Despite renewables mandate more than 80% of California energy needs met using fossil fuels

Guest essay by Larry Hamlin

California Governor Brown signed Executive Order B-55-18 last year further modifying the states reduced carbon energy targets by mandating a year 2045 goal where the state’s energy use must achieve zero emission capability and be carbon neutral.

This order represents a significant escalation from California’s initial climate program in 2006 where AB 32 was passed with that law requiring the state to achieve year 1990 emission levels by year 2020. AB 32 was implemented through mandating use of increased renewable energy, implementing a state carbon tax and providing numerous subsidies promoting renewable projects.

Since its inception the state’s carbon tax has been budgeted to provide nearly $17 billion in proceeds from California energy users.

During that same time period renewable energy subsidy programs have provided about $11 billion in supporting renewable energy program contributions including investment tax credits for roof top solar PV projects and production tax credits for qualified renewable projects including out of state renewable projects that provide Ca. imported electricity. EIA data shows that California imports more electricity than any other state amounting to about 10% of its total energy consumption in year 2016 with about 20% of that imported energy from renewables.

California’s renewable portfolio standard requires that retail electricity sales be provided 33% through renewable energy resources by year 2020 and 50% through renewable energy resources by year 2050. 

Under Federal Law renewable projects commencing construction before January 1, 2018 receive a Production Tax Credit (PTC) of $0.023 dollars per Kwh for periods up to 10 years These subsidies provide revenues which cover most if not all of the capital investment costs for these projects which allows them to market energy at lower costs while only having to cover operations and maintenance expenses.

Because these renewable projects cannot be dispatched this unreliable energy forces dispatchable fossil plants to be on line running at lower power levels to operate and match generation to the power needed. This type of operation results in increasing the fossil plants unit costs of production which electric grid customers must pay.

Additionally the fossil plants must also be dispatched to operate on line at lower power levels to provide electric grid stability functions including system frequency, voltage, and synchronization control, regulating margin and spinning and standby reserves with none of these functions capable of being provided by renewables. Again electric grid customers must pay the increased unit costs of production incurred by the fossil plants because they are forced to run at lower power levels to provide these grid stability requirements.

Renewable energy projects have been provided with government dictated highly advantageous market conditions which drive up electric grid costs to consumers who must pony up the increased costs incurred to provide electric grid reliability and stability capabilities which cannot be provided by renewables. In addition consumers pay for the huge government dictated subsidies and tax benefits enjoyed by renewable projects. This highly uneven energy market playing field is consistently concealed by the government, media and renewable energy advocates.

Without government providing production tax credits to renewable energy projects many of these projects would simply not be built with business guru Warren Buffet astutely noting:

“I will do anything that is basically covered by the law to reduce Berkshire’s tax rate,”

“For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”

The state government, agency regulators and media have constantly hyped renewable energy programs and projects and claimed that California is leading the world in “fighting climate change” by reducing California’s greenhouse gases. These claims have been shown to be completely erroneous and in fact such claims amount to nothing but climate alarmist propaganda statements. California’s emissions reductions are irrelevant to global emissions growth that is totally controlled by the world’s developing nations. 

California’s politically driven and globally inconsequential emissions reduction claims have almost always been addressed via the state’s electricity use sector but little has been addressed by the state regarding its transportation, industrial, commercial, residential and agricultural energy use sectors that comprise about 84% of the state’s total emissions.

California provides incomplete and limited information regarding the states total energy consumption picture and instead provides energy data that emphasizes the electricity sector which is focused on renewable energy government mandated programs, projects, subsidies and taxes.

The Energy Information Administration (EIA) data for U.S. states total energy consumption from 1960 through year 2016 shows that California after a decade of tens of billions in government subsidies and mandates requiring use of renewables still required fossil fuels to meet the needs of about 82% of its total energy use in year 2016.

The 82% fossil fuel dominate energy use resource by California in 2016 after a decade of state government mandated use of renewable energy, billions in carbon tax fees and more billions in renewable subsidies remains little changed from California’s year 2006 energy use of fossil fuels where 85% of state’s total energy consumption was obtained from fossil fuels.

Additionally the state’s wind and solar resources which have been the primary beneficiaries of its energy policy mandates, subsidies and tax schemes provided about 1% of California’s total energy consumption in 2006 with that figure rising to just 7% (including renewable imports from other states) of its total energy consumption in year 2016 a decade later.

California’s residential electricity rates are already over 40% higher than the average in the U.S., are about 50% higher than the average residential rates in the adjoining states of Arizona and Nevada and are over 70% higher than the residential rates in the adjoining state of Oregon.

The incremental increase in California’s residential electricity rates since 2006 is 60% higher than the incremental increase in U.S residential rates, 4 times higher than Oregon’s incremental increase in residential rates and between 25% to 30% higher than occurred in the states of Arizona and Nevada.

By far the largest energy use sector in California is transportation energy which comprised about 40% of the states total energy use in year 2016 followed by the industrial sector at 24%, commercial sector at 19% and residential sector at 17% according to EIA data.

The state has no idea and is totally clueless on how to transform the transportation energy use sector to zero emissions or for that matter how to transform any other of these energy sectors to zero emissions as mandated by Governor Brown’s politically contrived and ill-considered executive order.

The only hand waving scheme the state officials can offer at this point is to speculate that increased use of EVs and other low emission vehicles must play a bigger role in the transportation sector even though after nine years of state subsidies which cost Californians $620 million dollars only 277,000 vehicles applied for subsidies for EV and other low emissions vehicles. These subsidy purchased vehicles represent less than 1% of California’s 35 million registered vehicles.

Additionally and contrary to the beliefs of many climate alarmist propagandists EVs are not zero emission vehicles and neither is the state’s 98 billion dollar bullet train to nowhere pipe dream.

Germany which is years ahead of California in pushing politically contrived renewable energy and EVs policies demonstrates how expensive, futile and unrealistic such programs are in the real world having committed nearly one trillion euros toward these efforts only to see failure in not reaching its year 2020 hyped emission reduction targets (which were no where near zero emissions) and also realizing that EVs produce more emissions than its diesel vehicles.

Perhaps CARB leader and Governor Brown long time ally Mary Nichol’s threat to ban all California ICE vehicles in the future will have to be imposed with the economic outcome of destroying the states economy but satisfying the state’s environmental extremist climate alarmist dictates. This action will also surely result in huge and harsh lifestyle detriments to the present owners and users of the 35 million registered ICE vehicles.

After solving the transportation sector carbon neutral energy and emissions quagmire the state government can then turn to putting the screws to the industrial, commercial, residential and agricultural energy use sectors and proceed to destroy those sectors as well to achieve its zero emissions and carbon neutrality absurd mandate.

The state has a number of renewable energy use technologies including fuel ethanol, biomass and geothermal that today provide about 5% of California’s total energy consumption but which are not zero emission. All these technologies will have to be replaced to meet Governor Browns zero emissions Executive Order nonsense.

At present the state’s zero emission long term energy resources includes large and small hydro, wind and solar. These energy resources provided only about 10% of the states total energy in 2016. Thus somehow the states reckless politicians must come up with new zero emission energy resources for what now represents 90% of the state’s total energy consumption.

Nuclear is excluded from the above zero emissions total since the state foolishly required that by year 2025 the Diablo Canyon Nuclear Plant shutdown. This shutdown of large scale reliable base load zero emissions nuclear power is just another example of the state’s irresponsible actions that demonstrate California’s governmental incompetence.

Hydro has variable energy capability based on rainfall and little if any additional large hydro can be built in the future in California because of environmental extremists objections to large dam reservoir projects in the state.

Environmentalists are still pushing for the removal of certain large hydro dam projects in California.

California’s incompetence in managing its forest management obligations and wildfire prevention responsibilities has led to increased wildfires and resulting emissions which are not carbon neutral and represent yet another huge problem for the state to finally address including acknowledging full accountability. This is yet another example of the state’s governmental incompetence.    

California’s government has no idea how to achieve the numerous emission reduction targets and goals established by its energy and emissions ignorant, incompetent and clueless politicians along with their supporting media which unwittingly praise these purely climate alarmist propaganda driven proposals. Apparently all that is required to legislate such preposterous schemes in California is just make believe magical thinking.

Worse yet is the fact that achieving such massively costly, bureaucratically intrusive and economically damaging schemes has a completely irrelevant impact on global emissions and climate outcomes. These catastrophically inane proposals clearly demonstrate that California’s government leaders are living in a bizarre Alice in Wonderland world devoid of any relevant connection to reality.

In year 2000 through 2001 the state of California experienced a politically driven and self-inflicted energy crisis which I was directly involved with during the “clean up this mess phase”. This crisis was driven by the state government’s political leaders in Sacramento and San Francisco who had the absolutely half-baked idea that they could deregulate California’s electricity energy market and save tons of money. The results are summarized below.

“With the passage of AB 1890 in 1996, California led the nation in efforts to deregulate the electricity sector. The act was hailed as a historic reform that would reward consumers with lower prices, reinvigorate California’s then-flagging economy, and provide a model for other states. Six years later, the reforms lay in ruins, overwhelmed by electricity shortages and skyrocketing prices for wholesale power. The utilities were pushed to the brink of insolvency and are only slowly regaining their financial footing. The state became the buyer of last resort, draining the general fund and committing itself to spending $42 billion more on long-term power deals that stretch over the next ten years. The main institutions of the competitive market established by AB 1890, the Power Exchange and retail choice in particular, have been dismantled.”

In addition massive state electrical energy blackouts occurred on a regular basis.

The state government politicians who masterminded this debacle never apologized to the 35 million citizens of California for their incompetence but settled for pointing fingers at everybody but themselves for delivering this catastrophic outcome.