Pacific Gas and Electric, the state’s largest utility, has reached agreement with suppliers of solar technology to build more plants like this. The utility says it will have 14 percent of its energy delivered from renewable sources by the end of this year.
Solar, wind, biomass, geothermal keep rates down
SACRAMENTO, CA – A generation ago, this capital city’s economic future was heavily influenced by the costs and risks associated with a single source of electric power – an expensive and balky nuclear power plant called Rancho Seco owned by the Sacramento Municipal Utility District.
In 1988, though, voters here directed SMUD, as it’s popularly known, to shut the plant down and pursue more affordable alternatives. Two decades later the utility generates 40 percent of its electricity from wind, geothermal, water, biomass, and other renewable sources of energy.
The consequences for the utility, its customers, and its namesake city have been profound. SMUD provides its 600,000 ratepayers with some of the lowest priced electricity in the West. Electricity prices are a competitive advantage in the Sacramento region, which has been one of the state’s strong job generators. California’s capital city has earned national distinction for being among the cleanest, greenest, and most energy efficient in America.
This year, for the first time in more than three decades, clean energy has risen to a top priority in the United States. The energy crisis, the economic crisis, and the climate crisis have been tied by both presidential campaigns to how America produces and uses energy. The central questions raised by the public, business executives, and elected leaders are what are the costs and consequences of making the transition from fossil fuels to clean renewable energy? And how long will it take the benefits of clean energy to be felt?
California as Clean Energy Model
The lessons from California are that making the switch from fossil fuel to renewable energy takes time, but also produces real gains for the economy, jobs, and the environment, say business and utility executives. The California record on renewable energy also suggests that a strong government role in mandating, overseeing, and collaborating with businesses to install the new sources of energy is essential.
Here in Sacramento, and in other California cities, utility executives and city leaders said they anticipated the consequences of failing to react to long-term trends in energy costs, environmental conditions, population growth, and job forecasts. Instead of digging in and defending existing technology and ways of doing business – as many states in the Midwest and South are doing — they reached agreement on collaborating with each other, and the state of California to pursue a economic path powered by clean energy.
SMUD’s Approach
Some of SMUD’s steps were designed to provide more energy. SMUD, for instance, provided hundreds of its customers with rooftop photovoltaic equipment to generate electricity and sell some of it back to the utility. It is planning to expand what is already one of the state’s largest windfarms. It is working with local dairies to generate electricity from farm wastes.
Other steps saved energy. This spring SMUD reached agreement with Woodside Homes, a prominent home builder, to construct 1,487 solar-powered, ultra energy efficient houses. SMUD subsidizes the cost of the solar and efficiency equipment, which save home owners as much as 60 percent on utilities, and also generates energy for SMUD. It is the tenth agreement the utility has signed with builders of what SMUD calls “energy-smart” homes.
Meanwhile Sacramento, the center of a metro region of nearly 2 million people, built and expanded its 37.4-mile light rail system that carries 50,000 passengers a day between downtown and the suburbs. The city modernized its zoning to encourage construction of energy-efficient neighborhoods within city limits. It has experienced steady job, income, and population growth, and has the second highest number of LEED certified, energy-efficient office buildings in the country, exceeded only by Chicago, according to the US Green Building Council.
Underlying all of this is clean, reasonably-priced power. Not one kilowatt that SMUD produces is generated from coal, an energy source with no future in California, which has steadily enacted the most aggressive renewable energy, energy efficiency, and climate change laws in the nation. “We feel renewable energy is a golden opportunity for us, this city, and the state,” said Jon Bertolino, SMUD’s superintendent of renewable generation. “It could be the next computer industry. We’re jumping into it, and the more we do the better off we’ll be in the long run.”
Not Perfect
Neither Sacramento, SMUD, nor California, of course, are trouble free. Joblessness has ticked up in recent months to 7.3 percent, and the state faces a $17 billion budget deficit that Republican Governor Arnold Schwarzenegger wants to close with a 1 cent rise in the state sales tax. Global climate change, say scientists, has changed precipitation patterns, reducing snowfall in the Sierras and precipitation in other areas. California is experiencing the most devastating fire season in its history, one of its worst droughts, and reservoirs are much lower than normal.
But other measures of well-being – income and job growth, quality of life in the state’s cities, technology development – are being helped by the state and its electric utilities. The states big utilities, like Pacific Gas and Electric, and smaller ones like SMUD, are blazing new paths in environmental conservation, energy security, and economic well being that most states and the nation would do well to study and seek to duplicate.
Midwest Lags
Michigan is a good case study, for example, of a state in dire need of an energy upgrade. It is just one of two states losing population, according to the US Census Bureau. It has the highest unemployment rate, 8.5 percent, in the nation. It is among the national leaders in the number of educated young adults that are leaving the state to seek work elsewhere. And it produces 61 percent of its energy from coal, 25 percent from nuclear plants, 10 percent from natural gas, and well under 1 percent from renewable energy. Michigan also is engaged in a fractious dispute over a renewable energy standard, unable to reach agreement on a state law that would require utilities to generate a portion of their power from clean energy sources. Twenty-six states have already done so.
Two years ago, the Michigan Energy Office issued this assessment of the state’s effort to recruit renewable energy: “The overall story of renewables in Michigan is one of lost opportunities.”
California Clean Energy Program
California is a different story. The state has long committed itself to changing how it produces and uses energy. Since the 1970s, California has championed energy efficiency and conservation. The per capita consumption of energy in California, about 7,100 kilowatt/hours per year, is the same today as it was in 1977, according to the California Energy Commission. During that same time, per capita consumption nationally grew to 12,000-kilowatt hours per year.
In the first decade of the 21st century, the state has amplified and accelerated the push to develop clean energy sources. In 2005, by executive order, California called on local governments to lower their carbon emissions 80 percent below 1990 levels by 2050. Another statute requires California utilities to generate 20 percent of their energy from renewable sources by 2010. The state is now considering legislation to generate 33 percent of its electricity from renewable energy by 2020.
In 2006, the Legislature enacted a first of its kind statute in the United States, the Global Warming Solutions Act of 2006, which sets a cap on California greenhouse gas emissions at 1990 levels by no later than 2020. In order to meet the law’s requirements, California needs to reduce its emissions by 11 percent from current levels within 12 years, says the state Energy Commission.
More recently, California directed 1 million photovoltaic systems to be installed on rooftops by 2018, enough to generate 3,000 megawatts, the equivalent of three big coal-fired power plants.
The momentum for developing cleaner fuel sources and reducing greenhouse gases has permeated every sector of the economy and culture. The most popular vehicle in the state is the high mileage Toyota Prius hybrid. A ballot measure in November asks voters to approve a $10 billion investment to begin building a 700-mile regional high-speed rail system. Among the Environmental Protection Agency’s list of top industrial buyers of clean energy are several California-based companies including the Intel Corporation, which purchases 1.3 billion kilowatt hours per year, more than any company in the country. Others include Wells Fargo & Company and Cisco Systems.
Utilities Implement
But the most important targets of California’s clean air, climate change, and clean energy statutes are the state’s utilities, which are changing how they generate energy. The state generates 12 percent of its electricity from renewable sources.
Since 2002, Pacific Gas and Electric, the state’s largest utility, has reached agreement with suppliers of solar technology, biofuel technology, and wind to generate 2,500 MW of renewable power. PG&E says it will have 14 percent of its energy delivered from renewable sources by the end of this year.
Among the projects PG&E is pursuing are:
- A 5-megawatt photovoltaic plant in Mendota, designed and built by Cleantech America. The plant, considered one of the most advanced photovoltaic facilities in the world, will begin operating next spring. “Utility-scale PV solar in California has just transitioned from hopeful concept to reality,” said Bill Barnes, the CEO of Cleantech America.
- Contracting Oakland-based BrightSource energy to build a 900-megawatt solar thermal electrical generating station in the Mojave desert northeast of Los Angeles, at a cost of $2 billion to $3 billion. The new plant, which uses mirrors to focus sunlight and heat on boilers, should be operational within four years, and employ 950 construction workers and 90 full-time workers once the plant is operational. It is the first new solar thermal generating station in California in 20 years.
- Reaching agreement with Ausra, a new solar thermal startup, to build a 177-megawatt solar thermal plant, with Optisolar for a 553-megawatt plant, and with SunPower for a 250-megawatt solar photovoltaic plant spread across 3.5 square miles of San Luis Obispo Island.
- Building a combined solar and biofuel plant that produces 107 megawatts of electricity near Coalinga, CA, The solar thermal portion of the plant uses mirrors to concentrate sunlight during the day, plus it has a boiler system that burns gases produced from 250,000 tons of agricultural wastes – manures, green wastes, agricultural byproducts.
“This hybrid technology combines two renewable resources abundant in California – solar energy and biofuel from the Central Valley,” said Fong Wan, vice president of energy procurement at PG&E. “We will continue to add these types of innovative renewable energy sources to meet our state’s climate change goals.”
Not to be outdone, Southern California Edison, which serves the Los Angeles region, is deploying the nation’s largest solar photovoltaic module system — a project that would place 250 megawatts of advanced photovoltaic generating technology on 65 million square feet of roofs of commercial buildings in an around Los Angeles. The first solar arrays in the $875 million project are being installed this month.
Even the Ironwood State Prison has teamed up with SunEdison to install a 1.18 megawatt photovoltaic solar power system. The project also meets the requirements of an executive order signed four years ago that requires state agencies to take measures to reduce conventional energy purchases for state-owned buildings by 20 percent by 2015. The Ironwood prison system is capable of providing enough electricity for 4,300 homes. Two years ago SunEdison installed a similar 1.16 megawatt solar power system at Chuckawalla Valley State Prison.
“We are strongly committed to being a good neighbor and in doing what’s right for our community,” said Ironwood Warden Debra Dexter.
For its part, the Sacramento Municipal Utility District committed several years ago to produce 23 percent of its energy from renewable resources by 2011, the most far-reaching target of any of the state’s utilities. It’s studying solar projects, planning wind farm expansions, and looking at biomass projects. Jon Bertolino, the superintendent of renewable generation, said the company will meet its goal. “We’ve got a couple of hurdles, like everybody else, But we’ll get there,” he said.
Keith Schneider, a journalist and editor, is the communications director for the Apollo Alliance, a national nonprofit coalition focused on developing clean energy and good jobs. A version of this article also was published on the Web site of the Michigan Land Use Institute, www.mlui.org, which he founded in 1995. Reach him at keith@apolloalliance.org
For More Information
American Wind Energy Association
2008 Wind Ranking Report
World Watch Institute
Green-Collar Jobs Report
Clean Edge Financial Investment in Clean Energy Sector
California Public Utilities Commission
Renewable Portfolio Standard Quarterly Report
California Public Utilities Commission
California Climate Change Portal
Department of Energy Map of RPS Standards by State
Database of State Incentives for Renewable Energy and Energy Efficiency
