Remember when California was just playing TV Energy Use Cop?
Well, OK, California was doing more than that, but the new things California is doing are so much better.
Last week, for example, Governor Jerry Brown signed into law a new standard for the percentage of renewable energy to be required in electric power production. By 2020, 33% of the electricity produced and sold in California is to come from renewable sources: wind, solar, biomass.
Everyone is stating right up front that this will make electricity cost more. A price increase of up to 19% is projected by 2020. This will have an impact on business costs, of course, and will factor into rising prices for everything. It will also cause household electricity bills to rise.
Residential electricity use by Californians is already some of the lowest in the nation, largely a function of the temperate weather. But low electricity use is also a function of relatively high existing rates. The margin many households have for using less electricity is thin. So as bills go up further, Californians will simply have to spend more on electric power and less on other things.
They will at least have more solar and wind farms to look at. It takes 12.5 square miles of solar panels to generate the same max power output as a large coal-burning or small nuclear plant – and of course, the average output of the solar photovoltaic arrays is 30% or less of the maximum potential, since the weather doesn’t always cooperate and there’s less sun per day at certain times of year.
Wind is considerably less efficient per acre than solar, so if wind is to feature prominently in the move to renewables in California, there will have to be a lot more wind turbines than the 13-mile stretch of them along I-10 in San Gorgonio Pass (video), or the gaggle on Highway 58 in the Tehachapi Pass. But it may not be only Californians who get to look at all the wind farms; San Diego Gas and Electric has already signed a deal with a wind farm provider in Montana. An interesting prospect for the other Western states.
California’s private power companies were supposed to get 20% of their output from renewables by 2010, but they didn’t manage to. So there’s no guarantee they can meet the 33% by 2020 requirement. What is guaranteed is that rates will go up for consumers.
Meanwhile, the state’s cap-and-trade scheme, scheduled to go into effect in January 2012, will have its own effect on utility bills, estimated to be between 5% and 12% for electricity and 12-25% for natural gas (between 2012 and 2020), depending on the optimism or pessimism of the assumptions figured into the estimate (see here, for example). Just to be clear, in the optimistic case, cap-and-trade causes electricity and gas prices to rise.
As noted before in this space, the cap-and-trade scheme is currently being stalled by a lawsuit from an environmental justice group, which is concerned – and justifiably so – that the scheme’s impact will fall disproportionately on lower-income Californians. Du-uh, as they say.
Over in the world of transportation, California has mandated that diesel emissions be reduced 85% by that halcyon year, 2020. This constitutes a multi-whammy for independent truckers, who will have to spend $8K to $20K per truck to retrofit them so that they can be operated through 2016, and will have to purchase new ones (at $80K to $250K a pop) by 2020 – although they won’t be able to get rid of their old ones for better than pennies on the dollar.
(Ed Morrissey wrote earlier this month about the highly questionable study – linking diesel emissions to premature deaths – which led to California’s adoption of the emission-lowering requirement.)
California isn’t worried about the impact of the diesel regulations on the trucking industry. But it is a big fan of high-speed rail (HSR), on which it’s moving full-speed ahead. Citizens are calling the first leg of the HSR project the “train to nowhere,” because it will link two moderate-size towns in the Central Valley, which have no commuter needs relevant to the HSR connection – and no cargo needs either, for that matter.
HSR advocates are pointing out that the train will bring jobs to the areas hit hardest by agriculture losses and farm failures, the result of 30 or more years of improvident federal and state water policies. Myself, I’d rather have the farms. So would the farmers.
And this is an excellent time to observe that nothing going on here is dictated by blind fate: politicians and regulators are making decisions – according to their opinions; i.e., on the same basis you and I do – about what they want to encourage and discourage. They are consciously disfavoring agriculture and favoring high-speed rail and environmental “restoration” projects. (Meaning, “make it like it was in 1960 again, with the salmon runs and the water in my favorite spot in the Delta”; but why not 1910, or 1840, or 1776?) Of course, HSR potentially poses threats to wildlife too, and some environmental groups are pointing that out.
But perhaps the most interesting thing about HSR is that it uses a lot of electricity. China feeds the HSR system with coal-generated power. Japan and France feed theirs with nuclear-generated power. California wants to have HSR but ensure that 33% of the state’s electricity comes from renewables. Since passive renewables are unreliable on a 24-hour average basis – winds die, clouds come – the rail system will presumably have to monopolize some of the more-reliable electricity being produced for California.
Down the road, there will be an impact, in various forms, from energy unreliability. My guess is that it will be a combination of even higher electricity prices – a premium (or, basically, extortion) for reliability – along with periodic compromises from regulators on how well the power companies are meeting their mandated renewables goal, and (the practical measure) a proliferation of generators operated by businesses and homeowners, who will want to keep the power saw, the refrigerator, or the a/c on when the grid is overloaded.
In other words, state policy will guarantee that what you spend on electricity goes up, period.