If California Governor Arnold Schwarzenegger has his way, utilities in the state will get at least a third of their energy from renewable sources by 2020 — and they’ll have free reign to import it from out of the state. The move, which has been under discussion for more than a year, would create the largest renewable portfolio standard in the country — with some caveats — and could be a major boon for big solar farms in the Arizona and Nevada deserts.
That provision for imports is part of what sets the executive order, which Schwarzenegger is expected to sign this week, apart from a bill approved this weekend in the California legislature. The Governor plans to veto that bill largely because of limits on how much energy can come from out of state to meet the renewable requirement.
According to the Los Angeles Times, Schwarzenegger is also considering directing state regulators to redefine “renewable” to include energy from hydroelectric dams and nuclear power plants — a move that would take some of the bite out of the order as a way to boost solar, wind, geothermal and other green energy projects and newer technologies.
Schwarzenegger, along with some business and trade groups, have opposed the idea of limiting how much energy utilities can import in order to meet a renewables requirement, arguing that it would drive up energy prices, make an already-ambitious portfolio target even harder to reach, and “kill the solar industry in California.”
Some unions and consumer groups, on the other hand, want the energy produced in-state in order to help create green jobs in California. Generating clean energy via local, distributed installations has its benefits (projects get up and running quickly and don’t require a big transmission buildout), but they tend to be expensive and don’t scale up as fast as say, a utility-scale solar thermal plant in the desert (we’ve weighed the pros and cons here).
So what do utilities, many of which are struggling to meet current renewable targets, think of all this? At least a few of the ones taking the lead in cleaning up their portfolios, including PG&E (s PCG) and Sempra Energy, came out in support of the legislature’s version of the standard, including the limits on renewable energy imports that Schwarzenegger opposes. As the Sacramento Bee reports, however, smaller energy producers and municipal utility districts, have been urging for the veto in part because of the in-state issue, but also because the legislation would give state regulators more control over public utilities (investor-owned utilities like PG&E are already subject to regulation by the state utility commission, while public utilities have their own elected boards).
If California gets this one right, some in the industry think it could help spur a sort of policy-led Moore’s Law (which dictates that the number of transistors on a chip doubles every 24 months) for clean energy. According to the CEO of chip and solar equipment maker Applied Material, Mike Splinter, requiring improvements via regular policy steps (he advocated for raising the bar every two years in a national renewable portfolio standard at a recent conference) could drive innovation, adoption and cost reductions.
We’ll see this week, when Schwarzenegger makes his decision, and in coming months as it goes into effect, if the state can step it up.
Image credit 3TIER