Senate Bill 584, the California Renewables Portfolio Standard Program, introduced by state Senator Kevin de Leon, would reformulate the calculations for how much energy California would receive from renewables while eliminating fossil fuels. Senator de Leon wants to amend Section 399.11 of the Public Utilities Code relating to energy that currently states by December 31, 2030, California would have retail sales of renewable energy at 50 percent. Under the senator’s bill, California would have 100 percent of energy only from renewables. Currently, the U.S. receives around 10-13 percent from renewables, according to the Energy Information Administration (EIA), and sees that figure only reaching 21-26 percent by 2050.
With California it’s more severe than in other parts of the country for how much renewable energy is required for consumers and business, because the California Renewables Portfolio Standard Program already states:
“The Public Utilities Commission to establish a renewables portfolio standard requiring all retail sellers, as defined, so that the total kilowatt hours of those products sold to their retail end-use customers achieves benchmarks of 25 percent, 33 percent, 45 percent, and 50 percent.”
California already has some of the highest electricity rates in the country, and passing this bill would only exacerbate the problem while sending more companies and jobs to other states or overseas. There is a direct correlation between higher business costs (electricity being a large cost) and business relocation. Why is Senator de Leon risking this happening by upping the cost of electricity when even the EIA says a large, fully-developed economy – that is California – will have a difficult time thriving and keeping middle class families and workers with skyrocketing energy costs? Not to mention we owe trillions in outstanding debts.
Believing renewable energy is scalable, and not downtrodden when intermittent weather occurs, while having excess energy storage issues follows the same misguided policies guiding electrical vehicles. Where even with generous tax credits and beautiful vehicles built by Tesla and all major car manufacturers has still only allowed EVs to capture roughly 1 percent of worldwide car sales.
But there are even bigger problems with renewables, and this bill that need to be ascertained by Senator De Leon, Governor Brown and other advocates for turning California into a 100 percent renewable energy state. Internationally, we are seeing that countries that attempt to do away with fossil fuel realize they can’t. A great example is the U.K., which in 2016 saw oil production gains for the second straight year. Not coincidentally the U.K. also saw the best economic growth in the world per these gains in 2016. There is direct causation between oil, natural gas, and coal production linked with economic prosperity for all sectors of society.
The facts about renewables are the issues that need to be overcome before proceeding forward with SB584. According to the BP 2016 Statistical Review of World Energy – the most popular forms of renewable energy – wind and solar accounted for less than 2 percent of world energy consumption. The U.S. electrical grid will have to be completely updated and overhauled, costly trillions of dollars, because The American Society of Civil Engineers gives the U.S. grid a D+ grade in every category of electrical use. Without a state-of-the-art grid that can handle spikes and fluctuations in energy that renewables create and cause (particularly wind and solar) then California will have blackouts and expenses worse than previously experienced in the early 2000s.
During the recent rain and snowstorms that were unprecedented that is when some of the biggest energy needs occur that renewables can’t handle. Natural gas is a flexible fuel, along with coal and oil (WTI & Brent), but all forms of renewables need a fossil fuel backing them up. In other words what SB584 doesn’t address is reliability and the costs to the grid compared to fossil fuels. Beijing, China recently switched from coal to just coal-based electricity and saw costs rise 100 percent from $200 a month to $300 a month. Renewables will be more expensive than what Beijing experienced.
Moreover, Senator de Leon and legislators agreeing with SB584 need to make sure they are using the correct calculations for Energy Return on Energy Invested or at least consider the overall levelized costs. Boundary issues are relevant to wind and solar but more accurate analysis needs to use “point of use,” because wind and solar need massive changes as described above for them to work on a scalable, statewide basis. Many publications touting renewables don’t calculate this properly, and in some cases could be less than 1:1 energy-to-energy ratio.
Storage isn’t discussed enough either. If you want heat in the winter and cool air in the summer then somehow wind, solar, biomass and hydroelectric have to be stored. For now small amounts can be stored, but for extreme weather, even overbuilding solar farms and wind turbines doesn’t solve the intermittent weather and storage problems that would be caused by SB584.
Some countries such as Sweden, Norway, Finland and Switzerland have large shares of their electricity from all types of energy mixes, but even that is deceiving. The BP Statistical Review confirms these four countries have high proportions of their energy from multiple sources, but each country has low populations and significant hydroelectric supply. Currently, as an example, the Oroville Dam is old, decaying and giving away to torrential rains; therefore, would the legislature be willing to appropriate billions towards new dams and maintenance of old ones to up California’s percentage of hydroelectric? So far the answer seems to be no for environmental reasons. The EIA (source: Gail Tverberg, OurFiniteWorld.com) has also confirmed that hydroelectricity deals with the problems of intermittency, reliability, scalability and storage – the same as all other renewables.
What California needs to decide in their quest for a 100 percent renewable energy portfolio are how much consumers are willing to pay in their quest for energy parity? Californians can only purchase what wage growth predicates, and if the cost of a commodity increases (energy) then wages, though rising, aren’t keeping up with the cost of living or doing business. Peak energy is a myth, and there is more oil and gas than the world can fathom. Thus energy demand comes not from a lack of supply but from a lack of affordability, seen from the Beijing example.
Rising costs don’t translate necessarily into a more prosperous society. What SB584 doesn’t take into account are what happens to fossil fuel companies that still have to pay interest on loans, continuing retirement benefits for workers and pipelines that have to operate for 365 days a year. The question isn’t renewables versus fossil fuels or vice versa, but the question is whether California is willing to pay for two systems of electricity. There’s the rub, and more than likely, unless you can afford higher electricity costs, the state will see more businesses and middle class families along with their taxes, leave the state.
Todd Royal is an independent public policy consultant focusing on the geopolitical implications of energy based in Los Angeles, California.