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United States

California ready to bounce back -- Three year slump

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Connecting new wind projects and other renewables in California has not just been slow, growth in green power supply has been outstripped by growth in demand in each of the past three years. Regulators now admit with certainty that California utilities will collectively fail to meet the 20% renewable energy by 2010 that state law requires. They are currently at 12.7%.

Not that the utilities have been idle. In efforts to comply with California's "renewables portfolio standard" (RPS) law from 2002, they have won approval from the state Public Utilities Commission (PUC) for no less than 95 contracts for the purchase of renewables power from 5900 MW of new and existing capacity. But delivery of new generating capacity has been meagre.

Much of it still only exists on paper. Just 14 projects, representing about 400 MW, have come online since 2002, with utility renewables' generation rising by only about 400 GWh between 2003 and 2007. Most of this was provided by new wind and geothermal plant. "Because this overall increase was very small, however, it was outstripped by load growth over the same time period," says the PUC. Renewables fell from 14% of total electricity sales to 12.7% from 2004 to 2007. According to the PUC, California's utilities need about another 3000 MW of renewables capacity to meet the 20% by 2010 target.

Avoiding penalties

Utilities failing to meet the RPS law face penalties, but do not have to actually deliver power to avoid a fine. "The way that the law is written, there's some flexible compliance measures," says Jennifer Zerwer of California utility Pacific Gas & Electric. "As long as you have at least 20% or more under contract and have demonstrated a good effort...if you have a sufficient amount online within a three year window, that makes up for any amount that you were lacking in 2010. Then you're in compliance."

Nancy Rader of the California Wind Energy Association, who was heavily involved in forging the RPS law, acknowledges the state's slow progress, but says it is not the fault of the law. We're in a lull waiting for transmission and it's not a surprise," says Rader. "Nobody should paint the RPS as a failure because of that. We've got to build the infrastructure, and that takes a long time."

The PUC agrees. "Barriers to project development must be addressed if we are to see a long term upward trend in RPS generation as a percent of bundled sales." More than 3000 MW of new wind could be built in the Tehachapi pass area if there was enough capacity on the transmission network to take the wind generated electricity.

Unseen progress

"In the past year, actually, a lot of progress has been made, it just doesn't show up," says Rader. She cites the new approach for building transmission lines in the state approved by federal regulators. It will soon result in new wires being fed into the windy Tehachapi Pass area. California's network operator is also freeing up the queue for transmission capacity. Meantime, market regulators are working with industry members to identify the best geographic zones in the state for renewables and then fast tracking construction of new wires to those locations.

"There is absolute growth in renewable energy. We're waiting for the transmission folks. As soon as Tehachapi comes online there is going to be a huge jump. And as soon as the next transmission line comes online there is going to be another huge jump. So it's going to be a lumpy process," says Rader.

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