Why California leads the renewables push
California’s environmental agenda is succeeding
By Kathryn Masterson, Matt Reilly and Philip Smyth
U.S. support for renewable electricity and sustainable energy infrastructure continues to grow. Few states are more committed or have a longer track record to clean energy than California, which has taken a leadership role through its early action and legislative adoption of some of the most ambitious renewable energy and clean air goals in the nation. After years in the making, California is succeeding in meeting those goals. In 2014, California generated 20% of its energy from renewable resources, as compared with 10% for the United States as a whole.
California’s Objectives: More Renewables, Clean Air
California’s ambitious environmental agenda aims to reduce greenhouse gas emissions to 40% below 1990 levels by 2030, increase its renewable energy standard to 50% and increase energy efficiency in existing buildings by 50%. These policy initiatives have spawned several regulatory proceedings and rulemakings. While critics object to the mission creep and a labyrinth of reporting requirements in the state, the collective regulatory regime has pushed technology advancement and prepared the grid for growing intermittent load and two-way power flows associated with higher wind and solar generation. California legislation enacted in 2013 and 2015 in support of clean energy has also empowered regulators to modernize the electric grid and address related residential tariff issues while reducing greenhouse gas emissions.
At what cost?
The cost to transition California’s energy markets has resulted in an average residential price of electricity increase of 48% over the last decade according to the U.S. Energy Information Administration. In comparison, the national average increased 32% over that same time. While many factors contributed to the rising cost trend, California’s regulatory mandates are among the key cost drivers and are likely to continue to contribute to upward pressure on electric rates over the next decade. Favorably, the sharp decline in natural gas prices in the U.S. since 2008 (due to abundant U.S. shale reserves) has significantly reduced upward pressure on monthly utility bills resulting from large investment in clean energy and to replace aging infrastructure, providing headroom to absorb the costs related to a low carbon energy policy and other factors.
The answer to why California is moving so quickly is a growing concern regarding global climate change and man-made greenhouse gas emissions. The move towards greater renewables and away from carbon emitting resources in the West is also likely to be a less expensive undertaking compared to some other coal-heavy regions of the U.S. Key reasons include access to regionally abundant wind and solar resources, lower reliance on coal-fired generation, and robust hydroelectric resources.
Another factor is California’s early focus on clean energy and renewable investment. De-emphasis of traditional, central station resources such and coal-fired generation, began to take root early in California, the largest state economy in the West and the nation. California’s loading order, adopted in 2003, emphasized energy efficiency, demand response and renewables.
California’s environmental initiatives and stiff cost competition have also driven the state toward increased use of natural gas plants as an alternative to coal-fired plants. Although both types of power plants emit carbon dioxide, plants fueled with natural gas emit about one-half the amount of carbon released into the atmosphere by coal-fueled generation. The renaissance of emissions-free nuclear generation hoped for long ago as an alternative to fossil fuel generation has fizzled out under cost pressures.
Will other states follow?
A number of states across the country are already increasingly focused on clean energy policies, bulking up renewable standards and shutting coal capacity. New York has aggressively committed to greenhouse gas reduction by establishing a target in its 2015 state energy plan to reduce emissions 40% by 2030 and 80% by 2050. Many states have renewable energy targets and an increasing number are incorporating meaningful emission reduction targets in their climate action plans. Hawaii has upped its renewable standard to 100% by 2045, Vermont to 75% by 2032 and Oregon to 50% by 2040. In addition, regulators in New York are poised to raise the state’s clean energy standard later this summer to 50% by 2030.
States with coal-heavy generation fleets will likely find the conversion to a cleaner resource mix more challenging, resulting in lengthy and costly implementation timelines. Twenty-four states have challenged the legality of the Obama administration’s Clean Power Plan, including Texas, Alabama, New Jersey, West Virginia and Wyoming. In spite of the push-back, the overarching trends augur well for future growth in renewables, notwithstanding pending court challenges to CPP.
California is taking a leading role in America’s path toward an energy economy that includes significantly higher renewable power supply and reduced carbon emissions, with the state making impressive strides in recent years. The state has also demonstrated that reaching these goals is not without cost, which will affect each region differently based on their current power supply and local economic and political/regulatory factors.
Originally published at thewhyforum.com.