California lawmakers have set a goal of relying entirely upon zero-emission energy sources for the state’s electricity by 2045. The bill requires that 50 percent of California’s electricity be supplied by renewable resources by 2025 and 60 percent by 2030, and 100 percent “zero-carbon” electricity by 2045, which can include nuclear power. Scientists, however, debate whether 100-percent zero-emission energy is feasible without cost-efficient storage technologies or new technological advances.
Nuclear and Gas Energy in California
Despite nuclear power being zero-emission and allowed under the 100-percent zero-emission energy requirement for 2045, California has been retiring its nuclear plants. The San Onofre units have recently been retired and the California Public Utilities Commission has approved the closing of the Diablo Canyon units by 2025. Because nuclear power cannot be ramped up and down quickly to back up solar and wind plants when the sun is not shining or the wind is not blowing, it is not the best back-up for solar or wind power. Natural gas plants currently provide that backup power and provide about a third of the state’s electricity. Many of those gas plants have been recently constructed and would be retired and replaced with enormous batteries under a zero-emission goal. As a result, customers would have to pay for both the stranded plants and the batteries, which will need to be replaced periodically.
According to the Clean Air Task Force, a Boston-based energy-policy nonprofit, achieving a 100-percent zero-emission energy target in California with mostly wind and solar power would require 36.3 million megawatt hours of energy storage. That compares with 150,000 megawatt hours of storage currently available in the state including pumped-hydroelectric facilities. Therefore, California would need to install more than 200 times as much energy-storage capacity than it has now to make up for the loss of the natural gas plants. That storage capacity would back up 1,200 new solar plants, 25,000 wind turbines, plus a smattering of geothermal, tidal, and wave energy generators that would be needed to meet the 2045 goal.
California’s Renewable Energy
According to the California Energy Commission, 32 percent of retail electricity sales in California were powered by renewable sources last year, making it fairly easy for the state to meet its 33 percent renewable goal by 2020. Because wind and solar power—the renewable sources mostly being built to comply with state renewable portfolio standards—are intermittent sources of energy, they do not produce power when Californians need it most, mainly in the evening. At other times, wind and solar generation can exceed demand, forcing California to export the excess power. In fact, California has paid Arizona to absorb excess power generated by wind and solar plants rather than disrupt the energy grid.
California’s Electricity Rates
Since 2013, California’s electricity rates have increased 25 percent and are the highest in the continental western United States and twice as high as in nearby Washington state. Rates have increased due to the cost of building new renewable power plants and the transmission lines needed to move the electricity from solar and wind farms to the grid. Most large-scale solar and wind farms are located in rural regions and require additional transmission lines to get the power to consuming areas.
Rates have also increased due to state mandates and subsidies. Earlier this year, California became the first U.S. state to mandate solar rooftop panels on almost all new homes, driving up the cost of new homes. California also has a net metering policy where consumers that install solar panels are paid the retail power rate for the excess electricity that they sell back to the grid. This policy increases the costs for other electricity users, who must pay for the transmission and distribution charges that solar home and business owners avoid despite using those wires when they sell their excess electricity to the grid.
Under the 2045 mandate, the costs of the new solar plants and wind turbines and batteries and grid updates will need to be covered by utility companies, who will pass the costs on to consumers.
German and South Australian Experience
Battery technology to back up wind and solar power has been used in Australian state of South Australia, where power outages have occurred due to insufficient grid-connected power to back up the region’s wind and solar units that generate almost 40 percent of its electricity. The South Australian government contracted with Tesla to build a battery the size of a football field that could power 30,000 homes for an hour to provide backup power in emergencies. Australia’s battery owners were paid 79 cents per kilowatt-hour—about 10 times the wholesale cost of power in the United States—to absorb surplus energy from the grid. Later, when the power is sold, generally at a premium during shortages, customers get charged again.
Germany is another example of how renewable mandates increase the cost of electricity. Germany has a target for 65 percent renewable electricity by 2030 and 80 percent by 2050. Residential electricity prices in Germany are more than double the U.S. average (about $0.34 per kilowatt hour, compared to a U.S. average of $0.13), mainly because of its renewable requirements. More than half of what Germans pay for electricity are surcharges that include surcharges to pay for state-mandated subsidies for renewable energy.
California Governor Jerry Brown also issued an executive order calling for statewide carbon neutrality by 2045, which means that the state will remove as much carbon dioxide from the atmosphere as it emits, and after 2045, negative net greenhouse gas. According to the governor, achieving 100-percent carbon-free power means California will need to increase its ability to store power from unpredictable sources like wind and solar, to become part of a multistate energy grid, and to put millions more electric cars on its roads because most of the state’s carbon emissions come from the transportation sector. The state will also need to increase efficiency and adjust energy use to when there is the most power available.
The California lawmakers believe that the bill and the executive order will put California on a path to meeting the goals of the Paris Agreement. However, California’s low-income residents will suffer the most from the bill and the executive order since they spend more of their income on energy and live in hotter inland areas where more electricity is required for cooling.
California can expect, like other places that have adopted ambitious renewable portfolio standards, to see a large increase in the cost of its electricity in exchange for uncertain benefits. If wind and solar are the energy sources of the future—with reliability and low costs—the market would be able to determine that without the need for subsidies and mandates.