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Tam Hunt: Act Now on the Right FIT for California
California is on the brink of passing into law a game-changing Feed-In Tariff (FIT) policy that will unleash the tremendous potential of renewable energy and provide a massive economic boost in the state. A lot rides on getting the support of state Sen. Christine Kehoe, D-San Diego, so get ready to encourage her to do the right thing.
Before getting into the details, however, let’s review the current state of affairs. Renewable energy and energy efficiency are on a roll: wind-power installations in the first half of 2009 — 4,000 megawatts — exceeded those of 2008, itself a record year. This happened amid the worst recession since the Depression, so this is quite an achievement. Solar-power installations in the United States and globally have, however, remained level with 2008, due primarily to the ailing economy. But level is better than declining. Energy efficiency and conservation (the latter is based on behavior change, while the former is based on technology) have also improved. For example, petroleum consumption in the United States is down about 7 percent compared to 2007, a remarkable reduction considering that the trend in recent years has been to increase 2 percent to 3 percent each year. This change, however, is due primarily to high prices and declining economic activity.
As many commentators have noted, and as I’ve mentioned in previous columns, President Barack Obama “gets it” regarding the need for a dramatic improvement in renewable-energy production and energy efficiency and conservation. He has already committed many billions of dollars for tax credits and other incentives on these items and they are starting to have an impact. However, I am not, as I wrote in my last column, happy about the proposed climate-change bill because I don’t think it will have much impact as written.
Adding to the urgency for aggressive action is a recent change of position at the International Energy Agency regarding the timing of peak oil — the point at which global oil production peaks and then declines. The IEA, in its 2008 World Energy Outlook, projected a peak in global conventional oil production sometime before 2030. This projection has since been moved up. In a recent interview with Great Britain’s Independent newspaper, IAE chief economist Fatih Birol warned of a potentially “catastrophic” supply shortfall as a result of lack of sufficient investment in new supplies and rapidly declining conventional oil supplies — at about twice the rate of previous projections. He also advanced the IEA’s projection of the conventional oil peak to 2020. This is practically around the corner and is yet another wake-up call to a world slumbering in the dream of infinite fossil fuel resources. We need urgent action to create a renewably powered sustainable world, with widespread use of electric cars and plug-in hybrid electric cars to replace our petroleum consumption.
This is where an aggressive Feed-In Tariff (FIT) comes in. AB 1106, carried by Assemblyman Felipe Fuentes, D-Los Angeles, is pending in Sacramento and will, if passed, be a game-changer for renewables in California. The state’s Renewable Portfolio Standard, or RPS, effective since 2003, has achieved very little in terms of bringing new renewables online. Last year saw an increase, but it was almost entirely from out-of-state facilities. We need to develop in-state supplies to localize our grid and keep the economic benefits here. The RPS has been so ineffective that the total percentage of renewable energy online in California, even with the out-of-state boost to our renewable-energy portfolio last year, has declined in every year since the RPS was implemented. The most recent report was just released by the California Energy Commission, and it found that the total amount of renewable energy was 10.6 percent in 2008, a decline from 11.8 percent in 2007. This is unfortunate and unacceptable.
AB 1106 promises to change this equation substantially because it would require utilities to accept up to 2 percent of their total demand, each year, from new renewable-energy facilities 10 megawatts and below; and ratepayers would never experience an increase in rates above 1 percent. A key additional feature is the certainty of the FIT price: this is not negotiated and would be set by the California Public Utilities Commission. For projects 5 megawatts and below, AB 1106 would create a “cost-based” FIT, which has been proven around the world to be unparalleled in bringing huge volumes of cost-effective renewable energy online. The pricing mechanism for projects between 5 and 10 megawatts is still being debated, but in any case, will be superior to the “market-price” mechanism that is used in the RPS program today.
With this transparency and consequent certainty for the marketplace (which, for the sake of full disclosure, includes my new company, Community Renewable Solutions LLC), we can expect many thousands of megawatts of renewable energy to come online quickly, in the form of “community-scale” projects that don’t require new transmission lines, which can take up to a decade to plan and build, and don’t require massive amounts of land. (I am fully supportive of wisely placed large renewable-energy projects but believe, for a variety of reasons, that the community-scale market segment can do as much or more than the large-scale market segment).
AB 1106 is better than a competing FIT bill, SB 32 carried by Sen. Gloria Negrete McLeod, D-Montclair, because SB 32 would only allow projects up to 3 megawatts (doubling the current limit of 1.5 megawatts), and with respect to pricing would only require the PUC to consider “locational benefits” of community-scale projects. This is an improvement, but we can do better. Worst of all, SB 32 contains a “poison-pill” clause that was included to appease the utilities that would prevent the PUC from implementing any additional FIT provisions in the future. The limited improvement offered by SB 32 does not warrant this poison pill. AB 1106, on the other hand, will introduce a tremendous FIT program that has been proven around the world. Accordingly, it is opposed by the utilities, which prefer the large-scale, utility-controlled generation model.
Please contact Kehoe, chairwoman of the Senate Appropriations Committee, and urge her to strongly support AB 1106 for passage this year. Kehoe’s support is required to get AB 1106 through her committee and this must happen within the week of Aug. 24 to have AB 1106 signed into law this year by Gov. Arnold Schwarzenegger. Call Kehoe’s office today at 916.651.4039 and ask her to support AB 1106. And click here to join the California FIT Coalition.
Again, if passed, AB 1106 will be a game-changer for bringing renewable energy online and boosting California’s economy. And as California goes, so goes the nation. We need aggressive action. Now. Help make it happen!
— Tam Hunt is president of Community Renewable Solutions LLC, and a lecturer in climate change law and policy at UCSB’s Bren School of Environmental Science & Management.
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» on 08.17.09 @ 07:49 PM
“We need urgent action to create a renewably powered sustainable world, with widespread use of electric cars and plug-in hybrid electric cars to replace our petroleum consumption.”
Two problems with this statement. It presumes that automobiles are the only consumer of petroleum, (ignoring buildings, factories, planes, trains, trucks) and it ignores the fact that most electricity (for those electric cars that don’t exist) is produced by coal, nuclear which is not renewable. But fear mongering, oversimplification of “solutions” and “urgency” always works in the manipulation of the uninformed masses by the progressive world doesn’t it?
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» on 08.18.09 @ 07:22 AM
There is urgency though. In a modern industrialized world where the current population far exceeds the ability of the biosphere to feed it and shelter it, we require an ever increasing amount of non-solar produced energy. Solar energy is all forms of energy that are available as a result of our fixed constant supply of photons from the sun. Bio-fuels, wind, solar cells are all solar energy sources directly or in directly. Hydro power is included since it is dependent on climate which is solar driven. We can tap these sources more effectively and wring more power out of them but not without more severe consequences to the rest of the biosphere. Fossil fuels are a great alternative, but since they are nothing more than stored indirect solar energy sources and finite to boot they are also not sufficient. We can mine all the uranium on the planet but that will still not be enough. At some point we have got to stop being energy scavengers (that’s you Tam) and develop a worldwide supply of cheap widely available energy that has few biological counterpoints. Right now that energy reservoir is our own planet core. Geothermal offers the best hope for not just sustaining our industrial world but expanding it to include the 5 plus billion human beings starving to death without it. Tam and his liberal friends believe they are being compassionate to humanity and responsible for our biosphere. But their solutions will drive the industrial world into poverty and starve most of humanity to death. At the same time the majority of humanity that does not give a hoot about long term environmental stewardship will tear the biosphere apart to maintain what is left of human life.
I know all of this sounds like science fiction, but unfortunately it is based on what is currently happening around the world. Tam, you cannot stop people from wanting a better life, a life like yours and mine, based on an abundance of cheap energy. Your paradigm does not support what you have already enjoyed and like it or not the genie is out of the bottle. The rest of the world wants what we have and none of your solutions support that. They don’t even support what we have today. So continue to push your renewable energy industry (since you’re so heavily invested in it) but sooner or later people are going to figure out that they are going to lose with it. Those of us truly looking out for others and our biosphere are looking at far more practical and permanent solutions that include everyone, not just the world’s elite.
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» on 08.18.09 @ 07:34 AM
Another economically unsupportable government program.
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» on 08.18.09 @ 01:57 PM
AN 50, you seem to have confused me with some other writer who opposes geothermal power. I have consistently and strongly supported geothermal. As I’ve written, geothermal power provides 5% of all of CA’s electricity currently and this could be increased quite a bit. Here are the limitations of geothermal: under today’s cost-effective technologies, geothermal resources are limited to just a few areas of CA (northern CA Lakes region, Salton Sea and a couple smaller areas). The Lakes region is pretty much tapped out, which leaves the Salton Sea and smaller areas. These are currently being developed, but it’s taking a long time b/c we need new transmission lines and geothermal development can be risky and time-intensive due to the uncertainty regarding well-drilling (you’ve got to find the right hot holes).
However, as you surely know, MIT came out with a great report on geothermal power a couple of years ago, The Future of Geothermal. They assessed the nationwide potential for enhanced geothermal systems (EGS) and found that with newer experimental technologies EGS could provide power literally anywhere in the US. Essentially, you just have to dig deep enough. But it currently is very costly, so can’t be developed at scale for a decade or more.
Ergo: geothermal can help some today, as a reliable baseload renewable energy source. But we also need massive amounts of solar, wind, biomass and improved energy efficiency and conservation.
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» on 08.18.09 @ 02:00 PM
Urgency for What,
“Cars” is, in this context, obviously a catchall term for vehicles.
The fact that, as you correctly point out, most of the US’s power comes from coal and nuclear (with a lot of natural gas and about ten percent renewables if we include large hydro in that term), supports my statements in my column. We need to get off coal quickly b/c it is the worst offender in terms of greenhouse gases. It is also far from infinite in supply. The US actually peaked in coal production, in btu terms, in 1998 and we’re on the downslope. Recent reports from CalTech and Germany have found that global reserves of coal are far far lower than previous estimates.
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» on 08.18.09 @ 04:22 PM
Urgency for What,
“Cars” is, in this context, obviously a catchall term for vehicles.
The fact that, as you correctly point out, most of the US’s power comes from coal and nuclear (with a lot of natural gas and about ten percent renewables if we include large hydro in that term), supports my statements in my column. We need to get off coal quickly b/c it is the worst offender in terms of greenhouse gases. It is also far from infinite in supply. The US actually peaked in coal production, in btu terms, in 1998 and we’re on the downslope. Recent reports from CalTech and Germany have found that global reserves of coal are far far lower than previous estimates.
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» on 08.19.09 @ 04:02 PM
Sorry for the confusion Tam, but I really do agree with you that renewables should be exploited and fast. Also I do know you promote geothermal. My argument is over what is a permanent solution for base load supplies that not only continues the strength of our industrialized western culture but has enough capacity and growth potential to bring the rest of the world up to our standard of living. Renewables won’t do it. That does not mean I am against them, they are necessary and therefore I am for them. However, the environmental community is taking a very idealistic attitude toward energy production that prioritizes renewable over more promising and reliable future supplies for supplies that starve advanced cultures and leave the third world in the cold. Drilling technology has advanced considerably over the last three decades and is getting to the point where tapping geo thermal maybe a possibility sooner than you think. I know many of you renewable boosters out there are worried that if a new energy supply paradigm comes in to play that it will make renewable sources irrelevant. Well that would be a valid concern particularly if you invested heavily in them. But your investments, whether financial or psychological, are not my concern, keeping the world going in the advanced direction and including everyone in the journey is mine. And believe it or not cost is a major factor. We simply cannot afford scavenging our way to more energy; the numbers do not support it. But like I have said many times before, solar PV, conservation, nuclear, geothermal and of course hydrocarbons are all part of the new paradigm.
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» on 08.19.09 @ 04:43 PM
Question: how many billions has the new administration invested in cars, auto companies, biofuels, and new roads and bridges?
After you’ve arrived at that figure, then tally up how much has been spent on public transport (or will be).
Then see if you can cite specific instances of the administration backing or funding new Wind, Solar, and Hydro projects that will generate new power.
Then ask yourself if it’s really true that “Obama Get’s It.”
G
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» on 08.19.09 @ 05:50 PM
Question: how many billions has the new administration invested in cars, auto companies, biofuels, and new roads and bridges?
After you’ve arrived at that figure, then tally up how much has been spent on public transport (or will be).
Then see if you can cite specific instances of the administration backing or funding new Wind, Solar, and Hydro projects that will generate new power.
Then ask yourself if it’s really true that “Obama Get’s It.”
G
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» on 08.20.09 @ 05:56 AM
Tom, you say that President Obama “gets it”. I would disagree to an extent. In the stimulus bill, he spends the vast majority on improving and adding to America’s existing transportation infrastructure - namely roads and bridges. A TINY fraction of the stimulus bill goes to improving or adding to rail and other public transit systems. Why not spend those billions on creating a European like rail transit system (but obviously better)?
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» on 08.20.09 @ 05:17 PM
LB, 80% of America’s urban population is low density (most of that single family housing) making a European style system impractical. Most of Europe’s urban centers are much denser and built up with very little development in between making mass transit not only practical but economical. Our country is more spread out, we like it like that. There is no indication that Americans want to give that up (look at the building height war here in Santa Barbara). So maybe Obama is right on this one, putting the money where it’s needed the most.
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» on 08.22.09 @ 01:06 AM
C’mon, get with it, California’s climate-stressed agriculture and cities will collapse with or without your green-washing fantasies. Water, oil and food shortages are coming with policy left up to your “game-changers.”
Your corporate outlook has locked-in catastrophic climate change. Consumption must drop to a net-zero energy, steady state economic level. The corporate-led political duopoly will collapse before the Democrats “get"a divorce from the failed “growth economy”.
FIT is failed policy. Get off the grid on a wide-spread basis.
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