In a recent blog, I said that when it comes to the future of renewable energy, “we find ourselves suffering not from a dearth in energy options, but from a lack of imagination.” And even as events in Japan continue to unfold (as of this morning, news reports indicate that Japanese officials have now raised the status of the nuclear disaster unfolding at the Fukushima Daiichi power plant to a “7” – the same number as Chernobyl), the conversation about energy reliability, security, and dependency continues to focus on our current situation without sufficient acknowledgement that we cannot really predict how future technological advances—particularly when it comes to clean energy—will impact our future energy needs. As I said in that blog, “We cannot continue to judge renewable energy based on its current incarnation, but instead, should be focusing on where we want renewable energy to be in the next five, 10, 20 years.”
This week, California Governor Jerry Brown will sign legislation touted as being, “the most aggressive alternative energy mandate in the US.” The hope is that the new standards set by the bill will boost California’s renewable energy industry at a time when worries about the recession and decreased federal funding have raised concerns about the future viability of clean energy alternatives as a supplemental energy source. At the heart of the bill is the requirement that 33% of the electricity generated by the state’s utilities come from renewable sources by Dec. 31, 2020. This ups the ante on the current state law that mandates a 20% allotment of renewable energy for investor-owned utilities (like Pacific Gas and Electric).
Proponents believe that the 33% requirement will spur growth in the renewable energy industry, and that increased demand in solar, wind, hydroelectric, and landfill gas technologies will indemnify the state from the vagaries of the nations shaky economic climate. In particular, supporters of the bill believe that a state mandate will create a more secure investment environment, thereby luring investors (and their pocketbooks) back to the golden state. The belief is that higher state standards will increase lender confidence, because it sets up a long-term demand for renewable energy. According to Dan Adler, president of the California Clean Energy Fund, the higher state standards give lenders confidence that there will be long-term demand for renewable energy and that their loans will be repaid. Additionally, because California utilities are already close to meeting current renewable power standards, Adler believes investors who have already provided the money for renewable energy investment may have decided to push the pause button on their investments—a possibility forestalled by the increase in renewable energy standards that forces even current compliers to continue to expand and improve upon their power sources.
Opponents paint a scarier picture—pointing to California’s already high electricity costs and predicting that the bill will only increase electricity rates. Many critics believe this increase will only hurt the state’s businesses. In a statement in response to the bills likely passage, California Manufacturers and Technology Association spokesman Gino DiCaro said, “Industry in California already pays electricity rates about 50% higher than the rest of the country. With 33%, those rates are going to go up even more.”
In response, Governor Brown assured business owners that he would keep a sharp eye on rising energy costs, while also restating the state’s need to embrace renewable energy.
“I know one thing,” said Brown in an interview with the Associated Press, “Being dependent on foreign fossil fuel is not good for our economy, it’s not good for our security, and it’s not good for our climate. We have to be bold.”
So what do you think? Is California’s 33% standard a recipe for disaster, or will the mandate trigger exactly the kind of investment windfall needed to push renewable energy another rung up the ladder away from also-ran alternative to prominent power player? Is it reasonable to expect other states, which may not be privy to the same natural resources or clean tech funding, to follow in California’s footsteps? And with its specific focus on electric utilities, did California miss an opportunity to encourage renewable, distributed generation to the mix?