Decarbonizing California’s Energy Diet 

By Natasha Mmonatau

Prompted by the Arab oil embargo in the early 1970s, California pushed its state’s energy commission to discuss prospective new power sources that could handle a rising annual load.

“In 1973, we were pell-mell into large-scale linear extrapolation of nuclear, coal, and gasoline consumption,” said Hal Harvey, CEO of the policy and technology company Energy Innovation in San Francisco. The embargo prompted renewed interest in alternatives, and in 1978, the Energy Tax Act provided economic incentives for large-scale solar power companies to build new facilities.

Today, renewable energy sources have gained far more traction than anyone imagined possible. California’s ambitious energy goals may lead the state toward an economy far less reliant on carbon-based fuels than ever before, as the state has some of the most progressive regulation nationwide in place to support renewables.

As of summer 2017, Senate Bill 100 – a bill proposing that California transition to 100 percent renewables by 2045 – is making its way to the Assembly, following a successful vote in the state senate in Sacramento. The measure expands the state’s existing commitment to getting 50 percent of its energy from renewables by 2030. 

So the question is not if California will transition to majority renewable sources of energy, but how, and how fast. Experts disagree on the feasibility of these decarbonization targets, because of the tension between achieving renewable energy goals and ensuring a dependable energy supply. And it is hard to know whether technology and infrastructure can develop on this demanding schedule.

To reach these ambitious goals, the state will need to overcome several key hurdles, particularly learning how to: store renewable energy; combine energy markets across state lines; and increase efficiency.

To some extent, this is already happening – California now gets almost a third of its energy from out of state, and it is currently working on plans to create a market that links suppliers across several different states and utilities.  

Purging Carbon is a Regional Task

In 2015, electricity generation produced nearly 20 percent of California’s greenhouse gas emissions. California’s Renewable Portfolio Standard requires a growing share of the state’s electricity to come from renewable and/or low-carbon sources; while carbon emissions due to in-state generated electricity has remained relatively flat, energy imported from out of state has been steadily declining in greenhouse gas intensity.

Source: California Energy Commission   Geoff McGhee
 

The Case for a Unified Interstate Grid

In a recent interview, V. John White expressed concern with existing grid infrastructure. White, who is executive director of the Center for Energy Efficiency and Renewable Technologies (CEERT), an advocacy group in Sacramento, said “We need to not just think about adding more renewables to the grid, but how to use renewables to actually operate the grid.”

CEERT’s “Fix The Grid” program aims to address what it calls “the greatest impediment to decarbonizing the western economy” through a better integrated regional grid. Among other things, an integrated grid would help utilities avoid wasting unused renewable energy when its prime market cannot use it. In an integrated market, energy suppliers could trade excess power across state borders.

But nationally, interest in such integration is low. Hal Harvey explained what he sees as a reluctance among state leaders to open their energy markets to outsiders. “Most energy policy is set state-by-state,” Harvey explained, “but there is the possibility of integrating energy policy across states.”

But, he added, “incumbent energy producers will throw out obstacles.” He added “They’re going to scream bloody murder whenever a new industry comes in.” In 2015, oil companies spent more than $11 million successfully lobbying to block climate change legislation in Sacramento. In the future, fossil-fuel industry lobbyists will continue to play a significant role in determining whether renewables and an integrated grid can achieve widespread acceptance. 

For most state governments, the question of energy-market integration is a fraught one. On a recent visit to Stanford University, New York state energy regulator Diane Burman spoke of the need for open and honest dialogue around energy issues.

The head of the Public Service Commission (which regulates New York State’s electric, gas, steam, telecommunications, and water utilities), Burman was asked about her organization’s interest in integrating energy markets across state borders. “That’s a loaded question,” she said, “yes – but at the same time we have to recognize some of the in-state and out-of-state issues.” Her discomfort with the notion of a combined interstate effort to broaden energy economies highlights a common reluctance in many state capitals.

Yet Burman seemed to view regional energy collaboration as an important strategic decision in the long run. “The focus is regional coordination,” she said. “…we don’t want to be the ones sticking out and not integrating.” But in the meantime, she has the same bottom line as energy regulators and managers everywhere: keeping the lights on.

Jeffrey Ball, a writer focused on energy and the environment, and scholar-in-residence at Stanford Law’s Steyer-Taylor Center for Energy Policy and Finance, agreed that market integration would certainly help; “the broader the market is, the more efficient it can be.” But, he added, “Constituencies have an interest in keeping their power.” And in the United States, “energy is regulated on the state, rather than the federal level.”

Government’s Role in Affecting Energy Economics

California has also prodded renewable adoption by regulating fossil-fuel use and providing subsidies. These have helped renewables become economically competitive. As Professor James Sweeney of Stanford’s Precourt Energy Efficiency Center said, “When you aren’t regulating [renewables], and it’s market competition, those producers that put in uneconomical renewables would lose market share.” Regulation has played a pivotal role in California’s adoption of renewable energy.

In 2015, California’s energy mix for electricity shows the following components: about 59 percent of energy came from natural gas, 7.7 percent from solar, 6.2 percent from wind, and 5.9 percent large hydro power.

Yet as renewable prices are dropping far more rapidly than anyone predicted, some argue that regulation needs to get smarter. “There’s a public backlash now against subsidies that many people think are inefficient,” Sweeney said. Without tax breaks for investors, said Jeffrey Ball, renewables may not have flourished at all.

As it stands, renewable energy generation is rapidly catching up to natural gas, California’s largest power source as of 2015. Though a very wet winter may have meant extra hydroelectricity, helping renewable generation, California this year has used significantly more renewables than the previous year, and much less natural gas.

Efficiency Is the Special Sauce in the Energy Mix

As grid integration and regulation ease the path for renewables, California’s energy management needs one more thing: continued success in reducing overall energy use. To this end, the clean energy advocate Hal Harvey cites “a remarkable piece of legislation:” Title 24 of the California Building Standards Code, which requires continuous improvement. Its standards must be updated every three years to reflect technological innovation. 

The law continues a trend started in 1975, when the California Energy Commission was created. “What they discovered,” said Harvey, “was that there were spectacular opportunities for energy efficiency.” 

But as much as the state has pushed to reduce energy use through building codes, appliance standards, and utility efficiency programs, technology continues to offer new options.

For example, high-rise building managers in Los Angeles could use increasingly precise weather predictions to prepare for hot days. By pre-cooling skyscrapers between the hours of four and seven o’clock in the morning, they could turn air conditioning off in that particular building during mid-afternoon hours, reducing the load at peak demand times.

This option changes the old energy paradigm. “The grid was built on a predicate of fossil-fueled electricity with a central switch,” said Jeffrey Ball. “So you could predict how much you were going to produce when.” In an indication of how important predictive techniques will be, he added, “You have to get much more elegant about forecasting when the sun’s going to shine.” 

Hal Harvey’s optimism about California’s energy future is rooted in a belief that better management practices, as well as an integrated energy market across the country, will help transform the grid. Harvey is hopeful, saying “The electric grid can be 100 percent renewables by 2050.” 

Whatever is true of the country at large, California is likely to be ahead of the pack. “California has a temperate climate, produces essentially no electricity with coal, and has extraordinarily abundant renewable resources,” said Ball. But he knows that not all states are as well equipped for a transition to renewables.

And, he said, “It’s becoming clear that while renewable energy has grown massively, it’s still nowhere near the change that would be required for it to make a meaningful environmental difference.”

Renewables are rapidly catching up to natural gas in their share of power production. For the month of February 2017, California generated roughly 25 percent of its electricity from renewables, and about 39 percent from natural gas. 

“By 2030, for electricity generation, we’ll be beyond half renewables” in California, Stanford’s James Sweeney said. A key driver of the future, he added, would be federal action. “We create a serious carbon tax, we keep the fuel efficiency standards up, we put money into research and development, creating incentives that move the technology forward.” 

A national carbon tax could turbo-charge California’s journey to the land of completely renewable energy. That journey, difficult as it is, is intertwined with a far more challenging national journey. To have a significant impact on how energy shifts across the U.S., the state must look for collaborations across state lines that could provide incentives for everyone.

Moving beyond a dependence on natural gas to guarantee reliability will take a concerted effort by energy regulators and consumers. As Ball said, “It’s important to remember that this is a messy transition we’re in.”