California’s landmark renewable energy law to be signed on Wednesday

Source: By Paul Rogers and Louis Hansen, San Jose Mercury News • Posted: Wednesday, October 7, 2015

An artist’s rendering of a proposed solar power project in the Mojave Desert.

An artist’s rendering of a proposed solar power project in the Mojave Desert. (Courtesy of Brightsource)

In a milestone for reducing pollution and fossil fuel use, Gov. Jerry Brown will sign into law Wednesday a bill that requires 50 percent of California’s electricity to come from renewable sources like solar and wind by 2030.

With huge new solar farms sprouting in the desert every few months and Silicon Valley driving much of the clean energy investment, the state now receives 25 percent of its electricity from renewables. Brown’s act to double that at a signing ceremony in Los Angeles, however, sets in motion a green energy transformation for California over the next 15 years on a scale larger than anything any state has ever attempted.

“It’s huge,” said Kathryn Phillips, state director for Sierra Club California. “It tells banks and utilities, and the people who make solar panels and windmills, that there is going to be a market. If you are thinking, ‘Should I invest in oil wells in Bakersfield or solar panels in Fresno,’ the solar panels are now the better bet.”

But energy experts say that it won’t be easy to reach the legislation’s goals in a state with 38 million people and a $2 trillion economy.

“We’re pushing the envelope hard,” said James Sweeney, director of the Precourt Institute for Energy Efficiency at Stanford University. “It’s going to be challenging. I don’t know if it is going to be viable without major economic consequences.”

Key among the challenges: The sun doesn’t shine at night and the wind doesn’t blow all the time.

Utilities and state power managers will need to find ways, Sweeney said, to provide incentives for homeowners and businesses to spread electrical use out throughout the day, such as offering much lower rates to run appliances or industrial machinery at night. Energy companies also will need to use high-tech batteries to store energy, he said, and transmission lines and control centers will have to be extended and modernized to switch between traditional gas-fired power plants and renewable sources.

“When people are coming home and turning on all their lights and TV sets,” he said, “the sun has just stopped shining. So you need to get that electricity from someplace.”

So far, the state hasn’t seen blackouts or other major disruptions as it has ramped up renewable energy considerably since former state Sen. Byron Sher, D-Palo Alto, wrote the first law in 2003 requiring 20 percent renewable energy by 2017.

“This is an achievable target,” said David Hochschild, a member of the California Energy Commission. “In 2008, California only had 12 percent renewable energy. We’ve doubled that in six years.”

During that time, he noted, the price of renewable energy has fallen considerably, and solar and wind are now roughly on par with natural gas. Going forward, fossil fuel costs are expected to rise while improved technology will keep bringing down the cost of solar and wind, he added.

“I hold the view that renewables are going to be a source of cost reduction, not addition, for ratepayers,” Hochschild said. “You don’t pay for the wind or sunlight, but you have to pay for the fuel with fossil fuel plants.”

No state agencies have studied the potential effect yet on utility rates.

Last year, however, E3, a respected energy consulting firm in San Francisco, concluded in a study funded by PG&E and other utilities that a 50 percent renewable energy standard would raise utility bills between 9 and 23 percent by 2030, beyond where they would be if the existing 33 percent standard were left in place.

Currently California has more renewable energy than any other state.

According to the U.S. Department of Energy, Californians’ average cost for electricity is 32 percent higher than the national average — at $16.19 per kilowatt hour, compared to $12.22 nationally. But a relatively mild climate and years of energy efficiency rules put in place by Brown starting in the 1970s have driven California residents to consume nearly half as much electricity per capita as the national average, so the average home electricity bill is $90.19 a month — 19 percent lower than the national average of $111.08.

The bill that Brown has said he will sign Wednesday, SB 350, by state Senate Pro Tem Kevin de Leon, D-Los Angeles, was supported by the Silicon Valley Leadership Group, PG&E, Southern California Edison and all of the state’s major environmental groups.

It was opposed by Republicans, and numerous industry groups such as the California Chamber of Commerce, the Farm Bureau and the Western States Petroleum Association until a provision requiring a 50 percent reduction in petroleum use from motor vehicles by 2030 was stripped out last month.

Opponents remained unhappy this week.

“Once again, coastal-elite politicians pushed and passed a radical environmental bill that will hurt hardworking families and all businesses in the Valley,” wrote state Sen. Andy Vidak, R-Fresno, in a newspaper op-ed this week that predicted the law will increase electricity costs for low-income families during hot summer months in the Central Valley.

Environmental groups, the governor and other supporters have noted that climate change is already increasing temperatures, reducing the state snowpack and worsening forest fires, all of which have costs to the state.

Meanwhile solar energy industry officials cheered the news, saying it will continue to boost their industry, even though a key federal solar tax credit is set to expire next year.

“The opportunities are pretty clear,” said Bernadette Del Chiaro, executive director of California Solar Energy Industries Association. “It’s a guaranteed market.”

The new law also requires the doubling of energy efficiency in buildings by 2030, which is expected to lead to building codes requiring more energy-efficient windows, duct work and insulation, along with state programs to offer incentives to homeowners to make their homes more energy efficient.