Even if California Gets Too Much Media Attention, Power Industry Developments There Are Worth Watching
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- Feb 20, 2020 5:13 pm GMT
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California has long been considered a trend setter in everything from politics to technology and for good reason. It’s the nation’s largest state by population and third largest by area and if it were a separate country it would have the world’s fifth-largest economy.
Still, the amount of coverage it, Washington, D.C., and New York receive often fuels charges that much of what is considered news is determined by coastal elites who live in or close to those places writing or talking about what they see around them while ignoring the rest of the country, which better represents America.
With that in mind, I decided to look at four areas in which California's electric power gets a lot of attention to see if they really merited it. By and large, I think they do. See what you think.
The area about which I was most skeptical was electric vehicles. California is definitely an outlier in EV sales, due in large part to its Zero Emission Vehicle regulation, which is meant to help it combat smog. According to auto research firm JATO, in 2018 California not only had more EV sales than any other state, it had more than any other country but the U.S. and China.
Meanwhile, a survey conducted last September by the Sierra Club found that 74 percent of all car dealerships nationwide weren’t selling EVs and 44 percent of the ones that were had no more than two EVs on their lot.
Despite that, analysts remain bullish that EVs will sweep the globe. For example, Bloomberg New Energy Finance predicted last fall that 57 percent of all new cars sold worldwide by 2040 will be electric and that the same percentage of light commercial vehicles sold in the United States, Europe and China will be electric by then, too.
Also, while consumer EV adoption may be slow to happen outside the Golden State, governments and corporations concerned with climate change are moving to electrify their fleets, so utilities in other states will have to start dealing with the electrification of the transportation sector.
In addition to being a leader in EV adoption, California is a leader in the adoption of solar power. As of the third quarter of last year, the state had 26,232.5 MW of solar generation capacity, the most in the country and more than four times the 5,662 MW in North Carolina, according to the Solar Energy Industries Association. California also got the highest percentage of its electricity from solar power (19.5 percent), followed by Nevada (13.28 percent), Massachusetts (12.59 percent) and Vermont and Hawaii (both 11.9 percent).
Additionally, California was the leader in residential solar installation with nearly 300 MW installed in the third quarter of last year and is likely to retain its leadership for two reasons. One is the increased interest in solar-plus-storage units among homeowners affected by the power shutoffs that California utilities implemented to keep their equipment from starting fires during high-fire-risk conditions. The other is a solar power mandate that went into effect this year that calls for new single-family homes or low-rise apartments to have solar panels or get power from an offsite community solar project.
The mandate might not result in the amount of residential solar construction envisioned, however. Sacramento's municipal utility is asking the California Energy Commission to let it build solar farms from which new homes and apartments can get power, so their developers don’t have to equip them with solar units.
Still, California is and likely will be for some time a good place to study for anyone that wants to figure out how best to integrate solar power into regional grids, local circuits and everything in between. And that’s likely to be an increasing swath of the country, as researcher Wood Mackenzie expects installed photovoltaic capacity to more than double in the U.S. over the next five years.
California also is getting a lot of publicity for its efforts to decarbonize buildings, which involves making them all electric. A study by Energy and Environmental Economics found that all-electric homes produce 30 to 60 percent less greenhouse gas emissions than homes that use natural gas as fuel. The study also found that the number will increase to 80 to 90 percent by 2050 as the state moves to zero-emissions power on its grid.
Those savings have municipalities across the country looking at banning or severely limiting natural gas hookups in new construction. Berkeley, Calif., started the trend last July, and 22 other California cities have followed its lead. The trend has spread outside California to Massachusetts, where Brookline, Mass., banned natural gas hookups in new constructions and complete renovations and its neighbors are considering similar moves, even though Brookline’s action has yet to be approved by the state’s attorney general. Big cities, such as Los Angeles, San Francisco and Seattle also are pondering legislation that promotes all-electric development.
Compared to residential solar units and EVs, all-electric homes are widely prevalent in the country. As of last May, one in four homes was all-electric, according to the Energy Information Administration, which put the percentages at 45 in the South, around 18 in the West, 15 percent in the Midwest and close to 8 in the Northeast.
Those percentages seem likely to grow as the drive to decarbonize intensifies, people move to the Sun Belt where homes need less heat, and the cost of electric heating equipment drops. But although California may have been ahead of the curve in banning natural gas from new construction, the South is the all-electric leader in the residential sector by such a high margin that it’s likely to retain that leadership for a while.
California is a leader in the drive to make power production emission free. A law enacted in 2018 requires 50 percent of the state’s power to come from renewable sources by 2025; 60 percent of it to come from renewable sources by 2030; and all its power to be carbon-free by 2045.
California was preceded in this regard by Hawaii, which in 2015 committed to getting all its electricity from renewable resources by 2045, but the Golden State’s commitment seems to have served as an inspiration. Since it took the plunge, six other states and Washington, D.C., have committed to 100 percent renewable power. The most ambitious is Rhode Island, which is shooting for it by 2030, followed by Washington, D.C. (2032), New York (2040), New Mexico (2045), and Maine, Nevada and Washington (all 2050).
Once you get past them, however, the landscape looks different. Twenty-two other states also have renewable portfolio standard regulations, but only one (Vermont) is at 75 percent, five are at or around 50 percent, and the remaining 16 are below that. Meanwhile, 21 other states have no RPS regulations.
Nonetheless, it’s not just California’s power providers that are planning for a green future. Xcel Energy, DTE Energy, Duke Energy and Dominion have pledged to be 100 percent carbon free by 2050 and Southern has made that its goal.
Such a move would be hard under any circumstances but if EVs and all-electric building take off, it would be especially challenging. If the U.S. were to decarbonize its economy by 2050, the Brattle Group estimates that generators would have to produce twice as much electricity as they do today to cover the additional power that would be consumed by an all-electric transportation sector and fully electrified buildings.
Doing that while shifting away from fossil fuels would be an immense task, which means companies that are attempting it should monitor each other’s efforts no matter where they’re located because they’ll need all the help they can get.