The Enviro-Favoritism That's Keeping California Less Green
In a previous RealClearMarkets column, I asked whether California could actually get any greener than it currently is. This matters when we remember that Golden State politics are increasingly centered on who can propose the most aggressive environmental plan. But what California's elected leaders often ignore when "keeping up with the environmental Joneses" are the facts.
Earlier this week, the Hoover Institution released the inaugural issue of Eureka, a bi-monthly periodical featuring commentary on a timely policy topic. To augment the featured commentary, Eureka will also highlight via the "CalNOTEs" and "Facts on the Issue" additional details about the policy topic being explored. The March/April 2015 issue examines Governor Brown's three climate change proposals: 1) increasing the renewable electricity mandate to 50% by 2030, 2) reducing vehicle petroleum use by 50%, and 3) doubling the energy efficiency of California's buildings.
While examining proposal number 1, an interesting factoid emerged: California has already hit its 33% renewable mandate and is very close to achieving the 50% proposal. One tiny detail: California would have to recognize nuclear and large hydro-electric power generation as eligible renewable energy sources to reach 50%.
California's current Renewable Portfolio Standard, established in 2002, requires the state's electricity providers to receive 33% of their energy from eligible renewable power sources by 2020. The key here is that the state sets a very specific list of what is eligible. While a whole host of renewable sources -ranging from solar and wind, to geothermal,l to niche power sources like anaerobic digestion and tidal or wave energy - are included, nuclear power and large hydro-electric generation are specifically excluded (small hydro-electric is okay, however). As the new issue of Eureka points out, this creates a reliability and cost problem because the eligible renewables are intermittent power - meaning their supply often times doesn't match demand - and via the mandated contract terms, electricity providers (and hence, consumers) have to pay for eligible renewable power even if the grid isn't receiving it.
Without nuclear and large hydro-electric power, allowed renewables represented 19.6% of California's in-state electricity generation in 2013, up from 13.7% in 2001. Nuclear and large hydro-electric, however, accounted for another 19.3% in 2013, meaning that accepting those two, non-carbon power sources would have doubled California's renewable portfolio, surpassing its 2020 33% mandate by almost 6 points. Moreover, at 38.9%, including nuclear and large hydro-electric would put California just 11 points away from the ambitious 50% Governor Brown proposed in his January State of the State.
In fact, in 2011, allowed renewables plus nuclear and large hydro-electric accounted for 53.1% of California's in-state electricity generation, easily surpassing Brown's new target. But as you'll notice; in the two years that followed, non-carbon electricity generation dropped by 14 points. While California has been obsessed with solar power and other socially acceptable forms of renewable power generation, it has allowed nuclear power to basically become nonexistent in the state.
In 2011, nuclear power accounted for 18.2% of in-state electricity generation; it dropped to just under 9% in 2013. Since 1976, when the California legislature passed a de facto moratorium on nuclear power generation, the Golden State hasn't been able to build new nuclear plants. As a result, when the San Onofre Nuclear Generating Station had to be taken off-line (and eventually decommissioned), the state had to turn to natural gas to pick up the slack. As such, carbon emitting electricity generation jumped from 46.8% in 2011 to 61.1% in 2013, and with it California's CO2 emissions rose in 2012 for the first time since 2007.
If California's Renewable Portfolio Standard was really about reducing California's carbon footprint, then the state's portfolio would allow all non-carbon energy sources. Moreover, adding in large hydro-electric and nuclear would solve one of the biggest barriers to increasing California's electricity reliance on renewables: intermittency. Since nuclear and large hydro-electric are base load sources, they can power up and down as needed, helping to fill in the gaps for when other sources like solar and wind are either not generating enough or too much.
But California's Renewable Portfolio Standard isn't just about climate change, it's about politics and more specifically, rewarding those energy providers and sources deemed appropriate by Sacramento's power-brokers and their political allies. The irony is, however, that because California's leaders refuse to accept all non-carbon energy sources, it is preventing the state from actually achieving its full potential in renewable generation and carbon footprint reduction.