This week, the U.S. Supreme Court made the unfortunate decision to temporarily block President Barack Obama’s clean-energy plan. Many of the arguments made against it have also been made against California’s clean-energy policies.
The state’s new landmark clean-energy law took effect this month, ensuring that at least 50 percent of the electricity powering our state comes from renewable sources such as solar, wind and geothermal by 2030. This policy strengthens California’s position as a global leader on clean energy and flips the script to make renewable energy “mainstream” and fossil fuels the “alternative.”
Since California first established clean-energy requirements 15 years ago, critics have argued that, in addition to being unachievable, aggressive renewable energy goals would destabilize the power grid, eliminate jobs and hurt ratepayers.
Today, California produces more renewable energy than any other state in the nation and the major utilities are on track to meet and exceed their targets in the coming years. We are now in a good position to evaluate these claims.
The verdict on grid stability and jobs is clear. California has not had rolling blackouts caused by renewable energy and maintains a healthy surplus of reserves to meet peak electricity demand. As for the economy, since 2010, California’s unemployment rate has been cut in half while the amount of renewable energy produced has nearly doubled. More Californians now work in the renewable energy industry than at all 46 of the state’s public and private electric utilities combined.
The notion that renewable energy would drive up electricity costs for ratepayers has been treated as conventional wisdom by opponents. Since adoption of the first renewable portfolio standard in 2002, increases to average retail rates charged by utilities such as Pacific Gas and Electric Co., have been lower than the rate of inflation. During this same period, with innovation from Silicon Valley and elsewhere, solar power costs have declined to one-tenth of what they were. Today, utility-scale solar and wind have reached cost parity with fossil fuels.
The lower cost of renewable energy has helped California wean itself from coal, the dirtiest of all fossil fuels. In-state coal-fired generation has almost disappeared and direct imports from coal facilities outside California are slated to end within a decade.
Natural gas, on the other hand, still accounts for 61 percent of electricity generation in California. Although natural gas prices are low today, the long-term cost of power from these plants could rise due to market fluctuations, constraints on gas supplies, stricter carbon regulations and the cost of water used to cool these plants.
By contrast, renewable resources such as wind and solar, which have no fuel cost, provide power under long-term contracts at fixed prices that do not vary when wholesale markets go awry, new carbon regulations are enforced or water shortages occur. California ratepayers have an insurance policy against unforeseen changes.
California has a proven formula. Stable, long-term policies steadily ratchet up renewable energy procurement by utilities and provide the certainty that the private sector needs for investment, innovation and cost reduction.
Thanks to the steady hand at the wheel provided by the governor and legislative leaders, California is leading the race to a clean-energy future. Far from being an expensive option for ratepayers, renewable energy is proving to be one of California’s smartest investments.