While the rest of the world watches the giant steps California is taking in its low-carbon energy transition, Ariel Cohen raises some words of caution in an article on the Forbes website.
California’s New 100% Green Energy Target May Do More Harm Than Good
California governor Jerry Brown just signed a bill (Senate Bill 100) that would eliminate fossil fuels from the state’s electric grid entirely by 2045. That’s a tall order for a state that consumes 206 billion kilowatt hours (bn kWh) of electricity per year – more than Indonesia’s population of 240 million. Today, the Golden State relies on natural gas for more than a third of its power generation. And while California boasts some of the highest renewable penetration rates in the nation, its citizens also pay over 50% more for electricity than the U.S. average – ranking 7th highest in residential energy prices.
So just how feasible are the goals outlined in S.B. 100?
The political will in California for a greener grid is certainly there. The state is home to some of the most ambitious environmental and energy regulations in the United States, including the only economy-wide emissions cap-and-trade program in the nation. Its strict renewable portfolio standards (RPS) for power generation require that 33% of retail sales of electricity in California come from eligible renewable resources by 2020 and 50% by 2050.
And these policies are popular.
Two-thirds of residents support the state enacting its own climate change policies above and beyond federal mandates and 56% are in favor the current cap-and-trade policy. As for S.B. 100, 72% of adults and 66% of likely voters approve of the proposal, including 81% of Democrats and 53% of Republicans.
And the power generation sector is getting greener. Renewable energy sources (wind, solar, geothermal, and biomass) are eating into the market share of natural gas and coal. The latest data show that natural gas represents some 34% of the energy mix — down from 40% just two years ago — while renewables account for more than 40% in 2018. In 2017 renewable generation stood at 30%.
But there are valid criticisms of California’s aggressive pivot toward carbon-free energy. Transitioning the state’s electric grid to accommodate 100% green energy would not only be incredibly costly but may even result in greater greenhouse gas emissions – at least in the short to medium term. That’s because the variability of renewable sources like wind and solar requires a dependable backup for sudden drops in generation. This means keeping natural gas or coal plants idling for those times when the wind is not blowing or the sun is not shining – an expensive, inefficient, and environmentally unfriendly process.
Furthermore, renewables like wind and solar are typically producing at their peak when demand is lowest (the middle of the day or late at night), creating excess energy that puts tremendous stress on the grid. Without adequate utility-scale storage, this excess is either wasted or offloaded to other utilities for a fee. The cost of storage can add between $0.02 and $0.09 per kWh, enough to make renewables sources uncompetitive with cheap U.S. natural gas.
Germany’s ongoing Energiewende (energy transition) program is a famous example of how increasing renewables in the energy mix can actually lead to an uptick in C02 emissions. Intermittency issues in renewable generation forced Germany to add more toxic lignite-powered coal plants as standby power. Germany also increased its imports of foreign-generated electricity (such as nuclear from neighboring France or coal from Poland and the Czech Republic).
Even assuming that associated emission spikes are only a short-term problem, there are still serious issues with cost. Electricity prices are already high for California’s citizens, and further increases could jeopardize support of the state’s green policies. Electricity prices rose 22%, while electricity from solar and wind grew from 3% to 23% between 2009 and 2017.
Denmark, Spain, Germany, and Australia are just a few examples of countries in the world where electricity prices rose after a shift to a larger share of renewable was achieved. These costs are associated with massive infrastructure buildouts (for renewable capacity itself and changes to the grid) as well as the shuttering of cheaper fossil fuel alternatives.
Consider that one combined cycle natural gas plant requires one transmission line to reach the grid whereas utility-scale wind and solar can require dozens. These lines are also typically longer, as they must reach (often remote) locations with the space and energy density to satisfy large renewable projects. An often-cited example of this discrepancy is California’s Diablo Canyon nuclear power station. The 2.25 GW Westinghouse (NYSE:WAB) plant produces 18 times the electricity of the neighboring Ivanpah solar farm over the course of a year. It would take a land area 300 times larger than Diablo Canyon for Ivanpah — funded by NRG Energy (NYSE:NRG) — to match the nuclear plant’s carbon-free capacity. The land requirement for an equivalent wind farm would be even greater.
California certainly seems to be on track to reach its 2045 goals, but Governor Jerry Brown should tread carefully, as “too much too fast” could bring economic and environmental consequences that everyday Californians may regret after all.