9.4: Energy

Many of California’s climate policy efforts have been economy-wide— that is, they aim to reduce greenhouse gas emissions in many different sectors, such as industry, electricity generation, and transportation. However, legislators have also pursued more-focused efforts aimed at increasing energy efficiency and the use of renewable energy in the state. These efforts, which have led to California’s having one of the least-carbon-intensive electricity supplies in the United States (Figure 9.4.1), date back to the 1970s, before climate change became a major issue. Instead, the original motivations included the oil crisis and fears over nuclear power.

Figure 9.4.1 Electric power carbon intensity, by state, 2017. California has the eighth-least-carbon-intensive state power generation mix in the US. Most of the states that are less carbon intensive have much smaller populations and rely on hydroelectric or nuclear power. Data from US Energy Information Administration.

To understand California’s energy policy history, you have to understand the state’s geography, its development history, and a little bit of its political culture. First, let’s think about the geography. California is a large state in terms of land area—a state that’s as big as many countries around the world. It has no coal, which has significantly influenced its energy pathway. Otherwise, however, it has an abundance of energy resources. It has a lot of oil, especially down in Southern California. It has a little bit of geothermal. Unlike the other western states or Appalachia, California has a large volume of water runoff from the Sierra Nevada, which has been tapped for hydroelectric potential. There’s a lot of wind power, especially around Altamont Pass, near San Francisco, and down south in the Tehachapi Mountains, just north of Los Angeles. And California receives many hours of sunshine, with concomitant potential for solar power.

But renewable energy was not on the minds of energy planners around the middle of the twentieth century, when California’s population and economy were rapidly growing. At the time, the assumption was that electricity generation capacity had to keep pace with population and economic growth—they were coupled together. Nuclear power was seen as the best way to scale up the supply to meet the forecast demand; a series of planned nuclear plants on the coast from Southern California all the way up to the north would cool their reactors with the abundant waters of the Pacific. However, public opposition— partly due to the risks posed by earthquakes, and partly because of consciousness around the disposal of radioactive waste—frightened the public, prompting many to say, well, we don’t want nuclear either. In 1976, state legislators placed a moratorium on new plants, pending a permanent solution to nuclear waste.

Energy planners were then faced with the dilemma of how to increase generation capacity without relying on nuclear, coal, or oil. Nuclear had been ruled out because of safety and waste concerns; the state had few reserves of coal; and oil, which in any case is a poor fuel for producing electricity, was in question following the embargo of 1973. Moreover, plentiful supplies of natural gas were not yet available in California.

In response, the legislature passed the Warren-Alquist Act in 1974 to create the California Energy Commission (CEC). While this might seem like a trivial move—yet another bureaucracy—the CEC created the framework to plan for energy in a comprehensive manner. The CEC preceded the federal Department of Energy (which was founded in 1977) and had the money and staff to plan in a systematic way, rather than lurching from one project to another.

Renewable energy was one area of policy that the CEC pushed forward, with large-scale wind energy projects as the initial focus. Subsequently, the state’s Renewables Portfolio Standard (RPS) required utilities to source a certain proportion of retail sales of electricity from renewables. The first RPS, in 2002, was set at 20% by 2017. Over the years, the targets have ratcheted up, with a 2018 law setting an RPS of 60% by 2030 (Table 9.2.1). The same law sets a goal of carbon-free electricity by 2045, although the carbon-free definition encompasses several sources that do not qualify as “renewable” under the RPS, such as nuclear and large hydroelectric dams.

The state is already much of the way toward the 2030 and 2045 goals. On a sunny day—not too hot, not too cool—in March of 2017, 40% of the state’s electricity was being generated by utility-scale solar, that is, large installations such as solar farms in the desert. Adding in the solar panels that are dotting thousands and thousands of rooftops throughout California, that number came to about 50%. Figure 9.4.2 charts the dramatic growth in solar capacity, and Figure 9.4.3 illustrates the evolution of energy policy in California over the last 50 years.

Figure 9.4.2 Interconnected solar in California. Through 2016, solar energy grew almost exponentially. In 2017, capacity reached almost 6,000 megawatts (MW), up from 228 MW just 10 years earlier. Residential rooftops account for most of the capacity. Reproduced with permission from Next 10.

Local governments, meanwhile, have been pushing forward with even more ambitious plans for renewable energy. Community choice aggregation (CCA) allows cities and counties to make energy supply decisions for their communities, taking over from investor-owned utilities. CCA programs have been launched in San Francisco, Los Angeles, and many other parts of the state and have normally aimed for higher shares of renewable power than the state-mandated minimums. Collectively, CCA programs are likely to mean that the targets in the state’s RPS are exceeded by 9% in 2025, equivalent to 1–2 MMT CO₂e.

Figure 9.4.3 Rancho Seco. The decommissioned Rancho Seco nuclear power plant in Sacramento County now hosts a solar farm and is under contract to the Golden 1 Center, the home of the Sacramento Kings. At full build-out, the facility will provide up to 100 MW of power, taking advantage of the transmission lines and other infrastructure built for the nuclear plant. Photograph by Hajhouse from Wikimedia Commons.

Less visible than wind turbines or solar panels, but just as effective in reducing carbon emissions, have been the CEC’s efforts to promote energy efficiency. Partly, the CEC acted through direct regulation, setting efficiency standards for refrigerators and, later on, for such varied appliances as swimming pool heaters, furnaces, and computers. But the CEC and its partner agency, the Public Utilities Commission, also worked to transform the motives of utilities. Before, the more electricity they sold, the more money utilities made. They had a vested interest in encouraging profligacy. Under the state’s new model, utilities were rewarded for weatherizing residences and commercial facilities and for promoting more-efficient heating and cooling equipment. In effect, utilities were allowed to charge ratepayers for not just megawatt hours, but negawatts, or negative watts—the energy savings from efficiency. This model of decoupling their profits from growth in energy consumption transformed the utilities overnight. Overnight, they became indifferent to sales—it was just as profitable for them to weatherize homes as to build new power plants.

Today, California ranks fiftieth among US states in per capita electricity consumption. The US per capita annual residential electricity consumption in 2011 was 4,566 kilowatt hours (kWh); California’s was 2,346. Taking all consumption together (residential and commercial), the US per capita electricity consumption in 2016 was 11,634 kWh, but California’s was only 6,536 kWh. Whether measuring just residential or all end use, the national average is almost twice that of California; a remarkable statistic, even accounting for California’s mild climate—Californians use less air conditioning than residents of most other southern and western states. Most (64% in 2017) homes in California are heated with natural gas, a far more efficient form of home heating than electricity, and Californians also heat their water mostly with natural gas. Fully 14% of homes were not even heated in 2009. The state ranked thirtieth in its average annual per capita residential natural gas use in 2011.