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Tam Hunt: Spain, Portugal Lead the Way on Renewable Energy Transformation

The CLEAN California bill is designed to achieve the same successes seen elsewhere

Rapid energy transformation at the national level is possible. Transformation is also necessary if we are to mitigate the impacts of climate change and peak oil.

The kind of transformation we need in the United States has been demonstrated vividly by an increasing number of nations shifting rapidly to a renewable energy economy. Spain and Portugal are currently the most powerful examples of this transformation.

Spain has grown from just 2 percent wind and solar power to almost 20 percent in a decade. Figure 1 demonstrates this growth at the same time as Spain’s electricity consumption grew rapidly — by 50 percent — from 2000 to 2008, only to drop equally rapidly from recession and price-induced conservation since 2008.

Spain now enjoys about 35 percent total renewables, when we include large hydroelectric, with the rest of its power coming from natural gas, coal and nuclear.

Moreover, Spain is a good comparison to California because its population and climate are very similar to ours.

Figure 1. Spain’s electricity sector transformation, 2000-10
Figure 1. Spain’s electricity sector transformation, 2000-10. (Source: Energy Information Administration International energy statistics)

Spain’s solar sector plummeted after 2008, however, because of major changes in its feed-in tariff law prompted by broader economic problems. A number of solar companies recently sued the Spanish government for retroactively changing contract prices under the feed-in tariff, illustrating the need to craft policies wisely and take into account various scenarios.

Portugal has demonstrated an even more remarkable transformation in the past five or so years. In 2004, Portugal had just 2 percent wind and solar, but by the end of 2009 (the latest year for which data are available), this had risen to more than 15 percent. Its electricity consumption remained fairly level during the past decade.

Figure 2. Portugal’s electricity sector transformation, 2000-09
Figure 2. Portugal’s electricity sector transformation, 2000-09. (Source: EIA International energy statistics)

Now, let’s compare these nations to California, generally perceived as the leading state on renewable energy in the United States. Figure 3 shows that wind and solar penetration has generally been stagnant in California for the past decade. It’s only in 2009 and 2010 that a pickup has occurred, but wind and solar have remained below 3 percent despite some recent growth. The rest of California’s renewables come from geothermal, biomass and small hydro (large hydro doesn’t count as renewable under California law).

Figure 3. California’s electricity sector, 2000-10
Figure 3. California’s electricity sector, 2000-10. (Source: California Energy Commission)

It’s important to note that this figure does not include net-metered solar because only wholesale data are included. However, if we included net-metered solar (under the California Solar Initiative), it would add only a small amount to the total amount of wind and solar. This is the case because even though California’s net-metered solar market is by far the largest in the country, it is still a small fraction of the wholesale renewable energy market. Also note that these figures are for California as a whole, not just for the big three investor-owned utilities, which are tracked in CPUC reports and are a little different.

It’s also important to note that 2010 was a good year for California’s renewables market, adding twice the megawatts than 2009. Early numbers (not yet finalized by the Energy Commission) suggest that the total renewables went up a couple of percentage points again in 2010 (perhaps as high as 18 percent for the large utilities and about 16 percent for the state as a whole), so the Renewable Portfolio Standard is starting to have a significant effect — eight years after it became law. We are, then, on track to achieve the 20 percent mandate by 2012 or so, in compliance with current law. It is far less clear if we are on track to achieve the more ambitious 33 percent mandate by 2020.

Last, let’s compare to Texas, the leader in the United States on wind power. Texas grew from almost no wind power in 2000 to about 10,000 megawatts of wind — nearly 8 percent of Texas’ total electricity consumption — and has at times provided literally one quarter of all electricity in Texas. ERCOT stated in a recent news release: “ERCOT recorded a new wind output record of 7,227 megawatts (MW) at 7:16 am on Dec. 11, 2010, representing 25.8 percent of the load at the time. The new peak beat the 2009 record by almost 1,000 MW.”

Texas has almost no solar power generation.

Figure 4. Texas’ electricity sector, 2002-10
Figure 4. Texas’ electricity sector, 2002-10. (Source: Electric Reliability Council of Texas)

Let’s compare all four. Each jurisdiction is different, of course, with its own mix of land use and pricing policies for renewables. Interestingly, California’s boom period for renewables occurred in the 1980s and early 1990s, reaching the high teens before diminishing as a percentage from the early 1990s until 2007. This was a result of the first robust feed-in tariff in the world: the Public Utilities Regulatory Policies Act, which mandated that states offer contracts to renewable energy and co-generation producers. California implemented this law aggressively and saw about 10,000 megawatts of wind, solar and geothermal come online in just a few years — until the boom ended because of a reduction in fossil fuel costs, which acted as the proxy for contract pricing, as well as an end to tax credit programs.

Similarly, the boom in Spain and Portugal has been prompted by feed-in tariff laws. Spain’s solar sector, as mentioned, is suffering from dramatic changes to the law, but the wind power sector — far larger than the solar sector — continues to grow dramatically. So the debate over feed-in tariffs will continue, but it is simply not the case, as some critics insist, that countries such as Spain show the folly (boom and bust) of feed-in tariffs for all renewables. The discussion in this article demonstrates this point.

I also need to mention Germany and China, which have seen similar very robust growth in renewables. While their capacity additions are very impressive — Germany has by far the largest solar capacity and China now has the world’s largest wind power capacity — their percentage of renewables is not as impressive as Spain or Portugal. Germany’s wind and solar percentage rose from 2 percent in 2000 to about 7.5 percent at the end of 2009; China is still below 1 percent wind and solar even though its wind power sector doubled each year in five of the past six years (which will lead to very high penetration if this growth pace continues).

Another very encouraging trend is the decline in wind and solar power costs over the last few years, which I wrote about recently. Wind and solar are, when compared accurately to the appropriate baseload, load-following or peak power resources, cost-effective today. This is a very important point that should be spread far and wide.

So what is California to do in light of these analyses?

My client, the Clean Coalition (formerly the FIT Coalition), is leading the campaign in California to reach the governor’s target of 12,000 megawatts of distributed renewables. We are working to create CLEAN (Clean Local Energy Accessible Now) programs that use the best elements of successful feed-in-tariff programs around the world, save money for California ratepayers and create good local jobs. A recent report from the Center for American Progress provides strong support for CLEAN programs as effective tools for promoting renewables.

Our goal with the CLEAN California bill is to achieve the same transformation Spain, Portugal and Texas have experienced in the past decade — and that California achieved in the 1980s.

— Tam Hunt is president of Community Renewable Solutions LLC, which is focused on community-scale renewables. He also is a lecturer on climate change law and policy at UCSB’s Bren School of Environmental Science & Management. Click here for his blog, Thought, Spirit, Politik.

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