A Free-Market Energy Blog

California Energy Update: Part IV

By -- January 30, 2014

• Effort to Expand California Green Power Mandate to 51% Fails
• Will California’s Green Energy Policies Fail Like Germany’s?
• Three Cities Oppose Gas Powered Plants to Replace San Onofre Nuke Plant
• Scientist Says No Reason to Shut Down San Onofre Nuclear Power Plant
• California Drought Means Less Hydropower and Higher Electricity Prices

Effort to Expand California Green Power Standard to 51% Fails

“Amendments made yesterday to state Assembly Bill 177 clarify that the 33 percent by 2020 current Renewable Portfolio Standard (RPS) is intended to be a floor, not a ceiling, for energy procurement. It directs all retail sellers of electricity to adopt a long-term procurement strategy to achieve a target of procuring 51 percent of their electricity from renewable resources by Dec. 31, 2030.”

– State Senator V. Manuel Perez of Imperial County

A key provision in State Assembly Bill 177 sponsored by Assemblyman V. Manuel Perez (Democrat, Coachella), to raise California’s green power mandate from 33% to 51% was opposed by the Large Scale Solar Association, the California Wind Association, ratepayer advocates The Utility Reform Network, and had no support whatsoever from any environmental organization. The reaction may have been driven by the appearance that AB 177 had another agenda: creating a green economy in Imperial County where the unemployment rate still hovers around 26%. Imperial County is in the southwestern corner of California. Its most notable landmark is an agricultural irrigation drain that is so big that it is called the Salton Sea.

A clue to why the proposed increase to a 51% green power mandate failed could be found in Assemblyman Perez’s related measure Assembly Bill 148 – the Salton Sea Renewable Energy Bill. AB 148 seeks to turn the stinky, dead sea into a sort of desert version of Lake Tahoe by establishing the area around the Salton Sea as a green power mecca. The reasons this thinly disguised effort to create a giant green jobs program died was that its political beneficiaries were too geographically narrow, lacked support by big crony capitalists, and didn’t create any patronage for environmentalists.

The prospect of expanding California’s “Renewable Energy Portfolio Standard” beyond the 33% required in 2030 is an idea that won’t go away. If Gov. Jerry Brown and the legislature are ever able to get their High Speed Train Project funded with Cap and Trade funds, such a project might push the green power standard even higher than 33%. When that inevitability comes about will California suffer the fate of Europe’s crashing energy policies mainly caused by expanding the market penetration of renewable energy to a point where solar power became so cheap it was economically infeasible to produce it?

(See more at: http://calwatchdog.com/2014/01/16/push-to-increase-ca-green-power-mandate-flops/)

Will California’s Green Energy Policies Backfire Like Germany’s?

“Despite their ideological attractiveness, intermittent renewables remain the most expensive and least practical mechanism for CO2 abatement.” – Schalk Cloete

This is a question I posed to Schalk Cloete, a chemical engineer and climate scientist who has morphed into an expert on the economics of green power. Cloete is a chemical engineer from Stellenbosch University in South Africa and now a research scientist at the Norwegian University of Science and Technology.

I had an online discussion with Cloete at The Energy Collective website regarding his Jan. 9 article “The Effect of Intermittent Renewables on Electricity Prices in Germany.”

Cloete stated California’s circumstances might help it avoid some headaches and ventured the following qualitative observations:

* The negative impact of solar photovoltaic power should be substantially less severe in California than Germany. Cloete said this is because California solar has a higher capacity factor than Germany. He added, however, “California wind (power) is not very high quality, though.”

* California has cheap natural gas and hydroelectric power that can balance out renewables whereas Germany has to depend on coal power.

* California’s proposed Energy Imbalancing Market will “increase the value of intermittent renewables by lowering their effective penetration” because additional transmission costs and complexity (will) start to outweigh these benefits.” California’s Energy Imbalancing Market is a strategy to buy cheap out-of-state hydropower from federal dams to replace the government-induced high price for natural gas peaker power as a result of shifting to green power.

* This will, however, socialize peak energy prices and privatize off-peak energy prices by “asking people in areas with low/negligible penetration of intermittent renewables to shoulder a substantial part of this cost burden.”

* The Energy Imbalance Market will create a “wealth transfer” from people in areas with low green power market penetration (Texas, Arizona, Utah, Wyoming, Colorado, Montana, North Dakota and New Mexico) to those with relatively higher market penetration (California, Oregon, Washington, Idaho). This may explain why the states of Oregon, Washington, Arizona and New Mexico joined California in the Western Climate Initiative.

* Cloete also thinks California stands a better chance of escaping the European scourge of negative green energy prices if it does not expand green power beyond its present 20 percent penetration to meet its goal of a 33 percent renewable energy standard by 2020.

(See more at: http://calwatchdog.com/2014/01/13/will-ca-green-energy-policies-backfire-like-germanys-did/#sthash.4qZsRb3f.dpuf)

Three Cities Oppose Gas-Fired Power Plants to Replace San Onofre Nuke Plant

Off Peak Power Price: $0.042/kwh
On Peak Power Price: $0.093/kwh
Peak Hour Premium: $0.051/kwh
Source: Western Price Survey, Energy News Data, January 3, 2014

The cities of Encinitas, Del Mar and Solana Beach weren’t singing songs of joy about the proposed re-deployment of combined cycle gas-fired power plants to replace the 2,200 megawatts of power lost from the shutdown of the San Onofre Nuclear Generating Station (SONGS). The San Onofre nuke plant was shut down in mid 2012 ostensibly due to mechanical defects in its steam tubes.

All three cities filed complaints with the California Public Utilities Commission at the proposal because their constituents believed that cheap, green power was going to eliminate conventional, polluting power plants near their communities. The reality is that gas powered plants are still needed nearby to back up intermittent green power and to provide voltage (similar to water pressure) to push electrons through the electricity grid.

All the replacement gas powered plants would be peaker plants that would have to charge 124% higher electricity prices for having to idle until they were needed by backup green power plants. Peak hour electricity prices for Jan. 3 added about 5 cents per kilowatt hour to the off peak price of 4.2 cent per kilowatt hour.

The three cities along California’s San Diego coastline no longer want clean, totally cheap and reliable electric power from the San Onofre Nuclear Power Plant. These cities favor replacing San Onofre’s nuclear power with clean, but pricey and sporadic, green power for 8 hours per day that has to be backed up by cheap gas-powered plants that have to sell power at 121% higher prices when the sun goes down.

(See more at: http://calwatchdog.com/2014/01/10/three-cities-oppose-gas-fired-power-plants-to-replace-san-onofre-electricity/)

Scientist Says No Reason to Shut Down San Onofre Nuke Plant

“[A]ll we had to do was decrease one reactor’s output by 20 percent to solve the problem, which would have dropped total output of SONGS (San Onofre Nuclear Generating Station) by only 8 percent.” – James Conca, nuclear power expert

Scientist James Conca said Southern California electric ratepayers should not have to pick up the $830 million net cost of permanently closing the San Onofre nuclear power plant because it is still operable without any safety issues.

Conca is a Cal-Tech trained geochemist and nuclear waste expert. He says the reason San Onofre was shut down was that 100 of the 10,000 steam tubes in the plant were vibrating enough to make contact resulting in one tube failing. To this writer’s knowledge no one has ever addressed whether the reason the tubes might have vibrated excessively might have been that the power plant was being used as a peaker plant to ramp up to back up green power. Was it a design flaw or operation of the plant beyond its design parameters?

But Conca said there is a simple alternative to shutting the plant down: “[A]ll we had to do was decrease one reactor’s output by 20 percent to solve the problem, which would have dropped total output of SONGS (San Onofre Nuclear Generating Station) by only 8 percent.”

The 18 million tons of extra carbon dioxide emitted from gas-powered plants providing replacement power for the loss of San Onofre mainly comes from out-of-state providers, so there is no substantial increase in local air pollution. But 1,500 local jobs and $50 million spent in the local economy from San Onofre have been lost. And ratepayers now have to pick up an $830 million plant decommissioning cost that could have been paid down by letting the plant continue to run until the end of its useful life. At least that way ratepayers would have gotten cheap, clean energy in return for their investment.

Conca blames an “anti-science culture” and political activism for not considering the re-start of the San Onofre Power Plant:

But such a simple and obvious solution as running at the correct output was not acceptable. In fact, nuclear scientists and engineers were shouted down so fast and so loud by politicos, you’d have thought it was the Salem Witch Trials of 1692. … It’s shameful that reasonable scientific and engineering fixes are no longer desired for addressing scientific problems. … It’s as though once the U.S. became the undisputed leader of the world, we suddenly had the luxury of being stupid. But it’s dangerous to assume we are immune to the long-term effects of dismissing the scientific and technological foundations that got us here in favor of fairy tales and ideologies.

(See more at: http://calwatchdog.com/2014/01/03/scientist-says-no-reason-to-shut-down-san-onofre-nuke-plant/)

California Drought Means Less Hydropower and Higher Electricity Prices

“The potential loss of 3,190 megawatts of hydropower due to the California drought exceeds the 2,200 megawatts of power lost from the shut down of the San Onofre Nuclear Generating Station.” – author

The Fitch bond ratings agency has warned that California’s protracted drought could put financial pressure on public-power entities in their ability to service their bond debts. (The public-power agencies, such as the Los Angeles Department of Water and Power, are run by governments. They are separate from the private power companies: Southern California Edison, San Diego Gas & Electric and Pacific Gas & Electric.)

The eight public-power agencies rated by Fitch in California obtain from 10 percent to 32 percent of their power from hydroelectric sources. What is a concern to bond rating agencies is if these power entities have to shift to more expensive gas-fired power, or even worse, to very expensive renewable power, which means wind, solar and geothermal. Much of new power would likely have to come from out-of-state providers. California already depends on imports for 25 percent of its electric supply.

To comply with state Senate Bill SB X1-2 of 2011, by state Sen. Joe Simitian, D-Palo Alto, the California Energy Commission studied whether importing cheap hydropower from British Columbia would meet California’s stringent renewable power criteria. The CEC concluded it would be very difficult to consider British Columbia hydropower as renewable power for California. This means that California could not replace its lost hydropower due to the drought with cheap hydropower from British Columbia, because that hydropower is somehow considered dirtier than California hydropower.

(See more at: http://calwatchdog.com/2014/01/23/drought-could-cascade-through-state-infrastructure/)


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