CA Energy Report: On Track, but Challenges Ahead

SACRAMENTO — Renewable energy in California will create thousands of jobs, build the businesses of the 21st century, increase energy independence and protect public health, according to a draft report released on Aug. 31 by the California Energy Commission (CEC).

The report outlines the state of renewable energy as well as issues that must be overcome if the Golden State is to achieve its goals.

California’s Renewable Portfolio Standard requires utilities to increase the amount of renewable generation sold to customers to an average of 20 percent by the end of 2013, 25 percent by the end of 2016, and 30 percent by the end of 2020. In addition, the goal of Gov. Jerry Brown’s Clean Energy Jobs Plan is to install 20,000 megawatts of renewable generating capacity by 2020, comprised of 12,000 megawatts of localized electricity generation and 8,000 megawatts of utility-scale generation.

The CEC’s report is the first step in the governor’s directive that it prepare a plan to expedite permitting of the highest-priority renewable generation and transmission projects.

"California appears to be on track to achieve the 20 percent by 2013 Renewable Portfolio Standard (RPS) target, with nearly 16 percent of statewide retail sales coming from renewable generation facilities in 2010," the report states. "The California Public Utilities Commission reports that more than 2,000 megawatts of new renewable capacity has begun commercial operation since the RPS was established in 2002."  

The report also states that publicly owned utilities added another 290 megawatts of renewable energy since the RPS program began.

As of 2010, California had more than 9,000 megawatts of renewable generating capacity, with nearly 6,000 megawatts from utility-scale renewables, 2,292 from wholesale-distributed generation facilities, and nearly 1,000 megawatts from customer-side-distributed generation systems, according to the report. Additionally, the state has progressed toward achieving the Governor’s 12,000-megawatt renewable distributed generation goal, with 3,278 megawatts of distributed generation capacity installed as of June 2011.

"If existing state programs to support distributed generation are fully successful, the state could add 5,400 megawatts of additional capacity in the next five to eight years, leaving a gap of approximately 3,500 megawatts that may require additional programs or incentives," according to the report. "However, given declining trends in solar photovoltaic costs, it may make sense to focus on developing the low-hanging fruit and reforming permitting and interconnection processes in the early years to take advantage of cost reductions and improved regulatory structures in later years."

The report also identified challenges in achieving future goals, including the planning, permitting and environmental issues that can delay or jeopardize project development and increase costs. Additionally, because many renewable resources are located in remote areas, the commission staff said the state must upgrade existing transmission infrastructure or develop new systems to bring electricity from the remote areas to the state’s load centers.

The process is made more complex by the current disconnect between generation and the transmission planning and permitting processes. Because transmission projects take a considerable amount of time, the development of the projects must begin before final generation locations are decided.

Integrating the large amounts of intermittent renewable electricity, like solar and wind, into the state’s electric grid also presents an issue because the amount of generation varies over time periods as short as seconds, according to the report.

"It can cause difficulties for grid operators who must maintain a constant balance between generation supply and real-time customer demand while also meeting established standards for controlling fluctuations in frequency and voltage," the report states. "Connecting distributed generation projects to the distribution system also involves challenges because of aging infrastructure that also was not designed to accommodate the two_way flows of electricity that can result from high levels of distributed generation on the system."

Financial challenges include gaps in the financing at certain stages of renewable development, and costs associated with environmental review and permitting, construction, and interconnection of renewable facilities.

"Significant investment is needed to bring down the costs of existing renewable technologies and develop the new technologies that will be crucial to integrating renewable technologies into the grid," the report states. "However, investment in energy-related research and development is currently about $1 billion less than a decade ago."  

The Integrated Energy Policy Report Committee is seeking stakeholder input on whether the issues identified in this draft report are accurately characterized and whether they are the highest priority issues that need to be addressed.

Input will be used to further refine the report to develop a more comprehensive strategic plan by mid-2012.

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