California CARB Math

California CARB Math:  How 33% Really Gets You 57% RPS

Let’s see—the Governor is termed out and the election draws near for his replacement.  His executive order requiring 33% renewable portfolio standards by 2020 will sunset with him. The State Legislature failed to enact the 33% requirement into law.  The looming November election has a ballot measure to suspend AB32 until unemployment falls to 5.5% for four quarters.

But that is not stopping the California Air Resources Board from adopting new regulations to require pushing forward to put the 33% by 2020 rules into effect anyway.

“The Renewable Electricity Standard means cleaner energy for California’s households and businesses.  It will help clean our air and bring new solar and wind energy facilities to California with thousands of jobs in construction, operation and spin off industries.  This standard is going to further diversify and secure our energy supply while also growing California’s leading green technology market, which will lead to cost savings for consumers.” —-CARB Chairman Mary D. Nichols.

California leads the nation in renewable energy production and prides itself in being a pace setter for responsible, clean energy policies.  Some of them have worked spectacularly well such as the California energy efficiency standards on appliances and electronics which today result in energy intensity in California at 50% of the national average.  If the rest of the US would follow California’s lead in this one area the reduced greenhouse gas emissions would likely achieve all the targets Waxman-Markey sought to achieve WITHOUT the draconian carbon taxes and other market intrusions.

But I digress. . .

The California goal is not just to hit a home run with its renewable portfolio standard of 33% RPS, it is to hit a grand slam by pancaking that 33% requirement on top of the existing large scale hydropower production in California and the output from its two nuclear power plants while not counting either toward compliance because doing so would be oh so politically incorrect.

Here’s the CARB math:

  • 13.5% : Actual RPS Achieved To Date. California already gets nearly 13.5 percent of its electricity from renewable sources, not counting it large hydropower and nuclear power facilities that cannot be counted toward any of the renewable energy requirements
  • 14.9% : But Don’t Count California Nuclear. California’s two nuclear power plants account for about 14.9 percent of total generation.
  • 9.6%: And Don’t Count Large California Hydropower. Large California hydro which do not count toward RPS provide 9.6%.
  • 38.0%: Total Existing California Clean Energy Production in 2010

So according to CARB math California still needs an additional 19.5% beyond its current 13.5% actual renewable energy in place to achieve its goal of 33% of electricity consumption from renewable compliant sources by 2020 because the existing large hydro and nuclear output don’t count.

When you do the REAL MATH about clean energy production that does not produce greenhouse gas emissions as is the intended purpose of AB32 California is already generating about 38% of its electricity from clean sources.  By requiring that the current 13.5% of compliance renewables grow to 33% of compliance renewables California would produce a whopping 57% of its electricity from clean energy sources.

With a modest change in the definitions, California could declare clean energy victory and celebrate its 38% achievement.  But that is not going to happen in the Golden State.

But there is a problem no one wants to discuss about the 33% RPS goal.  That problem is the regulatory process for siting, permitting and the NIMBY process delays in getting approvals means it is unlikely that that much additional renewable energy generation can be built in California by 2020 beyond what is currently in the pipeline.  That assumes of course that developers can get financing and access to capital and the economy continues its slow recovery.  A more robust recovery would actually make it worse requiring utilities and regulators to face a Hobson’s choice of building more fossil fuel plants likely natural gas combined cycle on existing sites since they are faster, bigger and cheaper than renewable energy.

And there is one additional inconvenient truth in this green strategy that has the true believers seeing red—it does not go far enough!

CARB is ‘fudging the formula’ by allowing utilities to achieve these substantial additional RPS targets by buying renewable energy credits instead of actually building or procuring the renewable energy itself to deliver to customers.  This is a change in California policy which previously has required this renewable energy to be produced inside California.  This new CARB policy has the Union of Concerned Scientists complaining that this sleight of hand means that California will take credit for achieving its ambitious renewable energy targets by counting the renewable projects built outside the state.

“California does not get any power for that (energy credit) purchase so we get no greenhouse gas reduction, no air quality improvements and no clean energy jobs.  But utilities still have to provide electricity to customers and that could still come from fossil fuels.”—Laura Wisland, Clean Energy Analyst, Union of concerned Scientists told Associated Press.

That change in policy to allow utilities to buy RECs  is the only glimmer of market reality in the new CARB policy.  So now it is up to the voters.  If Proposition 23 is adopted all of this CARB effort will become difficult to enforce and the 33% RPS standard will ride back to Hollywood with the Governator.

Twenty percent (20%) is the California RPS law in place today and that is achievable.  Add to that the 14.9% nuclear and 9.6% large hydro already in place and California can expect to have a market leading 44.5% clean energy portfolio by 2020 that would be the envy of the Nation.  No more subsidies.  No more new regulations.

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