With Gov. Jerry Brown throwing his political weight behind a plan to get half of California’s electricity from renewable energy, experts say the idea is an ambitious but attainable way to limit climate change.
California utilities are on track to meet the state’s current clean energy mandate, which requires them to buy 33 percent of their electricity from renewable sources by 2020. In his inaugural address last week, Brown proposed raising that mandate to 50 percent by 2030, as one of several steps to reduce emissions of planet-warming greenhouse gases.
“This is exciting, it is bold and it is absolutely necessary if we are to have any chance of stopping potentially catastrophic changes to our climate system,” the Democrat told state lawmakers.
A previous effort to raise the renewable energy mandate above 50 percent — championed by then-Assemblyman V. Manuel Pérez, a Coachella Democrat — died in the state Legislature a year ago. Pérez’s bill faced stiff opposition from utilities and businesses groups, who argued that the plan would drive up energy costs.
Now, though, Brown has thrown his substantial influence behind the proposal, coming off a re-election in which he cruised to victory by 20 points.
“With his leadership and commitment, and extensive political capital to spend at this point, I think we’re very confident that achieving that outcome is doable,” said Alex Jackson, legal director for the Natural Resources Defense Council’s California Climate Program.
The details of Brown’s renewable energy plan are still up in the air, and his office declined to offer more specifics.
But an increase in the renewable energy mandate could kick-start solar, wind and geothermal development in the desert, all of which have slowed over the last few years.
“The people putting money into renewable energy need to have a clearer signal that there is going to be a market for renewable energy,” said Nancy Rader, executive director of the California Wind Energy Association. “It was great for him to propose that goal.”
Energy and climate experts have long assumed that California would raise its renewable energy mandate, officially known as the Renewables Portfolio Standard.
State policymakers have set a goal of reducing greenhouse gas emissions 80 percent below 1990 levels by 2050, and that will be all but impossible without deeper cuts from the electricity sector, which accounts for about one-fifth of all emissions.
From a technical standpoint, energy experts say California should have little difficulty getting 50 percent of its electricity from renewable energy. The state has some of the best solar, wind and geothermal resources in the world, and it also has the option of importing renewable energy from other Western states.
While Democrats’ control of both houses in the state Legislature doesn’t give Brown a slam dunk, political observers and renewable energy advocates say his decision to highlight the plan in the inaugural address shows he’s willing to fight for it.
“The governor has shown himself to be a pretty resolute governor,” said Karl Gawell, executive director of the Geothermal Energy Association. “When he’s laid out his goals, he’s put a shoulder behind them.”
It’s still unclear whether the state’s major utilities will oppose Brown’s proposal as staunchly as they did Pérez’s.
When asked about Brown’s plan, representatives of Pacific Gas & Electric and San Diego Gas & Electric declined to take a position on a 50 percent renewable energy mandate, saying only that they “look forward to working with the governor” to reduce carbon emissions while limiting electricity rate increases.
Southern California Edison officials hinted they might not oppose Brown’s plan. The utility acknowledged in a statement that “higher than present levels of renewable energy will likely be part of any overall carbon reduction program.”
“The governor has presented a policy for California to be a leader in carbon reduction and this is the focus of his broad plan,” Edison officials said in an emailed statement.
“We look forward to working with the administration to develop and implement this group of measures to achieve a lower carbon future.”
The current 33 percent mandate has caused energy prices to increase, although not as dramatically as some groups feared it would.
According to Arne Olson — a partner at Energy + Environmental Economics, a San Francisco-based consulting firm — the mandate has probably raised energy prices between 6 and 8 percent.
Olson said the firm’s most recent study showed that increasing the mandate to 50 percent could cause energy prices to rise another 9 to 14 percent. The cost of building solar and wind facilities has dropped substantially over the last few years, although they’re generally still more expensive that gas-fired power plants.
“The costs are significant, but it doesn’t seem like they’re necessarily a showstopper,” Olson said. “But that’s in the eye of the beholder, of course.”
California’s 33 percent mandate is already one of the highest in the nation, but the state’s major utilities are on track to meet it.
Southern California Edison, for instance, purchased 21.6 percent of its retail electricity from renewable sources in 2013, seven years before the 2020 deadline. Based on power purchase agreements it has already signed, Edison projects it will increase that figure to 23.5 percent by 2020.
Pacific Gas & Electric and San Diego Gas & Electric are in even better shape, having respectively purchased 23.8 percent and 23.6 percent of their retail electricity from renewable sources in 2013. Based on contracts already signed, officials project they’ll hit 31.3 percent and 38.8 percent, respectively, by 2020.
“We have demonstrated that we can deploy a large amount of renewables without significant cost, compared to the cost of gas. That’s a game-changer,” said V. John White, executive director of the Center for Energy Efficiency and Renewable Technology, a Sacramento-based advocacy group.
“Renewables are ready for prime time.”
But with five years remaining until 2020 — and the state’s major utilities already well on their way to 33 percent — there isn’t as much pressure to add clean power to the grid as there used to be.
Solar power, in particular, has taken a hit: At least a half-dozen large-scale solar projects planned for Riverside County have been stalled or delayed for months or years, and several others have recently been dropped by their developers.
That could change if the renewable energy mandate goes up to 50 percent, potentially creating jobs and spurring investment across the desert.
“It doesn’t make much sense not to make that transition (to 50 percent) sooner rather than later, because that’s what sends the signal to the companies to keep investing in those renewable energy activities,” Rader said.
But while wind and traditional solar development — the cheapest forms of renewable energy — are likely to benefit from a 50 percent mandate, it’s less clear how the geothermal industry would fare.
The Salton Sea is home to one of the world’s most potent geothermal reservoirs, and local leaders see new geothermal plants as critical to funding the sea’s much-needed restoration.
But geothermal development is more expensive than most clean energy options, and only one new plant has been built by the Salton Sea since 2000.
A key goal of Pérez’s failed legislation was to catalyze geothermal development. It’s unclear whether Brown is looking to boost geothermal as part of his proposal.
“He didn’t specifically call out geothermal, and that’s a concern to us,” said Carl Stills, energy manager for the Imperial Irrigation District. “What are the mandates that are going to come down off of his goals? We don’t know what that is yet. He gave some general categories but he didn’t really go into specifics.”
The fate of geothermal development depends largely on how policymakers structure an expanded renewable energy mandate.
Brown’s 50 percent proposal is simple on the surface, but reducing greenhouse gas emissions from electricity is far more complicated than just demanding more renewable energy.
So far, California has pushed toward 33 percent largely on the backs of wind and solar development. But both of those energy sources are intermittent: Traditional solar plants only produce electricity when the sun shines, and traditional wind farms only produce electricity when the wind blows.
That intermittency hasn’t caused any major problems — yet.
But experts say that if California wants to get to 50 percent, policymakers need to figure out a way to integrate huge amounts of intermittent renewables without threatening the reliability of the electricity system.
“The integration challenges really start to become significant when you get above 40 percent,” Olson said.
Other problems loom: Utilities have generally supplemented wind and solar with natural gas plants, which produce half as much carbon as coal-fired power plants but still contribute to climate change. If California just keeps adding intermittent wind and solar to the grid, it will need to burn more fossil fuels, too.
“It is possible that we could have a 50 percent renewables target —and meet that —and not have nearly the reduction in carbon that we need,” White said.
Experts say getting to 50 percent while meeting climate goals and maintaining grid reliability will likely require a more nuanced strategy than the current renewable energy mandate.
As it stands, the mandate compels utilities to buy the lowest-cost resources available — in other words, mostly wind and solar.
White believes policymakers should pursue a “balanced portfolio” strategy as part of a 50 percent renewable energy mandate. Such a strategy, he said, would replace a single-minded focus on adding more renewables with a broader focus on greenhouse gas reduction.
That could mean promoting greater amounts of geothermal power, which is not intermittent, and concentrated solar power, which can be stored more easily than power from traditional solar plants. It also could mean greater emphasis on energy efficiency, rooftop solar and home energy storage.
White likened that kind of strategy to “going from a garage band to a symphony orchestra that plays together and complements each other and makes beautiful music.”
“It’s sort of like we need a choreographer to fit this all together,” he said.
Brown hinted in his inaugural that he might have that kind strategy in mind, mentioning rooftop solar and battery storage among a wide array of tools for reducing emissions. He also framed renewable energy in the context of fighting climate change, which Gawell said bodes well for geothermal energy.
“You’ve had a lot of shift from looking just at how much renewable you’re getting, to how much carbon you’re reducing,” he said.
Some observers, though, are skeptical about a strategy that promotes geothermal development, which has much higher up-front costs than wind and solar development. And even with dropping prices, energy storage remains quite expensive.
There’s an “inherent tension” between mandating specific energy sources and giving utilities the flexibility to keep electricity rates costs low, said Matthew Freedman, a staff attorney at The Utility Reform Network, a San Francisco-based ratepayer advocacy group.
“I think geothermal power’s great, it’s a really valuable resource,” he said. “But the pricing of it is very high compared to what we’re seeing for solar and wind.”
If legislators require some renewable energy to come from geothermal, Freedman said, it could “significantly increase the cost of the program.”
In the Imperial Valley, observers have the opposite concern.
Stills, from the Imperial Irrigation District, said he isn’t sure if he’ll support Brown’s 50 percent proposal — at least until he finds out whether it would boost geothermal.
It’s unclear how soon legislators will act on Brown’s proposal, but the process could take a while. Passing the first renewable energy mandate, Freedman noted, took the Legislature two years.
“If a new law got passed in 2016, that might actually be pretty speedy action, given the complexity of the issue,” he said.
State regulators, under Brown’s direction, also could increase the 33 percent mandate without legislative action. The California Public Utilities Commission said in November it would consider increasing the mandate early this year, as it has been authorized to do by the state Legislature.
Any decision from the commission, though, wouldn’t apply to publicly owned utilities, including the Imperial Irrigation District and the Los Angeles Department of Water & Power.
Most observers agree that even if regulators take action on their own, Brown’s 50 percent proposal will eventually require legislation.
Whatever the new renewable energy mandate looks like, it won’t be the only factor that determines whether solar, wind and geothermal development thrive in the desert.
A 30 percent federal tax credit critical to the solar industry is set to expire at the end of 2016, and a key wind tax credit expired at the beginning of the year.
There’s also the Desert Renewable Energy Conservation Plan, a massive draft document that would reshape energy development across 22.5 million acres of California desert.
While the solar and geothermal industries have generally responded positively to the plan’s proposed renewable energy zones, wind advocates have said it would kill most new wind development in the state.
Rader said she’s hopeful that by the time legislators approve a 50 percent renewable energy mandate, conditions will have improved for the industry.
“I would hope that in that year or two, that we do get more stable tax policy out of Congress, and that the (renewable energy plan) is revised in its final form to be a lot more friendly to wind energy,” she said. “Otherwise there’s not going to be a lot more wind energy in California to meet this goal.”
Energy Reporter Sammy Roth can be reached at [email protected], (760) 778-4622 and @Sammy_Roth.
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