D-Nev.) to include that authority in a broader energy and climate bill are successful (see Draft Legislation a Boon for Solar, Smart Grid and Wall Street Journal article).

Then again, some of those lines might not be necessary if enough homes and businesses put solar panels on their roofs – and utilities are able to integrate that power smoothly into the grid.

That scenario is laid out by CPUC's June report, along with a neutral reference scenario for reaching the 33 percent renewable goal, as well as alternatives that presume a higher share of wind power and a higher share of out-of-state resources.

Going for more distributed power, mostly rooftop solar but also small-scale wind and geothermal power, would reduce the need for long-range transmission, the report found. But it would also cost a lot more – about $58 billion in total statewide electricity spending by 2020, or an added 18.1 cents per kilowatt-hour in average electricity costs.

That's compared to $54.2 billion (16.9 cents per kilowatt-hour) for the reference case, or $52.7 billion for the high wind scenario and $52.5 billion for the out-of-state power scenario (both 16.4 cents per kilowatt-hour). Solar-thermal power plants generate power more cheaply than photovoltaic panels, and wind and geothermal power are cheaper still, the report noted.

But then, just sticking to a 20 percent renewable energy goal by 2020 would cost California $50.6 billion (15.8 cents per kilowatt-hour) in new electricity spending, the report found – an indication that renewable energy integration is just one of many challenges facing the state's power grid.

As for going big into rooftop solar and other distributed renewable power, "less is known about the feasibility of this case, including the willingness of building owners to rent their rooftops, impacts on grid reliability, effectiveness of utility programs and other delivery channels, and whether both manufacturing capacity and a trained workforce will be available to meet this large increase in demand," the CPUC report stated.

This week's report from RETI did give some benchmarks for how far along the state's biggest utilities are in reaching a 33 percent renewable portfolio standard by 2020.

Pacific Gas & Electric sold 9.8 gigawatts of renewable power in 2008, and would have to add 21.1 gigawatts by 2020 to meet the report's projected goals for the utility.

Southern California Edison sold 12.6 gigawatts in 2008, and needs 20.1 gigawatts more for its 2020 renewable goals, the report showed. And San Diego Gas & Electric sold 1 gigawatt of renewables in 2008, which is short 5.9 gigawatts of its projected 2020 goal.

All in all, the state's utilities are short a collective 68.9 gigawatts of the projected share of the proposed 33-percent renewable power by 2020 mandate they'd be asked to shoulder.

Interact with smart grid industry visionaries from North American utilities, innovative hardware and software vendors and leading industry consortiums at The Networked Grid on November 4 in San Francisco.