Renewable Energy is the Centerpiece
of California's Climate Response
Raising the state's portfolio of renewable energy generation to 33% can result in net savings for ratepayers while expanding transmission capacity and insulating the state from rising energy costs. And we should start today.
CRS Communications Director
SAN FRANCISCO (November 21, 2008) — The Center for Resource Solutions (CRS) applauds California Governor Arnold Schwarzenegger's new executive order to ensure that Californians make maximum use of clean, renewable energy as part of the state's actions to reduce greenhouse gas emissions and address climate change. Gov. Schwarzenegger Monday declared that electric utilities and other electricity providers in the state should meet a 33 percent Renewable Portfolio Standard (RPS) by the year 2020. The current RPS calls for 20 percent of energy deliveries coming from renewable energy by 2010.
"Although this is an ambitious goal, the 33 percent mandate is entirely achievable," observed Arthur O'Donnell, CRS executive director. CRS previously advised California's regulatory agencies on what steps needed to be taken to make this higher RPS commitment a reality. "Many of the obstacles remain," O'Donnell noted, "but in recent months, regulators and utilities have made great advances to remove the barriers to implementation."
Chief among these is a proposed decision before the California Public Utilities Commission (CPUC) that will for the first time allow regulated utilities to purchase unbundled renewable energy certificates (RECs) from outside state boundaries as a means of meeting their RPS mandates. The proposed order, set for CPUC approval in December, will open the door to the use of RECs from qualified renewable power generators that are part of the Western Renewable Electricity Information System (WREGIS).
CRS studied the conditions needed to achieve a 33 percent RPS as part of the Governor's climate action goals in advance of the of 2006's landmark AB32 legislation. In the study Achieving a 33% Renewable Energy Target, subsequently accepted by the CPUC, CRS found that not only was a higher RPS a realistic option, but that it could be achieved at minimal additional cost.
"Since that report, the huge fluctuations in prices for non-renewable fuels, like natural gas, have further demonstrated that use of renewable electricity is an excellent price hedge and a bargain compared to the costs of failing to meet the climate challenge," O'Donnell noted. More recent studies by the California Energy Commission and the CPUC have confirmed the feasibility of the Governor's goal and outlined in greater detail the steps needed to make a 33 percent RPS a reality.
Findings and Policy Recommendations from Achieving a 33% Renewable Energy Target:
It is economically and technologically feasible to achieve a 33% RPS in California by 2020. A 33% RPS is likely to result in net savings to California's electricity customers over a twenty year period.
Using the best information available at the time, the study projected that, a 33 percent RPS would result in a small negative ratepayer impact in the first decade that would be more than offset by longer term ratepayer benefits over ten years in the 2021 to 2030 timeframe.
Since the report, fossil-fuel prices for electricity generation, particularly for natural gas, have continued to fluctuate beyond the original conservative pricing assumptions, furthering the cost savings and price-hedging benefits of renewable energy.
While CRS initially recommended that the 33 percent goal be written into law and that regulators adopt enforcement penalties against utilities and energy providers that fail to meet the standards, the Governor's executive order represents a major step forward in formalizing California's commitment to the most aggressive RPS in the nation.
Accessing California's renewable resources to meet a 33 percent RPS will require expanding transmission capacity, increasing system operational flexibility, and changes to tariffs and rules governing use of the transmission system.
The report listed several policy imperatives that require coordination among several regulatory agencies and operational bodies that share jurisdiction over transmission at state, regional and federal levels:
• Develop electric transmission capacity for renewables ahead of renewable generator interconnection requests.
• Adjust the transmission planning and expansion process to better reflect state policy for renewable resources.
• Establish designated transmission corridors
• Form additional stakeholder study groups for transmission projects in important renewable resource areas
• Reduce the risk associated with developing new transmission facilities.
"Thankfully, California and other players have begun to address these transmission essentials but much work still needs to be done," O'Donnell added. Key to success will be finding the proper balance of environmental trade-offs to allow new high voltage transmission lines to reach the areas of planned renewables development in the Tehachapi Mountains, the Imperial Valley and beyond into the Desert Southwest.
A significant advance is the recent draft report from the Renewable Energy Transmission Initiative (RETI) that ranks proposed development areas and transmission corridors by their likely environmental impacts, available at http://www.energy.ca.gov/reti/index.html.
A federal process for designating transmission corridors for electricity is in the works, as is a Western Governors' Association initiative for Renewable Energy Zones in the West, available at http://www.westgov.org/wga/initiatives/wrez/index.htm.
About Center for Resource Solutions
The Center for Resource Solutions (CRS) is a national nonprofit with global impact. CRS brings forth expert responses to climate change issues with the speed and effectiveness necessary to provide real-time solutions. Its leadership through collaboration and environmental innovation builds policies and consumer-protection mechanisms in renewable energy, greenhouse gas reductions, and energy efficiency that foster healthy and sustained growth in national and international markets. For more information about its programs, visit www.resource-solutions.org and www.green-e.org.