What we can learn from California’s energy experience

How California is transforming energy (and where it could do better)

by Allen Best

California climate policy has been far reaching. I was elbow to elbow with the evidence Tuesday night at the Alliance Center in Denver.

Next to me in the audience was Tom Vessels, who has a company, Vessels Coal Gas. He put together the deal to capture methane escaping from a coal mine in west-central Colorado, near the hamlet of Somerset. The methane is burned to produce electricity purchased by Holy Cross Energy. Because it reduces emissions of a greenhouse gas, the electricity generated in this way has a higher price than other power purchased by the co-operative, at least in the short term.

But what made the project work financially, Vessels told me, was the money he makes from California’s cap-and-trade market. The market delivers money to efforts to reduce greenhouse gas emissions. Methane dissipates rapidly in the atmosphere, but before it does, it traps heat far more efficiently than carbon dioxide, 84 times more over a 20-year period.

Vessels flares the methane coming from the coal mine not used to generate electricity, reducing it to carbon dioxide. It’s still a greenhouse gas, but a less potent one. This action in Colorado is a direct result of California’s intent to provide answers to address global climate change. In the absence of action in Washington D.C, California has been making things happen. If other states have also had notable successes,  California deserves special attention.

At the Alliance Center, Scott Anders outlined the history and results of California’s various laws, rulings and gubernatorial executive orders beginning with the 2005 adoption of Assembly Bill 32, called the Global Warming Solutions Act. Anders, who directs the Energy Policy Initiatives Center at the University of San Diego School of Law, suggested that the law’s title reveals not only California’s ambitions but also suggests the state’s perceived self-importance.

“It is a very large state and has a very large economy, sixth largest in the world. We actually call ourselves a republic,” he said, while showing a picture of the California flag. In December, when climate scientists met in San Francisco, Gov. Jerry Brown told them: “If Donald Trump turns off the satellites, California will launch its own damn satellite.”

The path

California has defined a path with mileposts: 1) Reduce demand. 2)  Decarbonize the electrical supply. 3) Electrify transportation. 3a) Shift existing natural gas loads, such as for home heating, to electricity.

The first major goal arrives in 2020, when the state is to have reduced emissions to the 1990 baseline. “2020 is basically tomorrow, but we’re basically there,” said Anders.

If the work so far has been like the beginner slope of a ski area, the next goal, a 40 percent decline by 2030, looks like a ski run steep enough to avalanche. It doesn’t get any less steep from 2030 to 2050. By then, California hopes to have reduced greenhouse gas emissions 80 percent compared to 1990 baseline.

California has already embraced significant amounts of renewables, about 43 percent, with a goal of 50 percent by 2030. The 2030 goal also calls for doubling the efficiency in end uses through upgraded standards for buildings and appliances and ramped up efficiency programs.

Use of fossil fuels for transportation, which represents 37 percent of current greenhouse gas emissions, should be halved, according to this projected timeline. To spur this, the state has a goal of 1.5 zero-emission (at the tailpipe) vehicles by 2025, and had achieved about 650,000 such vehicles already. Also nudging that work are low-carbon fuel standards, and strategies to reduce travel.

Congress rejected a cap-and-trade system for emissions reductions in 2009, but California went ahead on its own. That, again, is evidence of California’s tendency to act kind as it were its own, Western European-style country. It is having effects, witness the flaring of methane from the coal mine in western Colorado. That flaring is rewarded with money created for carbon offsets under California’s cap-and-trade program. California also wants to bear down on emissions from oil refineries. Improving sustainability of freight transportation is also another target.

Solar has made giant strides in California. The state leads the nation in installed solar capacity, with 4.7 million homes powered by solar, according to the Solar Energy industries Association. That same report says that solar, both from residential roof-tops and giant utility-scale solar installations, such as in the Mojave Desert, now provide 13.5 percent of the state’s electricity. New records for solar generation increase almost daily.

California altogether now has 5,096 megawatts of solar capacity. In comparison, the three giant coal-fired Comanche power plants at Pueblo, Colo., together can generation a maximum 1,410 megawatts.

Duck curve

But this solar surge also poses problems. During mid-day, solar collectors provide great quantities of electricity, but other fuel sources must rapidly ramp down and then ramp up. This is called the duck curve. “They are significant ramps, and this will get worse,” Anders said. It’s not insurmountable, but it must be dealt with to ensure grid stability.

One response is to expand the grid beyond California, to share the renewable energy with others (and presumably get renewables, such as wind farms on the Great Plains, that tend to deliver electrons during the evening).

Another response is to ramp up energy storage. In 2010, The California assembly ordered the state’s three big investor-owned utilities to add 1.3 gigawatts of energy storage to their grids by 2020. That kind of large-scale storage doesn’t exist today, beyond pumped hydro. But again, California is largely leading the way. Responding to the mandates, San Diego Gas & Electric in February unveiled the world’s largest lithium-ion battery energy storage facility.

Will energy storage hew to the same cost-reduction curve as solar? From 1998 to 2014, prices declined from about $12 per kilowatt of installed generating capacity on residential homes to about $4. It’s even less for non-residential, including utility-scale installations. In that same 16-year time span, San Diego went from just one roof-top solar system then to 100,000 today.

California’s experience also illustrates a dipsy-doodle curve for adoption of new technology. A rapid rise of inflated expectations at the outset is followed by a trough of disillusionment. This is followed by an upward slope of enlightenment and, at last, a plateau of productivity.

Several years ago, California had a peak of inflated expectations about the rapid adoption of electric cars, and is now disillusioned although perhaps emerging into enlightenment about what constitutes realistic expectations. Energy storage is now in that peak of inflated expectations, he said in a follow-up interview.

Anders said California’s policies have had mixed results. Price incentives for adoption of renewables have worked, but net metering has had more mixed results. Legislators should not try to directly get involved in markets, as California legislators did when they capped residential electric rates in the wake of the Enron fiasco of 2001. And California’s various programs and laws altogether constitute what one document describes as a jungle. Other states, starting from scratch, might wish for a more simple system. “Nonetheless, despite the complexity, we’re still getting a lot of renewables,” he said.

A lingering complaint is that disadvantaged communities are not being enabled to take advantage of the energy transformation the way that middle class and wealthier communities can. There’s also the question of whether programs deliver local benefits, such as discernibly improved air quality.

None of this seems to be easy, as was illustrated by another speaker, Hillary Hebert, the policy and strategy manager of San Diego Gas & Electric, described the need for investment of time in public outreach. She also alluded to the great complexities that even among energy professionals take time to sort through.

Vessels asked perhaps the most interesting question in the Q&A period: What is the most cost-effective way to reduce greenhouse gas emissions?

Hebert pondered at length then said: “Energy efficiency is where my mind goes.”

Anders added a story to that response: Asked why he robbed banks, Willie Sutton is said to have replied: “because that’s where the money is.” That’s the same thing with energy efficiency, said Anders. That’s where the payday is.

Go here if you want to watch a video of the presentation. Charts used in this presentation courtesy of Scott Anders’ PowerPoint presentation. They can be seen in full here: UC Denver Law_3-7-17 Those of Hillary Hebert can be seen here: SDGE Sustainability Series Presentation (Final)

 

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About Allen Best

Allen Best is a Colorado-based journalist. He publishes a subscription-based e-zine called Mountain Town News, portions of which are published on the website of the same name, and also writes for a variety of newspapers and magazines.
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