Calif. needs to set 51% renewables target to keep market humming — report

Source: Debra Kahn, E&E reporter • Posted: Wednesday, November 20, 2013

California risks stalling its renewable energy industry if it does not mandate more renewables generation, according to a new report by University of California law schools.

For the state’s legal and energy policy experts, California’s success in reaching its near-term renewables targets underscores the risk of complacency.

“The success of state policies may ironically be contributing to a stalled market for renewables,” said Ethan Elkind, the report’s lead author and a climate policy associate at both the University of California, Los Angeles and Berkeley law schools. “We need to boost our renewable energy goal to 51 percent or more by 2030, to maintain our momentum.”

In pursuit of 20 percent renewables by 2010 and 33 percent by 2020, the Golden State has brought 4,500 megawatts of renewable energy online between 2003 and 2012, including nearly 2,000 MW during 2012 alone. Another 3,000 MW of capacity is forecast to come online by the end of this year.

Setting a new target for 2030 will help encourage utilities to sign more contracts and move the state further toward its 2050 goal of reducing statewide greenhouse gas emissions to 80 percent below 1990 levels, the report says.

But significant obstacles remain on the policy level, including the lack of a long-term plan to finance grid upgrades and advances in renewables technology. Another issue is the potential use of fossil-fueled generation to integrate renewables into the grid.

Ensuring that the new target does not require an increase in greenhouse gas emissions to compensate for the weather-dependent nature of wind and solar could require new operational requirements for renewables. Policymakers should set flexibility requirements, including energy storage mandates or the ability to restrict the flow of power onto the grid, the report says. Plant operators could also provide better forecasting of wind and solar generation to help grid operators accommodate renewables “without relying on fossil fuel generation to provide excess backup power as security.”

Broadening access to renewables in the West

The report came out of a one-day workshop in June that brought together renewable energy developers, finance experts, advocates, utility representatives, business leaders, and public officials. It includes a laundry list of prescriptions for policymakers, divided into jurisdictions.

The California Public Utilities Commission has the lion’s share of the work, which includes performing a comprehensive cost-benefit analysis of greenhouse gas reduction scenarios, using smaller geographic areas to plan for distributed generation and utility-scale renewables, promoting “fast-ramping” energy sources to help balance intermittent renewables and continuing to promote energy storage beyond the targets regulators set last month for utility procurement (E&ENews PM, Oct. 17).

For lawmakers, tasks include convening an expert group to look at how utility regulations can be changed to help better integrate renewables without increasing greenhouse gases, as well as actually changing the law to require integration to reduce emissions.

On the regional and federal levels, the report recommends broadening access to renewables across western North America so that individual grid operators can better balance intermittent renewables from specific locations.

The state could also allow utilities to buy more renewable energy credits, which represent the environmental attributes of renewable energy but not the energy itself. RECs, as they are known, could help stimulate renewable project finance outside utilities’ jurisdictions, the report says.

“Unbundled RECs can help finance renewable projects outside of utility jurisdiction and may allow for more cost-effective renewable procurement, although critics believe that RECs may be subject to price variability that increases ratepayer costs,” it says.