The headline in the Washington Free Beacon was a no brainer, but reminds us that ignoring the downsides to well-intentioned policies can be costly.
Two recent reports by nonpartisan groups have raised major concerns regarding the negative effects of California’s push for increased reliance on renewable energies. One report by the Little Hoover Commission projects that California’s legal requirement that the state derive a third of its power from renewable sources by 2020 would lead to soaring costs and significant damage to the environment…
The massive amount of money coming in from the federal government in support of these projects is perhaps acting as an enabler to California’s rush into renewable energy. California companies received over $4 billion in Department of Energy loans as part of the American Recovery and Reinvestment Act, including giant loans of $1,124,110,000 to Mojave Solar, $646,000,000 to First Solar Electric, and $273,368,534 to (now-failed) Solyndra. The amount of federal money coming into California could be damaging to the state’s electricity system. A report by Stanford’s Hoover Institution finds that California’s massive dive into renewable energy is complicating California’s energy grid in ways that are sure to increase costs.
“California has the most ambitious—and complicated—renewable program in the United States. … No single law, regulatory decision, or document describes all policies and programs seeking to develop renewable power in the state, much less the many linkages (or lack thereof) among them,” the report states.
That lengthy Hoover Institution report, Renewable And Distributed Power In California, describes this regulatory maze, cautioning:
California and many other U.S. states will see more changes in their electricity systems over the next 15 years than they have in the past half-century. California has embarked upon an unprecedented effort to change, rapidly and fundamentally, the state’s electricity supply and delivery system. Utility-scale, fossil-fired power plants are being phased down. A new system driven by renewable and distributed power of all sizes and technologies, owned by customers, utilities, and third parties alike is being put in place. An overlay of demand-side resources and new information technology is likewise expanding. These ambitions have been crystallized through the state’s climate change law and net zero energy goals, the law mandating the use of renewable power for 33% of California’s electricity supply by 2020, and by Governor Brown’s goals to develop 12,000 MW of distributed generation by 2020 and 6,500 MW of combined heat and power (CHP) by 2030.
While much commentary has focused on the technological aspects of renewable and distributed power development, little attention has been paid to a fundamental question – are the traditional electric system regulator and utility institutional structures sufficient to support this massive transformation….
Stress in the institutional structure of California’s electricity system can already be observed. California has 11 programs for renewable power development, with differing goals, timelines, and criteria. Electric utilities are forecasting increased costs and rates after decades of relative stability. Equitable allocation of these costs across consumers with different and novel electricity service needs will likely require major changes in past practices….