The nation’s most stringent renewable energy mandate for California utilities means major opportunity for renewable energy developers, but meeting the mandate will be harder this time around.
At press time Gov. Jerry Brown was poised to sign a law requiring utilities to get 33 percent of electricity sales from renewable energy by 2020. They were required to get 20 percent of sales by 2010, though none of California’s three investor-owned utilities met that goal.
This next mandate will be far harder to meet, said Dian Grueneich, a former California Public Utilities Commission member and now an attorney at Morrison Foerster LLP .
The transmission grid in many areas will require major upgrades to accommodate more intermittent renewable energy like solar and wind
Getting to 33 percent will also require billions of dollars in renewable energy investment, with or without government aid, which has boosted the industry with tax incentives and loan guarantees.
“At the 30,000-foot level, it’s more challenging. You have challenges in building transmission, permitting and project financing and integration to ensure grid reliability,” said Aaron Johnson, director of renewable energy policy and strategy at Pacific Gas & Electric Co., Northern California’s largest utility.
Johnson said the good news is that amid the added complications of bringing more renewable energy online, far more renewable energy developers and projects are available to choose from in selecting the projects with the highest likelihood of success — and prices that are more palatable ultimately to the PG&E customers who foot the bill.
“We’d like to be more discerning in what we sign and be more able to drive a good bargain,” said Johnson.
Solar developer Tioga Energy Inc. , based in San Mateo, develops solar projects in population centers where transmission lines already exist — a big advantage over competitors that are building large-scale renewable energy projects in unpopulated areas like the desert.
“We think one of the things this is going to do is stimulate new onsite generation programs,” said Marc Roper, Tioga vice president of sales and marketing.
The renewable portfolio program, started in 2003, required investor-owned utilities to get 20 percent of their power from renewable sources by 2010. PG&E missed the goal, and today, PG&E sources 17.7 percent of electricity from renewable sources. Utilities could be fined for missing the mark, but the CPUC hasn’t yet taken action. While former Gov. Arnold Schwarzenegger signed an executive order requiring the 33 percent by 2020 mandate, it didn’t carry the same weight as a law.
Adam Browning, executive director of the Vote Solar Initiative, a solar advocacy group in San Francisco, said the 33 percent renewable mandate “leads to business growth and that leads to jobs. And long-term regulatory certainty is they key to attracting investment.”
