Renewables Have Glaring Obstacles to Overcome for California

Solar panelsBloomberg is now reporting that solar energy is cheaper than coal, and could become the lowest form of energy within a decade. Economies of scale are causing solar to drop from an average of $1.14 a watt all the way to .73 cents per watt by 2025. This should be great news for California’s overwhelming embrace of renewable energy.

Agencies such as the U.S. Department of Energy’s National Renewable Energy Lab to the International Energy Agency all confirm this decline in costs. Capacity for solar is doubling causing lower costs for bank loan premiums and manufacturing capacity in the solar energy space; and now with Tesla’s gigafactory opening, the cost of batteries is also expected to drop for electric vehicles and home battery systems.

China also plans to invest over $360 billion on renewable energy and fuels to help decrease their serious smog issues. Unsafe, coal-fired power plants are currently suffocating that country’s air supply. And California can feel the affects of China’s crippling smog depending on seasonal wind patterns.

California could be entering a new era in energy, and an era renewable investors and environmental advocates have been touting this century. Unfortunately they are overlooking glaring weaknesses, and for renewables to truly breakthrough into a low-cost, scalable energy along the lines of coal, oil and natural gas numerous obstacles such as costs, back-up generation power, storage and grid modernization will need to be solved.

Gov. Brown, the California Legislature and the California Air Resources Board need to understand the true costs and limitations at this time when using renewable energy.

Yes, costs are possibly going down for solar and wind, but is that truly the case? And while costs for manufacturing and kilowatts per hour are dropping that isn’t the final costs when it comes to renewables. The BP Statistical Review of Global Energy in 2015 showed renewables provided only 2.4 percent of total worldwide energy needs, hydroelectric power generated 6.8 percent and nuclear came in at 4.4 percent. California citizens and businesses need clean fuel, and at this time renewables can’t provide that for them.

Moreover, no matter how much renewables are touted as a replacement for fossil fuels, and even with positive economies of scale, they still will not overtake coal, oil and natural gas in the near future even with AB32 and SB32 in effect.

Weather is the biggest hindrance for both solar and wind, but not as much for biomass or hydroelectric – though hydroelectric, or the process of damning water for electric use, can run into serious environmental issues. But if the sun isn’t shining and the wind isn’t blowing then solar and wind become difficult to use without fossil fuels – particularly natural gas and coal-fired power plants – backing them up. Additionally, batteries have not caught up to enhanced storage for renewables, and they aren’t productive enough for entire California cities, counties and the state at-large.

When looking at the total cost of renewables versus fossil fuels there really isn’t a comparison in the near-term future because wind and solar can only generate intermittent electricity. Fossil fuels can run without backup supplies, and then factoring in levelized costs for renewables makes them under-productive and more expensive as a wide-scale energy source for California.

As much as California continues using renewables it still hasn’t been achieved without fossil fuels backing them up. The Energy Information Administration’s Annual Energy Outlook 2017 to 2050 (page 13) only has renewables at 18-26 percent penetration by 2050 in the United States. The equivalent of not understanding the facts about renewables are how electric vehicles currently only have 1 percent of the market and are projected to only have 6 percent by 2040, but are highly touted as being able to replace the combustible engine vehicle.

Energy storage and grid modernization are separate issues for California policymakers to understand, yet the two issues are linked together in many ways. How energy is stored from fluctuating renewable sources (wind and solar) are needed to accommodate, “multiple grid services, including spinning reserve and renewables integration.” To improve the problem of intermittent generation for resources such as wind and solar the EIA recommends:

“Examine the potential for transmission (grid) enhancements to mitigate regional effects of high levels of wind and solar generation while developing higher resolution time-of-day and seasonal value and operational impact of wind.”

Further, the EIA also perceives utility rate structure for different levels of photovoltaic solar generation being needed to control costs for consumers and industry when using renewable energy. What the EIA is saying is that renewables fluctuate in power generation based upon different weather patterns, which causes the grid to fluctuate. These upward grid spikes are then passed on in higher electricity costs to utility’s customers. It is one of the reasons California has some of the highest energy costs in the United States due to its heavy reliance on renewable energy.

The most important component in the entire process of renewables overtaking fossil fuels for a cleaner future is grid modernization. According to T. Boone Pickens, “The electrical grid of the future will have to be built,” for renewable energy to overcome the above-mentioned hurdles. With California’s exploding pension costs it is difficult to envision a brand new, multi-trillion dollar grid being built in the near future.

Renewable energy has incredible potential for California, but until power grids are modernized renewables will lag behind fossil fuels through rising costs and unstable energy delivery. California’s electric grids can’t handle millions of electric vehicles, varying, spiked energy from wind and solar and the ability to be flexible the way a natural gas power plant is at this time. The best power plants for energy efficiency and lowering carbon emissions while keeping costs reasonable are natural gas. A natural gas-fired power plant is the biggest reason coal is losing market share in the United States.

Majorities of Californians want renewables to be the number one source of energy in our state’s portfolio for cleaner air, water and a healthier environment. But instead, renewables like electric vehicles have taken on a fad-like quality without the technology having caught up to the hype. CARB needs to look at the facts, and not the emotions that currently lead the renewable energy debate. Let’s not pit renewables against fossil fuels, but look to incorporate the different energy sources into what’s best for California and the United States.

Todd Royal is a geopolitical risk and energy consultant based in Los Angeles.

California’s cap-and-trade faces tough questions

As reported by the Sacramento Bee:

California’s marquee climate-change program faced tough scrutiny on Tuesday from a state appeals court judge who seemed skeptical that the $4.4 billion raised from the state’s cap-and-trade program complied with laws regulating taxes and fees.

“Where does this end?” Associate Justice Harry Hull asked state lawyers at a hearing in a long-running lawsuit that challenges the state’s ability to collect revenue from the cap-and-trade auctions it has sponsored since 2012.

Despite Hull’s questioning, two of three justices at the 3rd District Court of Appeal appeared to be leaning toward upholding the California Air Resources Board’s greenhouse gas cap-and-trade program. It aims to gradually reduce greenhouse-gas emissions over time by compelling industries to change the way they do business under the authority of the landmark 2006 law, Assembly Bill 32.

A decision from the court is expected within 90 days, but the losing side likely will appeal the case to the state Supreme Court.

Hold Climate Change Policy-Makers Accountable for Economic Consequences

Global WarmingIn reaction to the election of Donald Trump, California’s governor, state Legislature and Air Resources Board have made clear their intention to double down on our state’s already strictest-in-the-nation climate change policies.

Making such claims is easy when ignoring the current cost burden of the state’s climate policies on consumers and businesses, and how much more the costs will skyrocket under increasingly high greenhouse gas reduction targets.

Unelected bureaucrats at the California Air Resources Board have resisted any legitimate attempt at conducting a comprehensive economic analysis of AB 32, the state’s landmark 1996 global warming law– either during the rulemaking process or once the regulations took effect. CARB is attempting more of the same with the newly established 2030 40 percent emissions reduction target.

The significant consequences of this one-sided approach are being ignored as part of the policy and regulation development process. These rules will have real-life cost impacts on every major industry in California and every resident, who will see higher prices for food, electricity, gasoline, housing and just about all the necessities of life.

Higher costs, in addition to increasing consumer prices across the board, make California businesses less competitive with out-of-state companies. These have already resulted in a sharp decline in jobs, notably well-paying blue-collar jobs in the manufacturing, oil and gas and construction sectors, and a concurrent loss of tax revenues that support education, public safety, and social service programs.

It doesn’t have to be this way.  Sacramento lawmakers should demand that state agencies like CARB conduct objective economic analyses in order to craft balanced climate change regulations that will not exponentially increase costs on California’s businesses and families — especially those in lower income communities, which pay a larger share of their income in energy and transportation costs. Any increases created by new regulations will disproportionately impact those families who can least afford it.

Independent studies and subject matter experts have waved a warning flag about the economic impact and its burden on families and businesses. A recent study has shown that our climate change agenda will increase costs by $3,000 per year for every family in California. The Director of Stanford University’s Precourt Energy Efficiency Center has cautioned that achieving the new 2030 goal would likely entail “large economic costs,” and lead to a “less diversified and more fragile state economy.”

CARB has initially estimated that its new regulations could cost 100,000 jobs and result in the loss of up to $14 billion in gross economic output, which the agency brushes off as relatively immaterial in the context of the state’s overall economy.

Among regulatory initiatives being considered in CARB’s recently updated AB 32 Scoping Plan are: forcing higher density of commercial and residential developments; developing “pricing mechanisms” such as road user/vehicle miles traveled-based pricing, congestion prices and parking pricing strategies; creating expensive multiple “incentives” to make electric vehicles artificially more affordable than conventional vehicles and imposing arbitrary and unrealistic quotas for market penetration; and forcing decreases in the use of affordable, widely available fossil natural gas. These and other proposed mandates will significantly increase the cost and availability of housing, electricity, gasoline and diesel fuel and the cost of manufacturing and transporting goods produced in California with a chilling effect on jobs and revenues.

California can do better. Sacramento legislators have an opportunity to provide essential oversight over a regulatory body to ensure their constituents and the businesses they represent are not unduly burdened. It’s important to note that because California generates less than one percent of worldwide greenhouse gas emissions, which know no boundaries, the hardships our state’s climate policies impose on its people and economy have little more than symbolic value.  This is why CARB must conduct a comprehensive economic analysis now, to weigh how aggressively we should get ahead of other states or nations with regard to climate policies.

Executive Director of the Industrial Association of Contra Costa County

This piece was originally published by Fox and Hounds Daily

Carbon tax program sputters again

As reported by the Sacramento Bee:

When California launched its cap-and-trade program four years ago, the unspoken fear was that the price of carbon emissions credits would soar out of sight and bankrupt manufacturers and other industries forced to buy them.

Now cap and trade, a crucial piece in California’s war on climate change, finds itself with exactly the opposite problem: an excess of credits and insufficient demand. The result is a program that’s stumbling badly and facing an increasingly hazy future in the Legislature.

The cap-and-trade market had another bad day Tuesday, with hundreds of millions of dollars worth of unsold carbon credits left over following the latest state-run auction. Only about 30.8 million credits were sold, each one representing a ton of carbon emissions, out of approximately 96 million credits that went on sale. The auction was held last week, but results weren’t released until Tuesday by the California Air Resources Board.

It was the second straight quarterly auction in which scores of carbon credits failed to attract buyers, although there was higher demand this time around. Last spring’s auction ended with roughly 90 percent of the credits unsold. …

Click here to read the full story

Controversial Carbon Tax Faces Strong Opposition

carbon-tax-1Despite years of success in doing what it was supposed to do — cut emission levels — California’s controversial cap-and-trade system has run up against opposition that could be strong enough to sink it. But with nothing to lose and everything to gain, Gov. Jerry Brown has shifted into political overdrive to save it instead.

Big plans

Through the California Air Resources Board, Brown’s administration has tried to restore confidence among big California businesses that the state’s carbon-trading regime is here to stay. Amendments to the cap-and-trade rules proposed by CARB “envision a carbon market through 2050 with increasing allowance prices,” according to Scientific American. But legal uncertainty has clouded CARB’s ability to promulgate such regulations beyond the year 2020, “thanks to a combination of potentially limiting language in the original climate law, AB32, and a lawsuit challenging the legality of cap-and-trade auctions under a law requiring a two-thirds legislative majority to approve taxes,” the magazine added.

“The amendments released [last month] would establish decreasing emissions caps for covered entities through 2031, to reach 40 percent below 1990 levels, and would include preliminary caps through 2050 ‘to signal the long-term trajectory of the program to inform investment decisions.’ Other proposed amendments would provide for compliance with U.S. EPA’s Clean Power Plan for existing power plants, allocate allowances to businesses in order to prevent emissions from escaping state borders, and streamline how emitters register and participate in auctions.”

Backrooms to ballots

Despite broad support for an extended cap-and-trade system among influential Democrats, whose grip on Sacramento is virtually unchallenged, California’s legislative counsel has sided against CARB on the extension plan. “Meanwhile, a lawsuit from the California Chamber of Commerce charges that the permit fees are a tax and should have required a two-thirds vote in the Legislature to take effect,” as the San Francisco Chronicle reported. “Although the suit has dragged on for nearly four years, questions raised by an appeals court judge in April suggested that he might side with the chamber.”

The ordeal has presented Gov. Jerry Brown with a potentially devastating threat to one of his keystone policies. Although the governor “has been trying to muster support from at least two-thirds of the Legislature, in case the Chamber of Commerce wins its suit, […] convincing Republicans and business-friendly Democrats hasn’t been easy,” the paper added. “And the current legislative session ends Aug. 31.” Beyond the obvious challenge of securing Republican support, Brown must contend with members of his own party, who have split awkwardly on cap-and-trade since before its inception.

“When the law enabling cap and trade was being argued over, the whole progressive left-of-the-left were pretty suspicious of carbon trading,” as Stanford Law energy expert Michael Wara told Wired. “So the law’s authors offered a compromise: the state Legislature would re-evaluate cap and trade in 2020,” the magazine noted. “It didn’t seem like a big gamble at the time.” But Brown’s determination to use revenues from the program to fund his cherished high-speed rail project — according to environmentalists, not the greenest expenditure to choose from — added another political wrinkle.

Now, the prospect of a drawn-out loss in the Legislature has raised speculation that Brown will respond, in a manner somewhat reminiscent of former Gov. Arnold Schwarzenegger, by taking his plans directly to the voters. Preparing for a showdown, Brown has launched — perhaps for the last time as governor — back into campaign mode. “Mr. Brown last week created a PAC, Californians for a Clean Environment, signaling he may turn to voters for support to extend cap and trade and the state’s emissions-reduction goals through a ballot initiative,” the Wall Street Journal recalled. “The program is particularly important to Mr. Brown, as profits help fund the state’s planned bullet train, among other goals by the state’s Democrats.”

Within the Brown camp, however, the official line has remained more optimistic than the ballot preparations might suggest. “There is no state or nation in the Western Hemisphere doing more to curb carbon pollution and our dangerous addiction to oil than California,” said Brown’s executive secretary, Nancy McFadden, in a statement noted by the Journal. “The governor will continue working with the legislature to get this done this year, next year or on the ballot in 2018.”

This piece was originally published by CalWatchdog.com

CARB’s Ironic Quest to Save the Rainforest

RainforestThe California Air Resources Board recently announced plans to dedicate a portion of its hidden gas tax to saving the tropical rainforest. This is ironic because CARB’s own policies actually contribute to rainforest deforestation.

The agency is a strong advocate of a “low carbon fuel standard,” or LCFS. The LCFS is a food-for-fuel program that, along with similar mandates in the European Union and the United Kingdom, is wreaking havoc in the rainforest.

Unlike the national ethanol mandate, which relies heavily on domestically-produced corn-based ethanol, CARB’s LCFS places a much greater emphasis on sugar and soybean-based fuels – crops often produced in tropical nations where rainforests are endangered.

When CARB initially considered adoption of the LCFS in 2008, 27 scientists and researchers submitted a letter indicating the policy could have serious unintended consequences on land use.

Holly Gibbs, a researcher at Stanford University’s Woods Institute for the Environmentstated: “If we run our cars on biofuels produced in the tropics, chances will be good that we are effectively burning rainforests in our gas tanks.”

Noted primatologist Jane Goodall has also spoken out, stating: “We’re cutting down forests now to grow sugarcane and palm oil for biofuels and our forests are being hacked into by so many interests that it makes them more and more important to save now.”

Just a few days ago CARB collected hundreds of millions in hidden gas taxes in an opaque carbon credit auction. However, instead of raising gas prices to save the rainforest CARB could do much more by reevaluating its LCFS program instead.

Eric Eisenhammer is the founder of the Coalition of Energy Users, a nonprofit grassroots organization for access to affordable energy and quality jobs.

Originally published by Fox and Hounds Daily

Brown fuels incentives for alternative-energy cars

Convinced carbon emissions pose an “existential threat” to the human race, Gov. Jerry Brown just signed a set of bills designed to push ahead an environmental agenda dependent on automobiles that don’t run on gas. Among other new rules, regulations and programs, the new legislation set three changes in motion.

Assembly Bill 2013, by Assemblyman Al Muratsuchi, D-Torrance, expanded the sticker program that authorizes drivers of low-emissions vehicles to use High Occupancy Vehicle lanes regardless of whether they carry any passengers. The bill raised the total number of stickers authorized for DMV issuance from 55,000 to 75,000.440px-Electric_car_charging_Amsterdam

Aware of the symbolic political value of statistics, Gov. Brown has sought to use memorable numbers to capture the environmental imagination of elites and the public alike. That approach was evident in an additional bill signed by Brown, Senate Bill 1275, by state Sen. Kevin de Leon, D-Los Angeles; on Oct. 15 he will become the Senate’s president pro tempore.

It officially set a goal of one million zero- or near-zero emissions vehicles on California roads by 2023. In addition to ordering the California Air Resources Board to create a plan to meet the objective, SB1275 required the board to create new incentives for lower-income residents, who are less likely to purchase or lease alternative energy cars or trucks.

To do that, CARB was tasked to expand California’s electric and hybrid car rebate program. First used in 2010, over 75,000 rebates have gone out to Golden State motorists. As the Los Angeles Times reported, CARB will beef up that program by offering extra credit to qualifying “low-income drivers” who choose an electric vehicle.

Moreover, CARB will oversee the installation of new charging stations in selected low-income residential buildings and bolster car-sharing programs in targeted neighborhoods. “Low-income residents who agree to scrap older, more polluting cars will also get clean-vehicle rebates on top of existing payments for junking smog-producing vehicles,” according to the Times.

Beyond cars

Finally, Brown signed off on legislation using CARB to push alternate fuel use for heavier vehicles. That bill, SB1204, was introduced by state Sen. Ricardo Lara, D-Bell Gardens. Its aim is to subsidize the development, purchase and leasing of zero- and near-zero emission buses and trucks, dramatizing Brown’s vision of an overhauled transportation infrastructure for California.

To do that, however, SB1204 authorized $200 million in cap-and-trade fee revenue to be allocated to various incentives for alternate-fuel buses and trucks. In the recent past, Brown came under fire, even from environmentalists, for diverting cap-and-trade funds to his prized but costly high-speed rail project. Although critics have not rallied against the new allocation of funds, Brown’s rival in this year’s gubernatorial race did not hesitate to jump on the move.

“If he was serious about climate change,” Neel Kashkari told the Sacramento Bee, “he would be taking the cap-and-trade revenue and funding basic research at Stanford, at Berkeley, at Caltech, so we develop cleaner technologies that are also cheaper, and we export them around the world.”

A final mission

With Brown’s tenure in Sacramento coming to an end either this year or in four years, his idiosyncratic but dogged approach to environmental issues has taken on the air of a capstone personal project. At this week’s United Nations summit on climate issues, Brown told world leaders that within six months he planned to set new, lower carbon emissions goals for 2030.

AB32, the Global Warming Solutions Act of 2006, mandated reducing carbon emissions by 25 percent by 2020, just six years away.

Realizing his ambitions, Brown said, will take more ambition and more technology, “and will also require heightened political will.”

James Polous is a contributor to Calwatchdog. This piece was originally posted on Calwatchdog.com