California’s aggressive climate policies are the leading issue that led to millions of customers experiencing rolling blackouts in mid-August. The state was unable to maintain sufficient reliable power due to an over-reliance on a renewable grid incapable of providing enough electricity for demand at peak hours after the sun went down. Clearly California, much like the rest of the United States, is not ready to maintain its current goal of 33% renewable electricity by the end of 2020, let alone a total shift to renewable energy sources in the near future.
Millions of Californians experienced rolling blackouts for the second time in less than a year as residents were denied electrical power during the recent heatwave that struck the state in mid-August. The blackouts come at an incredibly inopportune time when individuals are forced to remain indoors due to the coronavirus pandemic. Back in October, Pacific Gas and Electric (PG&E) cut off power to homes across California to avoid starting forest fires. Then on August 14th, California had to impose rolling blackouts because it failed to maintain sufficient reliable power from natural gas and nuclear plants and did not pay in advance for enough guaranteed electricity imports from other states . Ultimately, the issue leading to the recent rolling blackouts stems from the state’s climate policies. In the end, California is not currently able to support the 33% renewable energy supply to today’s utility grid set forth in Senate Bill 100, let alone the expected 60% by 2030 or 100% by 2045 .
The two blackouts in less than a year are strong evidence that the tens of billions of dollars California has spent on renewables comes with high human, economic, and environmental costs . There has been very little electricity generated from wind during the summer heatwave in California and the broader western U.S., further drying up much needed supply. In fact, the same weather pattern (a stable, high-pressure bubble that is causing the heatwaves) has brought very low wind for days on end along with the very high temperatures . What other sources of California endorsed electricity generation remain? Renewable power from the sun. The problem is, electricity from solar is used up at the very moment when demand for electricity rises.
California Energy Policies
California has always been an epicenter for change. Whether it is political, humanitarian, or idealistic, the region has always been the epitome of a progressive state. The same goes for their electricity and power generation mix. California is one of the states that utilizes Community Choice Aggregations (CCAs). CCAs are local government entities that procure electricity on behalf of electric retail customers within a given city, county, or group of jurisdictions . Additionally, each CCA may choose their own electricity portfolio, which may include renewable energy. In California, all active CCAs procure more renewable energy than required by state law . Back in 2002, California started their Renewables Portfolio Standard (RPS) Program to promote the use of renewable energy in the state. The program was established in 2002 by Senate Bill 1078 with the initial requirement that 20% of electricity retail sales must be served by renewable resources by 2017 . The program was further accelerated in 2015 with SB 350 mandating a 50% RPS by 2030, and in 2018 SB 100 was signed into law which increases the RPS to 60% by 2030 and requires the entire state’s electricity to come from carbon-free resources by 2045 . While the United States as a whole has been pushing for a clean energy future through renewables and carbon-free energy, California is at the forefront with these aggressive renewable energy policies.
So how have these zealous energy policies affected the price of electricity in the Golden State? Many people assume the more solar and wind energy that gets produced, the lower electricity prices will become. Unfortunately, that is not the case. In fact, California saw its electricity prices rise six times more than the rest of the United States from 2011 to 2019, due to its huge expansion of renewables . Even though the cost of solar panels declined dramatically in the same time period, their unreliable and weather-dependent nature imposed large, new costs for storage and transmission to keep electricity more reliable. The main reason behind the rising prices appears to have been predicted by a young German economist in 2013. In a paper for Energy Policy, Leon Hirth estimated that the economic value of wind and solar power would decline significantly as they become a larger part of electricity supply . This is due to their fundamentally unreliable nature. Both solar and wind produce too much energy when societies don’t need it and not enough when they do. In fact, this unreliability requires solar and wind dependent places like Germany, Denmark, and California to pay neighboring nations or states to take their renewable energy when an excess is produced and buy other sources when more is needed . Essentially, California is paying to have their surplus energy taken away and turning around to pay for imported energy when there is not enough. Such a paradox is unsustainable and is precisely the reason electricity prices have soared over the past decade.
California is the most populous state in the nation, has the largest economy, and is second only to Texas in total energy consumption . Additionally, California has the world’s fifth-largest economy and many energy-intensive industries, yet the state has one of the lowest per capita energy consumption levels in the United States . This is due to extensive efforts to increase energy efficiency by implementing alternative technologies that have slowed the growth in energy demand . Furthermore, California leads the nation in non-hydroelectric renewable electricity generation and is among the top producers of conventional hydroelectric power. That being said, in 2018 almost one-third of California’s electricity supply came from generating facilities outside the state, and from 2013 to 2017 California was the nation’s largest importer of electricity from other states . To understand how this is possible when the state has some of the lowest per capita energy consumption levels, a breakdown of the power generation mix is shown in Table 1.
Natural gas still produces the most electricity in the state of California but renewable sources are nipping at its heels. Although 32% in 2018 is still well shy of the 60% RPS required by 2030, it is still an impressive number. The problem with this number is the fact that 14% of all of California’s electricity and 43% of renewable electricity generation comes from solar sources. Even though many think of California as a state of sunshine, beaches, and oranges; many places, including Long Beach, have less than 160 sunny days per year ! The result is a spotty and unreliable source of electricity when individuals need electricity the most.
Causes of the August Rolling Blackouts
While the October blackouts were caused by wildfires, what caused the blackouts in 2020? Quite simply, more power was demanded than could be supplied. The California Independent System Operator (CAISO) which monitors the state’s electricity needs and power grid capabilities, issued a Stage 3 System Emergency on Friday August 14th due to an electricity reserve deficiency. At peak usage around 7 p.m., the data showed demand was at 46,777 megawatts, far higher than the system could supply at the time . When a Stage 3 energy emergency is declared, like on the 14th, utility companies are directed by CAISO to conduct rotating power outages in order to relieve strain on the electrical power grid. According to an official statement, “Pacific Gas and Electric Company (PG&E) was directed by the CAISO to turn off power to approximately 200,000 to 250,000 customers at a time in rotating power outages given the strain on the power grid during the statewide heatwave” . With two power plants offline, limited wind, and no additional power being supplied from solar sources, there was no way the grid could keep up with electricity demand after the sun went down.
Clearly, there is an over-reliance on a renewable grid incapable of providing enough electricity to meet demand in California. Renewable sources are able to keep up and oftentimes outpace demand when the sun is shining and wind is blowing, but when nature doesn’t cooperate, people begin to suffer. These rolling blackouts are utterly alarming when many people have been forced to stay inside due to the global pandemic and a blistering heat wave hitting the area. Since electricity is a service that customers pay for and the U.S. electrical infrastructure has developed beyond that of a second-world country, customers expect it to be available at any given point, regardless of outside forces.
In light of the recent blackouts, California Governor Gavin Newsom designated a top aide, cabinet secretary Ana Matosantos, as his new “energy czar”. In addition, he suggested the state take charge of Pacific Gas & Electric, the nation’s largest privately owned utility company with more than 5.5 million customers across California . Since PG&E is the primary utility for some of California’s most populous cities, including San Francisco, San Diego, and Sacramento, it might make sense for the state to monitor the recently bankrupt utility provider closely. PG&E emerged from Chapter 11 bankruptcy proceedings on July 1, 2020 after dealing with billions of dollars in claims for damages related to wildfires caused by its equipment in 2017 and 2018 .
With PG&E freshly emerged from bankruptcy proceedings and on track to meet the 2030 goal for renewable energy generation, a takeover could be plausible. Although Newsom raised the possibility of the state taking charge of the utility in 2019, he declined to give specific details about how that would look but wants his energy strike team to release a “broad strokes” outline for how utilities need to change to meet modern challenges in the coming weeks . In the meantime, Newsom waived the state’s emissions standards to allow businesses and utilities to run fossil-fuel generators that many procured for emergency power outages during wildfire seasons to sustain current electricity needs .
“These blackouts, which occurred without prior warning or enough time for preparation, are unacceptable and unbefitting of the nation’s largest and most innovative state,” Newsom declared on August 17th while ordering regulators to pull out all stops to keep power on. “This cannot stand” . The people of California and the Governor are caught in a bind. The state finds itself deciding what is more important: keeping the lights and air conditioning on or pushing towards a carbon-free future. Last December, a report released by PG&E concluded that the utility’s customers could see blackouts double over the next 15 years and quadruple over the next 30 if the state continues its aggressive push towards a carbon-free energy society . Clearly this is not a problem going away any time soon, and things certainly won’t get any better in the near term. They may actually get worse, especially in the winter when cloud cover is more common and solar electricity generation falls well behind what is experienced during summer months. Unfortunately, solar plus additional battery storage is an expensive attempt to fix problems that led to this blackout and cannot help through long winters of low output .
The California Government is forcing carbon-based forms of electricity generation out of their state long before the infrastructure is ready, and the people are suffering the consequences. As a result, California’s electricity prices will continue to rise if it continues to add more renewables to its grid while moving forward with plans to shut down its last nuclear plant, Diablo Canyon, in 2025 . To manage the increasingly unreliable grid, California will need to either keep the nuclear plant operating, build more natural gas plants, or pay an escalating price annually to reserve emergency electricity supplies from its neighbors. Ironically, if California spent an estimated $100 billion on nuclear instead of on wind and solar, it would have had enough energy to replace all fossil fuels in its in-state electricity mix, appeasing the carbon-free goals set for 2045 . Luckily Governor Newsom acknowledged gaps in reliability amid the state’s transition to renewables while affirming the state remains “committed to radically changing the way we produce and consume energy” .
California, like the rest of the United States, is not ready to maintain its current goal of 33% renewable electricity by the end of 2020, let alone a total shift to renewable energy sources in the near future. All the evidence needed lies in the recent rolling blackouts in the Sacramento region. If renewable electricity generation sources for the grid were reliable enough to sustain the energy necessary to power the entire state, a shutdown would never have occurred. Since renewable energy sources like solar and wind are at the mercy of nature, they cannot be ramped up at a moment’s notice when other power generators go down. Solar power generation also plunges in the evening when electricity usage can spike, as was the scenario recently when the state didn’t have enough backup power to compensate for high demand. With current technology for electricity generation, power shortages are inevitable if fossil fuels are eliminated as a source. The methods for storing renewable energy for the grid are not yet mature enough to sustain society solely on the energy nature provides. By California taking steps to force a mandate towards a clean energy future, progress is made at the expense of the public and the journey towards a renewable future may be more difficult than expected.
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