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SACRAMENTO, California, US, November 30, 2005
(Refocus Weekly)
The development of new renewable resources has
been slower than anticipated in California, partly due to the
“complex and cumbersome” Renewable Portfolio Standard process, but
regulators may adopt a new policy which makes recommendations on how
to improve the sector.
“Despite improvements in power plant licensing, enormously
successful energy efficiency programs and continued technological
advances, development of new energy supplies is not keeping pace
with the state’s increasing demand,” says the Integrated Energy
Policy Report prepared for the California Energy Commission.
“Construction of new power plants has lagged and the number of new
plant permit applications has decreased.”
California is the sixth-largest economy in the world, and its
economy depends on “affordable, reliable and environmentally-sound
supplies of electricity, natural gas and transportation fuels,” the
report explains. The challenge is to avoid increasing dependence on
oil and natural gas which may face price increases, potential supply
shortages, and an inadequate and aging energy delivery
infrastructure.
Gasoline prices reached record levels in September and electricity
rates, although not as erratic as the 2000-2001 energy crisis, are
still among the highest in the country, it notes. The dependence on
natural gas to generate electricity is escalating along with the
demand for natural gas in the residential and commercial sectors,
and “California’s energy infrastructure may be unable to meet the
state’s energy delivery needs in the near future.”
In terms of procurement, regulators should establish “open and
transparent resource planning and procurement processes for
all-source and renewable resources” and develop a “more transparent
and standardized method for addressing least-cost, best-fit criteria
and consistently apply a renewable ‘rebuttable presumption’ to all
procurement,” the report recommends.
California is a “national leader in the development of renewable
resources” and, over the past 30 years, has built “one of the
largest and most diverse renewable generation portfolios in the
world.” In 2002, it established a Renewable Portfolio Standard
program to increase the percentage of renewables to 20% by 2017
which, in 2004, was increased to 33% by 2020.
“The current process for procuring renewable resources is overly
complex and cumbersome and, without improvement, could impede the
state’s ability to achieve its renewable goals,” the report warns.
The CPUC and Energy Commission should “simplify, streamline and
expedite” the state’s RPS process and establish “simple rules” for
the RPS which allow limited trading of renewable energy
certificates.
There are several additional issues facing wind resource development
in California, and the state must focus on repowering aging
windfarms to increase the amount of green power from prime sites and
reduce the number of bird deaths caused by turbines. The state must
conduct additional research to address current barriers to
integrating intermittent wind resources into
the state’s transmission system.
“California also has promising opportunities to increase energy
production from renewable resources connected with the state’s water
system,” and inconduit hydropower (turbines installed within
conduits to generate electricity from flowing water in pipelines,
canals and aqueducts) is “an attractive possibility because it is
relatively easy to permit and has fewer environmental impacts than
large hydroelectric power plants.” Other recommendations for the CEC
include ensuring that publicly-owned utilities meet the same RPS
targets for eligibility and compliance required of investor-owned
utilities; that a joint proceeding be developed to provide a
“simpler and more transparent” RPS process by the end of next year;
closer monitoring of the 2005 renewable procurement cycle to
determine the potential value of greater contract standardization;
and development of new standardized contracts for wind repowering
projects to “more efficiently harness wind resources and reduce bird
deaths.”
In 2004, 10.2% of California’s electricity came from green power
sources, excluding large hydro, and the CEC estimates that the state
has near-term economic potential for an additional 6,000 MW of
renewables which, if developed, would nearly double California’s
renewable generating capacity.
Significant wind energy increases the need for controllable
generation but increasing the amount of solar energy in the mix
allows load swings to be “almost completely mitigated because of the
high correlation between electricity production and load,” it
explains. Southern California Edison recently signed a 20-year power
purchase agreement for a 500 MW solar project, while San Diego Gas &
Electric also announced plans for a 300 MW solar project which will
“help address the impacts of integrating a large volume of wind into
California’s system while roughly tripling U.S. solar electric
generating capacity.”
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