Every week it seems like California’s utilities announce a new clean power contract — solar PV, solar thermal, geothermal, wind power, even space solar. But according to a report from researchers at Black & Veatch, California utilities won’t be able to meet the state renewable portfolio standard, or RPS, which demands that 20 percent of their electricity comes from clean power by 2010 — at least in terms of actual electrons delivered.
Over the past several years the state utilities, like PG&E, Southern California Edison and San Diego Gas & Electric have been rushing to sign up various contracts with clean power providers in an attempt to reach the 2010 target. But as Mark Griffith managing director at Black & Veatch put it in an interview with me, the contracts might be in place but the projects won’t be online in time. “Utilities are making the effort,” explained Griffith, but projects can take a long time to build, particularly getting the transmission lines built.
While it’s already 2010, even by the end of the year utilities won’t have enough clean power projects built and delivering power to meet the state requirements. Many in the utility and power industries have predicted that this would happen over the past few years, which is why California utilities have tried to overshoot the percentage total for their contracts (i.e., not contracting 20 percent of clean power but 30 percent.) “Just because you have a contract doesn’t mean that project will work out,” said Griffith. (See PG&E’s former contract with a geothermal provider that went cold).
California utilities have also been asking the state’s Public Utilities Commission for years to allow them to buy renewable energy credits without having to purchase the actual energy generated from renewable sources in order to meet California’s RPS.
Missing the 2010 RPS deadline will increase pressure on utilities for the next deadline: California says that utilities need to provide 33 percent clean power by 2020. Black & Veatch says that the California utilities will also miss that later target if only in-state clean power is counted (meaning utilities can’t ship in clean power from out of state, like a Nevada solar farm, to meet the RPS.)
The in-state/outta state issue is an important component for California regulators to deal with in the next couple of years. California Governor Arnold Schwarzenegger recently killed proposals that would have put limits on how much how much of the 2020 RPS utilities could meet with power generated out of state. Proponents of keeping clean power in the state are arguing that the restriction would boost more green jobs in the state.
Wherever California utilities end up getting their clean power, clearly utilities have been struggling. It’s a new energy world and it’s in a state of flux. A note from Griffith was the most telling: “The energy industry’s New Normal faces a series of fundamental risks.”