Tuesday, September 1 , 2015, 11:48 pm | Fair 68.0º




Tam Hunt: The Future of Nuclear Power in California

We need to be responsibly planning for a potential nuclear-free future, as well as enact an effective feed-in tariff to strengthen the grid statewide

The Fukushima I nuclear power plant before the 2011 explosion.

The Fukushima I nuclear power plant before the 2011 explosion.  (Wikipedia photo)

By Tam Hunt |

It hasn’t been a good year for nuclear power. A federal court recently found that local storage solutions for nuclear waste, kept currently at each power plant where the waste is produced, have not been shown to be safe. The Nuclear Regulatory Commission, the federal agency that regulates nuclear power, must complete a full review or explain why one is not required.

Perhaps more seriously, the San Onofre nuclear plant (SONGS), owned and operated jointly by Southern California Edison and San Diego Gas & Electric, has been shut down since January because of unexpected and unexplained erosion of numerous pipes in its power generators. It is unclear when SONGS will be restarted — if ever. The power generators were almost new, having just been replaced in 2010 at a cost of $680 million — charged directly to us, the electricity ratepayers of California. This expense came on top of the many billions of dollars required for construction and other expenses.

Last year, of course, Japan’s unfortunate accidents with its Fukushima nuclear plant illustrated the potential harm that nuclear plants can wreak — and the inability of even the world’s best engineers to plan for all possible eventualities. As I wrote in a piece earlier this year, a number of countries are now phasing out nuclear power entirely as a consequence of Fukushima.

California is now considering how to respond to the SONGS shutdown. Do we need more power plants, or at least better local capacity, and if so, what kinds of power plants should be built to replace SONGS? Should the Diablo Canyon nuclear plant, located near San Luis Obispo and owned and operated by Pacific Gas & Electric Co., also be shut down because of lingering safety concerns related to local earthquake faults?

There are many questions and no easy answers. I’ve recommended previously that California agencies, as a first step, analyze how California could in theory cope without nuclear power. The California Independent System Operator (CAISO) has completed detailed modeling of various scenarios, in order to inform the California Public Utilities Commission long-term planning process. These scenarios don’t currently include a nuclear-phaseout scenario, but they should. This new scenario planning would be the first responsible step to dealing with the SONGS issues and broader nuclear safety issues.

The previous detailed statewide modeling completed by CAISO for the CPUC’s long-term planning found that we have a huge surplus of power statewide, and we will very likely maintain this surplus through 2020 even as we reach 33 percent renewables. It seems, given this huge statewide surplus, that we could probably phase out nuclear over the next decade without much difficulty — at least with respect to keeping the lights on.

However — and this is an important “however” — CAISO recently completed a survey of the backup power available in the SONGS area and concluded that there may be some cause for concern with respect to locally available backup capacity: “The absence of the San Onofre nuclear plant does not create systemwide issues but does create local reliability issues because of transmission constraints that limit imports into the Los Angeles Basin and San Diego areas.” The issue of local power needs is far less clear than the statewide discussion.

Some policymakers and advocates are currently considering the merits of investing heavily in transmission resources, in order to ensure that the power surplus available in California more generally can reach the areas where it’s needed, like the SONGS area. However, a very important part of this conversation must be consideration of non-transmission alternatives, such as local power options, known as “wholesale distributed generation,” demand response and energy efficiency. Wholesale distributed generation (WDG) is defined as renewable energy generated close to load.

Numerous examples support the ability of WDG to come online quickly and massively — with the right policies in place. California itself has demonstrated this clearly, back in the 1980s and 1990s, during which time we added more than 10,000 megawatts of new renewable energy generation from geothermal, wind, biomass, hydro and solar power. This transformation of our power sector was made possible due to California’s robust, first-of-its-kind “feed-in tariff,” which provides a power purchase contract to any renewable energy developer meeting certain criteria. The contract provides a set payment over a set period. The major benefit of feed-in tariffs (FIT) is certainty, which every business knows is the key to successful markets.

(FITs are also known as CLEAN policies now, which stands for Clean Local Energy Available Now, part of an attempt to rebrand the name for better popular support.)

California’s experience with its FIT in the 1980s and 1990s led to jurisdictions such as Germany, Italy, Spain, Portugal, China, the United Kingdom and dozens of other countries adopting their own robust FITs. FITs are now the preferred policy mechanism around the world for bringing renewable generation online quickly and efficiently. Wisely implemented FITs can also be more cost-effective than alternative policies such as tender systems or auctions because of the greater market certainty, and thus far lower risk to developers and financiers, that FITs provide.

Along with the nuclear-phaseout scenario planning mentioned above, California should enact a robust FIT sufficient to replace at least the capacity of SONGS. This will, among other things, ensure that our power grid is strengthened through large amounts of local capacity, in the SONGS power area and elsewhere around the state. A 5,000-megawatt statewide FIT program, with clear and certain pricing and expedited interconnection procedures, will achieve many additional benefits as well as ensuring that local capacity requirements are met in the SONGS area.

FITs are not dead yet in California today, but they are dying — unless policymakers wake up to their potential. The CPUC just issued a terrible decision implementing what was already a very weak FIT bill (Senate Bill 32), three years after this law was passed. D.12-05-035 weakens SB 32 to the point of undermining the law entirely. The key problem is that the CPUC decision enacted an adjustable pricing mechanism that will ensure a “race to unviability.” This is the case because the price offered to developers will drop so quickly that developers will be heavily incentivized to accept contracts at unrealistically low prices. It’s probably best at this point to scrap the new program under D.12-05-035 entirely and go back to the drawing board with a new bill.

A bill to enact a robust and effective five gigawatt FIT should ensure stable and realistic prices for renewable energy projects 10 megawatts and below. This is a scale that can be built out quickly around the state, if good FIT and interconnection policies are enacted. At the same time, ratepayers should be protected from higher prices than are justified through planned and transparent “degression” of prices, under which prices offered to developers fall steadily as capacity is taken up. This is similar to the policies enacted by D.12-05-035, but the price adjustment mechanism adopted in that decision fails on the details of its implementation, primarily due to the fact that the program is far too small (it added only 15 megawatts to an already-existing but highly ineffective FIT program, for a total of only about 200 megawatts of new contracts state-wide) and the price adjustments occur far too quickly. These are problems that can easily be remedied with a new bill.

The recent events at SONGS have resulted, perhaps serendipitously, in what may be the smoothest path to a nuclear-free future for California. Historically, any discussion of shutting down nuclear plants has been highly contentious in large part because of the many jobs at stake. No major releases of radiation have apparently occurred at SONGS, so this has not to date constituted a major nuclear accident. It was averted before that happened. The shutdown also happened in a way that was completely independent of politics or policy; rather, the shutdown occurred due to bad engineering.

Perhaps most importantly, if SONGS is shut down permanently, it is almost a certainty that the many SCE and SDG&E employees at SONGS will be redeployed elsewhere within those companies and many will probably continue to work at SONGS as it is de-commissioned — a process that can take a decade or more.

In sum, California is looking at a future where nuclear power may be phased out involuntarily, in part or wholly, in the next few years. At the very least, we need to be responsibly planning for a potential nuclear-free future. And at the same time, we should enact a robust and effective feed-in tariff to strengthen our grid statewide, while also adding numerous jobs, growing our economy and reducing our greenhouse gas emissions.

The Los Angeles Times editorial board recently agreed with me, stating: “Now is the perfect time for Edison, and the state as a whole, to begin the planning for a non-nuclear future.”

— Tam Hunt is a Santa Barbara attorney, writer and aspiring filmmaker.




comments powered by Disqus

» on 06.29.12 @ 12:49 PM

Tam, reading this I get the sense that you are trying your best to summarize and clarify a byzantine web of regulations, political decisions, economics and science, and by necessity you’re leaving out a lot. Add to that all the acronyms and it makes for some tough, but informative reading. I hope Noozhawk sees fit to make it a series rather than a single article. One question I have is about the surplus of power, which I was unaware of. How is this surplus of power actually manifested? Is it a storage problem, or is it more that we have more generating capacity than we really need? If it is a storage problem, can decommissioned nuclear plants be converted to storage facilities?

» on 06.29.12 @ 01:39 PM

There you go again Tam.  Selective listening and fact presentation will always lead a conversation where YOU want to take it.  If you want real facts on safety, why not talk to experts like Dr. Budnitz at UC Berkeley, who has been sitting on the Independent Safety Commission overseeing Diablo Canyon power plant operations for twenty years?  Or how about not engaging in intellectual dishonesty and fearmongering to push your agenda? 

The fact that SONGS shut down operations is an indication of a system that works, not of failure.  The pipes you mention were not failing, but were experiencing excessive wear due to unexpected vibrations from the new generators, and were not failing.  And they aren’t even part of the primary containment system.  In accordance with well-established regulatory requirements, the system was shut down to evaluate things.  All part of a well-oiled safety system.

What happened at Fukushima was a result of a design flaw in the placement of their power generators, which by the way, sustained no damage from a 9.0 earthquake, but were overwhelmed by the subsequent tsunami.  To date, not one person has been reported as dying from either the earthquake in Japan, or from acute radition poisoning.  And yet, you try to use it as the prime example of why we need to shut down what has proven time and time again to be the most clean and economic source of energy we have.

While you’re at it, why not talk about your beloved wind turbines that are killing hundreds of raptors a year?  Or your green technology solutions that are poisoning our environment at a much more rapid pace than previous technologies?  Is it because the manufacturing takes place overseas and therefore can be overlooked?  Like not counting people who have stopped looking for work in unemployment figures.  It’s intellectually dishonest.  But there’s really no great surprise there, is there Tam?

» on 06.29.12 @ 01:50 PM

Yep, nukes are a problem.  So is oil drilling.  Coal is dirty And windmills kill birds - lots of them.  And solar arrays displace lizards.  And fracking, well, there is a lot of concern so not much data.  FITs are a good idea, but hardly a massive source of baseload power.

So, Tam, instead of railing against the villain of the day, give us your complete energy policy.  The first paragraph contains a clue.

» on 06.29.12 @ 03:34 PM

You make it sound so easy, Tam.  Even if we were to “phase out” nuclear power generation in California, it would be many years before the PUC, let alone any other regulatory agency, would approve building permits for the replacements necessary to generate the power SONGS generates.  And fear, uncertainty, and doubt does not make a generator dangerous.

The future of power generation is one that incorporates all forms of generation.  If you asked around at Cal-ISO, you’d find that out.  Not all forms of renewable energy can produce power at all hours of the day.  The fearmongering has to stop.

» on 06.29.12 @ 07:25 PM

Wind turbines killing birds? That’s really touching that you guys are so concerned about the birds. I’m sure you don’t have a cat, or any glass windows in your house. And I’ll be right behind you in your campaign to eliminate high tension power lines, automobiles, and any large building with lots of glass, because the fact is that each one of those things kills hundreds of times more birds in a year than wind turbines. Oh and lets get rid of all those pointless towers at our airports and pesticides in our farms!
No, folks that is a myth, albeit one that had some truth at one point. One of the first turbine farms (Altamont, Ca) was located very close to a bird sanctuary and in the path of a known bird migration route. It killed a lot of birds and designers learned not to place wind farms in such locations. If you’re looking for the dark side of wind energy you’ll have to look elsewhere.

» on 06.29.12 @ 07:43 PM

Really noleta?  You’re sure about that?  How about an article written just last week by a bastion of conservative thought, Nature Journal - http://www.nature.com/news/the-trouble-with-turbines-an-ill-wind-1.10849

If you really look hard, you would find articles, papers and studies written as far back as a decade ago.  Sure, they are trying to fix the problem.  But that does not negate the validity of my statement.

» on 06.29.12 @ 09:01 PM

Hey noleta res, do you get the concept of sarcasm?

» on 06.30.12 @ 03:20 AM

John, yes I do get the concept of sarcasm. In fact, (cough) I think you’ll find an example of it in my previous post. Are you implying that when you said “And windmills kill birds-lots of them”, it was also an example of sarcasm? I guess I’m just too coarse to have noticed. Sorry about that.
And yes socal I am sure about that. In fact the very article you link to says the same thing that I do: the number of bird deaths attributable to wind turbines is miniscule compared to other causes. Did you even read it?
Yes your statement was factually correct: wind turbines kill hundreds of birds per year, and some are struggling species. Yes it’s a bad thing. But you’re familiar with the phrase “crocodile tears”, I’m sure, and that’s what that one aspect of your criticism sounds like to me. Maybe I’m wrong and you’re a dedicated environmentalist concerned for all endangered species, but I sorta doubt it. I’ve just heard too many people use that line who couldn’t possibly care less about birds but just want to beat up wind energy.

» on 06.30.12 @ 04:57 PM

Look guys, the biggest problem with wind is it is not a steady state supply and therefore must have a storage system to capture surplus for when the wind doesn’t blow, same with solar. The base load needs to be supplied with a steady state source and the best is actually another source environmentalists love to hate, hydroelectric.

But what I can never get Tam to admit or even become cognizant of is the damned costs. Cheap energy in abundant supply is the best thing to ever happen to the poorest of humanity. Expensive energy throttles all human progress backward and these idiots don’t see it. That is most likely because they have grown up in well to do environments with excess income and it never occurs to them that 80% of the rest of the planet lives on subsistence.

Yes these wholesome white rich little liberals living their sheltered cloistered lives never think for once that the expensive energy they believe will temper the fat bloated ranks of their population is really friggen bad for the worlds poor. I keep pounding that point home to Tam and he still doesn’t see it.

As for nukes all the scare stories you hear are just that, stories.

» on 07.01.12 @ 02:02 PM

My point was simply that all forms of energy generation have their problems.  Apparently I made that point to obliquely (is that a word?).

Here’s a sample simple energy policy:  recognition that there is no one solution; oil and gas (since they pack the most energy into a given weight and volume) are good for things that move, like cars, planes, trains; wind, solar, nuclear, clean coal (if there is such a thing)are good for things that don’t move (power plants).

» on 07.01.12 @ 10:23 PM

John i agree, and that’s pretty much how it is. I don’t think much of electric cars for the auto-addicted masses, although some vehicles seem to do ok on electric power. Making and disposing batteries is still horrible for the environment. I actually think nuclear power might be worth it if they solved its two major problems: long-term storage and safety. I know the industry has a pretty good safety record overall, but the potential for catastrophe is still there. Designs have improved, however and maybe to an almost acceptable level, but the cost of construction now is so prohibitive. As for storage, unless vitrification becomes easier I don’t think they’ll come up with a way to keep nuclear waste out of the environment for its incredibly long lifetime.

» on 07.02.12 @ 02:39 AM

Noleta, if you argue with these guys they will squirt you with vinegar and water.

Cardinal Massingill is a douche bag.

» on 07.02.12 @ 11:25 AM

Noleta that is a sound and rational. Nuclear safety is unparalleled in industry and adds 75% of the cost. The biggest problem with it right now is that we wasted 30 years not expanding and therefore improving with better technology the control and safety systems currently available. We rely far to heavily on humans for safety and unfortunately humans are the biggest risk. The storage issue is a red herring. Put the stuff in deep underground storage in less dense arrangements so that heat build up is minimized. After all our planets core heat is due largely by radioactive decay.

As for transportation you and John are spot on. Gasoline has 80 times the energy density of the best battery today. All life on earth capitalizes on the tremendous energy density of complex carbon fuels and why we humans think we can do something different is beyond me.

However, Tam has hit the finite fossil fuel bell hard and he is right. Despite claims that we have more than a 100 years worth of oil, 300 years worth of coal and 400 years worth of natural gas these fuels are still finite. We need to have a system in place that can extract CO2 from the atmosphere and turn it back into carbon fuel. Relying on plant life will never achieve the quantity necessary to advance human living standards.

The best way to do this is exploit all sources of energy now, with particular emphasis in those with the longest supply trains, nuclear and geothermal. The other alternatives, solar, wind and biomass are far less dense, require far too much energy to exploit and will thus remain costly. At best they will become conservation supplies, helping to reduce demand on our finite fossil supplies while we ramp up hydro, nuclear and geothermal as our long term base load supplies.

But we must do this with one thing in mind and that is continual cost reduction. There is no way we can extract CO2 and return it to the transportation fuel supply without having copious amounts of cheap base load supplies for electricity. It took nature millions of years to make oil. Oil is nothing more than very dense solar and geothermal energy packed into a complex hydrocarbon molecule. To do this on a massive scale would require far more energy than we produce today. At least ten times our current production rate.

Another alternative would be to augment that CO2 sequestration by using less dense fossil supplies like methane as a conversion source (you are already half way there). But that would have a limited life as well.

What everyone must realize is that energy costs must come down, not go up, unless you are in favor of returning to the dark ages. Cheap energy is a liberator and mostly for the poorest among us, not the wealthy.

» on 07.02.12 @ 12:46 PM

Interesting, and typical, post, rambler.  Perhaps you don’t recognize a civil debate/discussion when you see one.

» on 07.02.12 @ 01:55 PM

AN50, I have demonstrated repeatedly the cost benefits of renewables and increased efficiency. You’ve simply ignored my data and arguments b/c you’re apparently ideologically unable to recognize these benefits. Nuclear is EXPENSIVE. Always has been and always will be. The CA Energy Commission’s latest levelized cost of electricity report calculates that new nukes in CA would cost literally 34 c/kWh - far higher than wind or solar.

As for wind and solar needing storage, this is just wrong. We can get far higher wind and solar before storage is required, as I’ve also demonstrated to you more than once. Modern grids always have a built in reserve of about 18%, so this allows for integrating up to 15% or so of variable renewables like wind and solar, along with good forecasting and some other techniques, before storage or a single kW of backup power is required. Many studies in the US have shown this to be true and we’re now seeing various grids around the world demonstrate this.

In California, a recent detailed report from CAISO found that we can get to 33% renewables by 2020 (current law requires this) without adding a single kW of backup power. Why? Because of our existing reserves.

And of course many renewables like biomass, geothermal and hydropower are actually baseload sources of power.

So, please, stop with the silly and baseless limousine liberal arguments. As I pointed out in our last go-round, on my last article on the peak oil problem, you are suffering from cognitive dissonance in that you recognize the reality of peak oil but you don’t seem to recognize the inevitable price impacts that peak oil will bring.

The one wrinkle in these arguments is that natural gas is currently extremely cheap. But it’s becoming clear that this is unlikely to last and, in a decade or two, “peak gas” will have the same impact as peak oil, along with “peak coal,” “peak uranium,” etc. Let’s plan for an orderly exit from the fossil fuel era -  not a slow panic.

» on 07.02.12 @ 05:25 PM

If you say so Tam.  Everyone is painfully aware of your agenda and propensity to overlook some inconvenient facts. 

For example, why not talk about some of your favorite European countries going bust trying to pay for your “cheap” energy sources?  How about the green energy companies receiving government subsidies and loan guarantees going bust because there’s no market and they can’t deliver? 

I’m pretty sure that your solution is “force everybody” through laws and regulations to follow what you believe because you’re right and everyone else is stupid.  Yes, we’ve heard it all before.  Progressives all sing the same song and dance.

» on 07.02.12 @ 09:31 PM

Tam, I think we are talking apples and oranges here. I have no problem with wind or solar making up some portion of the supply, as long as we have sufficient steady state base load. Wind and solar are not steady state, they are variable and highly dependant on one of the least predictable constituents on our planet, weather. You have to admit that if we were to turn the bulk of our grid production over to the randomness of weather then we would be in a heap of trouble, unless we could generate in excess of demand and store that excess capacity some how for when the sun don’t shine and the wind don’t blow.

My whole point has always been cost. Not steadily increasing but radically reducing it. Abundant cheap energy is a liberator. It would be the source of future CO2 sequestration to generate new supplies of carbon based fuel for transportation. Yes solar and wind will be a part of that scenario, but not the main source, that will come from further exploitation of hydro (another way to store surplus wind and solar by the way), nuclear and geothermal. Geothermal will, of course, be the main source of energy on planet earth for human exploitation, as it will out last all other supplies by millions of years.

Your motivation is based on fear of carbon fuels and a heavy investment in wind power. My motivation is much longer in time and not based on the irrational fear that our activities in releasing naturally sequestered carbon will destroy the planet. That allows me to explore much more practical scenarios that have a much more stable output, much lower costs and actually do a better job reducing carbon dioxide output, while at the same time bringing the very wonderful benefit of cheap abundant energy to the world’s poor.

As I have said before the less stable more weather dependant sources will play a role, but that role will largely be confined to conservation of base load supplies rather than replacing them. That is why nuclear even though expensive will be an important base load supply, I can turn it on even when the sun don’t shine and the wind don’t blow, my friend. And as much as you green weenies hate hydro, it may be the one thing that actually makes your unreliable weather dependant supplies more viable by providing kinetic storage of surplus output.

» on 07.02.12 @ 09:45 PM

SoCalJay, you’ve got the history of Solyndra very wrong. Solyndra, one of a handful of US solar companies that have gone bankrupt in the last year or so, did so not because of the lack of a market for solar panels (the US market doubled in 2011 alone, and almost doubled world-wide, with an average 70% growth rate over the last six years) but because of competition from Chinese low-cost solar panel manufacturers and because they were working on a new type of technology that had no pathway to success given the Chinese competition with traditional technologies.

Chinese panels have flooded the markets in the last few years. This is a very good thing from a cost point of view because all of us are now enjoying far lowest cost solar power, dropping about 40% in just the last two years. But it was very very bad for US manufacturers who generally just can’t compete with their Chinese competitors, particularly as solar panels have become a commodity product. 

These problems actually highlight the problem of US competition in this immense new global market. Solyndra’s failure should lead to a doubling down of investments in these kinds of companies - if we have any hope of competing in global markets instead of giving up and letting the Chinese and Europeans own this market.

As for European countries and the cost of renewables vis a vis their economic difficulties, the poster child is Spain. Spain put in place an overly generous “feed-in tariff” for solar power in 2008, which was way too popular and Spain as a consequence cut back the price offered dramatically. 2009 was then a bust year for solar, but it has resumed fairly good growth since. Wind and biomass never faced those issues because the pricing offered made more sense. Spain now gets about 25% of its power from wind and solar.

More importantly, solar power has had as far as I can tell a negligible impact on Spain’s current economic difficulties. Let me know if you find anything otherwise. Their economic problems stem from overly high private bank and corporate debt, and far too high borrowing costs resulting from the lack of confidence in the bond market. The so-called “tariff deficit” relating to their renewable energy feed-in tariff shouldn’t be dismissed, because it is large, but it is not just from renewables and it, again, has had a minimal impact on the broader problems Spain is facing. At the same time, many countries, such as Germany and Italy, have had similar policies in place in the last few years and have seen their renewable energy sectors grow dramatically, without the concomitant tariff deficit.

More to the point, renewable energy is, today, actually competitive with status quo sources of energy in many situations and doesn’t require an above-market feed-in tariff to incentivize the various technologies. Some countries have chosen to put in place above-market FITs in order to jump start their markets for renewables, but CA, for example, has always offered an “avoided cost” FIT, which means that prices are pegged to status quo sources of power like natural gas. This resulted in the 1980s and 1990s in a boom for renewables, when most of our existing capacity came online. Since then, our renewable energy market has not been so hot and I and many others are urging a return to those policies because we’ve lost our lead in renewables. It’s time to get serious again about shifting away from fossil fuels.

» on 07.02.12 @ 11:49 PM

Yeah, gotta watch out for the yellow peril.  Pretty embarassing when a totalitarian country can best a free one in a competitive market.  The fact is that Solyndra sun=, which might lead one to believe the the idealogues in government aren’t the best ones to invest the taxpayers’ money.

Tam, maybe you’ve done so before, but can you provide one example of renewable power that is more cost effective that oil, gas, or nuclear, on a btu or therm basis.  No subsidies allowed

» on 07.03.12 @ 12:36 AM

Tam, you just made my argument for me.  Thank you good Sir.

» on 07.04.12 @ 04:38 PM

John Lock, the large majority of CA’s renewable energy came online in the 1980s and 1990s (we’ve installed very little since then) under the federal PURPA feed-in tariff law. This law provided contracts to renewable energy sources at a set price for a 20-year period, providing for the first time access to third parties to sell power to consumers, instead of purely the monopoly utilities. All of these contracts were cost-effective, by definition, because they were pegged literally to the anticipated cost of natural gas power. CA’s latest solar efforts, primarily in the form of the CA Solar Initiative, which is a net-metering program and not a feed-in tariff program, have not been cost-effective compared to natural gas unless we compare to peaker plants, in which case they have been cost-effective (and solar is quite a reliable peak source of power, so it’s a fair comparison).

» on 07.05.12 @ 08:09 PM

Tam, you have simply restated your claim that these sources are more economical than oil and gas.  I asked for data.  Proof.  Evidence.  Todays prices, todays dollars.

» on 07.10.12 @ 03:13 AM

John Locke, I guess you didn’t understand my response. CA’s PURPA contracts were pegged to the cost of generation from natural gas power plants, which means the cost of renewable generation under these PURPA contracts had to be at or below the cost of power from natural gas plants. So (again), by definition they were cost-effective. Here’s more info on PURPA:

http://en.wikipedia.org/wiki/Public_Utility_Regulatory_Policies_Act

The key phrase here is “avoided cost.” This means in the case of CA that if a renewable energy developer could sell power under a long-term contract at or below the “avoided cost” of status quo power sources like natural gas generation, then the utility had to buy that power. The idea is that renewables should be encouraged by requiring their purchase if there was no cost differential. So the vast majority of CA’s renewable generation, amounting now to about 12% state-wide, came online under this law, and it was at or below the avoided cost of natural gas power, by definition.

More generally, and more relevantly in terms of moving forward, here’s a recent CA Energy Commission report attempting an apples to apples comparison (“levelized cost”) of the cost of power from various energy sources, including renewables, natural gas, coal, and nuclear. See page 31 for a comparison of the costs of the various technologies for new plants coming online in 2018:

http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CFMQFjAB&url=http://www.energy.ca.gov/2009publications/CEC-200-2009-017/CEC-200-2009-017-SD.PDF&ei=tsf7T4T8NMbGqQGPoKSMCQ&usg=AFQjCNHoiIB_IE4YrT6KGfW5VE1MYcEaAg&sig2=OvSx3O6tDV0URH57mKTbGw

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