The collapse this autumn of a major effort in California to strengthen the state's renewable energy mandate highlights a pressing problem not likely to slip away easily. A majority of the public, law makers and special interest groups supports renewable energy. But there are deep divisions over how much green power should be imported from outside the state and over how much renewable energy credits, rather than actual green power itself, should be allowed to contribute to the mandate.
A new measure in the autumn legislative session would have set a renewables portfolio standard (RPS) requiring utilities to procure 33% of their power from clean energy sources by 2020, compared to the current target of 20% by 2010. It would also have included several extra rules and regulations that would have resulted in more green energy generation within the state's borders. It passed narrowly in the state legislature, but was vetoed by Governor Arnold Schwarzenegger, a moderate from the centre-right Republican Party, who said it contained too many restrictions on delivery of green power from out of state and could result in unnecessarily high costs for California businesses and consumers. Schwarzenegger issued an executive order establishing a similar RPS of 33% by 2020, but with more relaxed limits on out-of-state generation. That effort, however, could get bogged down in the courts (Windpower Monthly, November 2009).
The debate centres on the complex relationship between green energy credits that would be counted towards the mandate and the actual clean power itself, which in some cases would not actually flow to California. The vetoed law would have required that at least 75% of the green power contributing to California's mandate come from renewable generation either inside the state or from green energy stations physically connected to California at the time their output is produced. The credits counting towards the RPS mandate under this component would need to be delivered simultaneously with the power.
The remaining 25% of renewables power counting towards the mandate could be both generated and consumed outside the state. In an arrangement known as firming and shaping, a wind farm in Washington state could sell its clean power to local consumers rather than transmitting it to California; under a bilateral trading agreement, California would procure an equal amount of electricity from power stations mostly using fossil fuels but count renewable energy credits from the out-of-state wind farm towards its green energy mandate.
Debate over firming and shaping contracts has caused a deep split within the wind industry. The California Wind Energy Association (Calwea), for its part, supported the 75% in-state stipulation to the very end. Executive director Nancy Rader says Californians have a strong desire for actual renewable energy to be delivered to the state. "The consumer, labour and environmental groups want to see some benefits besides carbon (credits) out of this thing," she says. "We cannot maintain political support for the RPS with just renewable energy credits flying in from out of state."
Seth Hilton, an attorney specialising in renewables with law firm Stoel Rives, agrees that there is a political challenge to relying heavily on clean energy generated out of state. "The argument is, you're just matching renewable energy credits with potential coal-fired generation and importing it into the state, and that's not what the California RPS is all about," he says. He adds that under the vetoed bill, the restriction on out-of-state power would have been even tighter than the nameplate allowance of 25% suggested. "A bit of a problem with that is that there are already a number of out-of-state projects being used to meet the RPS," he says. "Those would be counted against this 25% limit, so you're not starting at zero."
Some of the opposition to the bill came from major wind power companies that have established substantial businesses delivering renewable energy credits to California from clean-generation plants outside the state, without necessarily delivering physical power at the time it is produced. Spanish wind developer Iberdrola was one of the powerful opponents of the RPS proposal because of its limits on out-of-state agreements.
While much of Iberdrola's California sales are for wind power sent directly over the transmission system, it also arranges many firming and shaping deals.
"The electrons don't care where they're going or coming to," says Anita Marks, a spokeswoman for Iberdrola. "We sometimes run into situations in the Northwest where people will get pretty worked up with our projects in the Columbia River Gorge between Washington and Oregon - that we're selling that power to California. And my response to that is that if you raise wheat on that property, do you sell it in Oregon? Almost none of the wheat is sold in the United States."
Loyd Drain, a transmission consultant with Houston-based engineering services firm Taylor & Hill, doubts California can generate much more clean energy within its borders, however much renewables proponents wish it could. "What else are you going to do? There's not that much wind in California. There's still some undeveloped wind, but try to build a wind farm with environmentalists fighting you all the way," he says. "Certainly you could do solar, but the footprint of a big solar project has a lot of environmental considerations."
Drain says ambivalence towards out-of-state renewables generation will continue to plague California and other states, particularly if any form of national renewable energy mandate is approved. He says: "In order to meet even the current RPS standards, and for sure a national standard, it's going to take more (renewable energy supply) than what's in these big-load states like California, Nevada and Arizona. Their wind potential is not that great; it's a drop in the bucket. So you're going to have to start going to places like Montana or Wyoming and start connecting the wind that is there."
If actual power - and not credits alone - could be delivered to California from distant states, most stakeholders would be satisfied. But that requires new and costly transmission lines that do not exist yet. Drain says although utilities profess to be supporters of renewable energy, in practice they do not support the kind of transmission projects that would connect actual green electrons from distant regions: "You have seven major transmission projects being developed here in the West and none of the utilities are falling all over themselves to say: 'Hey, we want 30% of that system so we can connect to that renewable energy.'"