PG&E secures a $15 billion loan to modernize California’s energy grid

The U.S. Department of Energy grants Pacific Gas and Electric a loan to modernize infrastructure, integrate more renewables, and improve grid reliability.

Share:

The modernization of energy infrastructure has become a strategic priority for the United States. The U.S. Department of Energy (DOE) recently finalized a $15 billion loan for Pacific Gas and Electric (PG&E) to finance a series of innovative projects in California. This financing, granted through the Loan Programs Office (LPO), is part of the Biden-Harris Administration’s ambitious “Investing in America” agenda.

This loan covers a series of projects aimed at strengthening hydropower production, increasing battery energy storage capacity, improving transmission systems, and implementing virtual power plants (VPP). These initiatives are designed to meet the needs of the 16 million customers served by PG&E, increasing grid reliability while reducing energy costs.

Improving hydropower capacities

PG&E plans to refurbish its hydropower facilities, which include 61 plants capable of generating over 3.8 gigawatts (GW) of clean energy. This capacity is sufficient to power approximately four million households. These investments are also expected to stabilize renewable energy sources in California, particularly during peak demand periods.

Expanding battery storage

Energy storage is a central element of this modernization. PG&E has already contracted 4.2 GW of capacity for its battery projects, enabling the optimization of renewable energy integration. These capabilities also aim to increase grid resilience against extreme weather events.

Modernizing transmission systems

The allocated funds include works such as reconductoring power lines, expanding substations, and deploying advanced sensors. These improvements will help anticipate outages and maintain operational continuity, even under unpredictable weather conditions.

Virtual power plants (VPP)

Virtual power plants represent a major innovation. These systems enable bidirectional power flow by integrating small-scale energy production and storage devices, such as home batteries or electric vehicles. PG&E already operates 400 megawatts (MW) of VPP capacity through various customer programs.

Economic and social impact

Beyond energy impacts, these projects will create approximately 3,900 jobs in construction and operations. A portion of the funds is also dedicated to a Community Benefits Plan (CBP) and the expansion of the PowerPathway program. This initiative, developed in partnership with the International Brotherhood of Electrical Workers (IBEW) Local 1245, aims to provide training and professional opportunities for underrepresented groups.

A strengthened commitment

PG&E’s initial loan application, submitted in mid-2023, underscores the strategic importance of these investments. By leveraging the DOE’s financing program, PG&E demonstrates its commitment to adopting a resilient and sustainable energy infrastructure capable of meeting California’s future needs.

Nearly USD92bn will be invested by major American and international groups in new data centres and energy infrastructure, responding to the surge in electricity demand linked to the rise of artificial intelligence.
Nouakchott has endured lengthy power interruptions for several weeks, highlighting the financial and technical limits of the Mauritanian Electricity Company as Mauritania aims to widen access and green its mix by 2030.
Between 2015 and 2024, four multilateral climate funds committed nearly eight bn USD to clean energy, attracting private capital through concessional terms while Africa and Asia absorbed more than half of the volume.
The Global Energy Policies Hub shows that strategic reserves, gas obligations, cybersecurity and critical-mineral policies are expanding rapidly, lifting oil coverage to 98 % of world imports.
According to a report by Ember, the Chinese government’s appliance trade-in campaign could double residential air-conditioner efficiency gains in 2025 and trim up to USD943mn from household electricity spending this year.
Washington is examining sectoral taxes on polysilicon and drones, two supply chains dominated by China, after triggering Section 232 to measure industrial dependency risks.
The 2025-2034 development plan presented by Terna includes strengthening Sicily’s grid, new interconnections, and major projects to support the region’s growing renewable energy capacity.
Terna and NPC Ukrenergo have concluded a three-year partnership in Rome aimed at strengthening the integration of the Ukrainian grid into the pan-European system, with an in-depth exchange of technological and regulatory expertise.
GE Vernova has secured a major contract to modernise the Kühmoos substation in Germany, enhancing grid reliability and integration capacity for power flows between Germany, France and Switzerland.
The National Energy System Operator forecasts electricity demand to rise to 785 TWh by 2050, underlining the need to modernise grids and integrate more clean energy to support the UK’s energy transition.
Terna has signed a guarantee agreement with SACE and the European Investment Bank to finance the Adriatic Link project, totalling approximately €1bn ($1.08bn) and validated as a major transaction under Italian regulations.
India unveils a series of reforms on oil and gas contracts, introducing a fiscal stability clause to enhance the sector’s attractiveness for foreign companies and boost its growth ambitions in upstream energy.
The European Commission is launching a special fund of EUR2.3bn ($2.5bn) to boost Ukraine’s reconstruction and attract private capital to the energy and infrastructure sectors.
Asia dominated global new renewable energy capacity in 2024 with 71% of installations, while Africa recorded limited growth of only 7.2%, according to the latest annual report from IRENA.
US President Donald Trump's One Big Beautiful Bill Act dramatically changes energy investment rules, imposing restrictions on renewables while favouring hydrocarbons, according to a recent report by consultancy firm Wood Mackenzie.
On July 8, 2025, the Senate validated the Gremillet bill, aimed at structuring France's energy transition with clear objectives for nuclear power, renewable energies, and energy renovation.
Brazil, Mexico, Argentina, Colombia, Chile, and Peru significantly increase renewable electricity production, reaching nearly 70% of the regional electricity mix, according to a recent Wood Mackenzie study on Latin America's energy sector.
The Canadian government announces an investment of more than $40mn to fund 13 energy projects led by Indigenous communities across the country, aiming to improve energy efficiency and increase local renewable energy use.
The German Ministry of Economy plans to significantly expand aid aimed at reducing industrial electricity costs, increasing eligible companies from 350 to 2,200, at an estimated cost of €4bn ($4.7bn).
A major electricity blackout paralyzed large parts of the Czech Republic, interrupting transport and essential networks, raising immediate economic concerns, and highlighting the vulnerability of energy infrastructures to unforeseen technical incidents.