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California’s enthusiastic moves to renewable energy

California finds clean energy’s magic ingredient: Ambition REneweconomy, By Giles Parkinson on 8 July 2013 “……There is no talk of repealing or diluting the carbon price, and its renewable energy target is 33 per cent by 2020 …….. Some time in the next couple of years the California legislature in Sacramento is likely to move the bar even higher, to 40 or even 45 per cent (by 2025 or 2030).

Edward Randolph, the energy director from the California Public Utilities Commission, which oversees the investor-owned utilities in the state, says constantly raising that level of ambition has proved extremely successful.

“A lot of people argued against the 33 per cent target saying it was too difficult, but the legislature said ‘no, we’re going to set broad and ambitious goals and let the engineers figure out how to do it,” Randolph tells RenewEconomy in an interview in his San Francisco office last week.

“And quite frankly I think that has been the right way of doing it, saying ‘this is what we are going to do, you guys go figure it out’. That’s worked really well and that’s why I’m certain that in the next year or so the legislators will come back and say we ready to move to 40 per cent or 45 per cent. They don’t wait for us to get to the goal. Once they start seeing progress, they move the goals. And I honestly think it works.”

It’s not stopping there. The office of Democrat governor Jerry Brown, who apparently loves solar, has mandated 3,000MW of rooftop solar by 2017, has a program to encourage “self generation” in other technologies (such as fuel cells), and is looking at taking leadership in the electricity storage market, pushing for a mandated 1GW of storage to be installed by 2020. All these targets are over and above the renewable energy target, known here as Renewable Portfolio Standard.

How is this possible? A lot of it is due to the fact that the Democrats control the state legislature, but even some key Republicans have thrown their support behind these initiatives, despite the federal rhetoric. That marked the governorship of Arnold Schwarzenegger – admittedly more Hollywood than Republican – and in towns like Lancaster, even Republican mayors are pushing to make solar compulsory on all rooftops.

Right now, California sources around 21 per cent of its electricity from renewables – which include wind, utility scale solar, hydro and geothermal.  But the mix is rapidly changing. In 2011, as this graph below shows, wind and geothermal accounted for nearly two thirds of all renewable generation. By 2020, solar will account for nearly one half (47 per cent)…….

The other finding is that, contrary to detractors, the target is not proving expensive. Costings by the CPUC estimate that retail electricity prices will rise no more than the rate of inflation – about 2-3 per cent – out to 2020 – that’s the same increase of the past decade.

Indeed, as it is elsewhere, it is now becoming clear that renewables such as solar PV and wind are challenging fossil fuels on costs – even in the wholesale market.

Last week, the San Jose municipal authority wrote contracts for 80MW of solar PV at 6.9c/kWh, which after a 30 per cent investment tax credit works out to be around 10c/kWh.

Randolph says he has just approved more contracts for distributed solar systems of between 3 and 10MW in and around the same price. “I just signed off on a couple of contracts and they are competitive with fossil fuels,” he says.

The other point of note is that California has not had to add to fossil-fuel generation capacity to support renewables. About 10GW of old, inefficient gas-fired generators will be closed in coming years for environmental reasons– these are mostly 50-year-old generators which use sea-water cooling through a method known as “once-through cooling”. Randolph says these will be replaced by newer gas turbines that can provide the flexibility to respond to renewables……..

All of these policies are on top of the energy efficiency measures that California introduced in the energy crisis of the 1980s, and which has seen no rise in per capita consumption of electricity since 1980, despite the huge proliferation in appliances in the home and business. Much of this has been achieved through strict energy efficiency target, green building codes and retro-fits……

One of its two nuclear plants, the 2,200MW San Onofre, recently closed down a decade ahead of schedule due to technical issues, and the other, the 1,900MW Diablo Canyon, which recently went missing in action during the recent heat-wave, is due to close in 2022.

The governor is focusing on distributed generation. Hence the rooftop solar target, the self-generation program (which even if it uses gas-fired equipment must show a reduction in emissions), and even stronger targets with energy efficiency.

The biggest challenges, Randolph says, are how the utilities adapt. The different dynamics of the renewables technologies at utility level, but also the focus on rooftop solar and other forms of distributed generation, self generation and storage, runs counter to the business model of the utilities. There is currently a cap on rooftop solar that equates to 5 per cent of peak demand for a utility, but they are under pressure to change it.

“That has become a big conversation here now – what the utilities model looks like 20 years from now” Randolph says. “If we really want to meet these renewable energy goals, utilities are going to have to have a different business model……. http://reneweconomy.com.au/2013/california-finds-clean-energys-magic-ingredient-ambition-83435

July 8, 2013 - Posted by Christina Macpherson | renewable, USA