Will CA green-energy policies backfire like Germany’s did?
January 13, 2014 - By Wayne Lusvardi
Will California’s new green energy regime suffer the same fate as Germany’s Energiewende?
In Europe, wholesale prices for solar and wind power have dropped below the cost to produce it. This has resulted in Germany having to rapidly build new polluting coal-fired power plants to offset the unanticipated losses from its shift to green power called Energiewende (German for “Energy Transformation”). Europe’s Energiewende has backfired resulting in its having to return to dependence on coal-fired power plants. Will California suffer the same fate of uneconomic green energy prices and a “deeply regrettable misinvestment” in green power?
This is a question I posed to Schalk Cloete, a chemical engineer and climate scientist who has morphed into an expert on the economics of green power. Cloete is a chemical engineer from Stellenbosch University in South Africa and now a research scientist at the Norwegian University of Science and Technology.
I had an online discussion with Cloete at The Energy Collective website regarding his Jan. 9 article “The Effect of Intermittent Renewables on Electricity Prices in Germany.”
I posted a question for Cloete online about whether California could suffer similar problems as Germany if it reaches its 33 percent goal for green power under its Global Warming Solutions Act of 2006 enacted into law as Assembly Bill 32.
Expert: California’s circumstances may help it avoid some headaches
California does not publicize its energy data in the same detail as Germany. But Cloete still ventured a few qualitative observations:
. The negative impact of solar photovoltaic power should be substantially less severe in California than Germany. Cloete said this is because California solar has a higher capacity factor than Germany. He added, however, “California wind (power) is not very high quality, though.”
· California has cheap natural gas and hydroelectric power that can balance out renewables whereas Germany has to depend on coal power.
· California’s proposed Energy Imbalancing Market will “increase the value of intermittent renewables by lowering their effective penetration” because “additional transmission costs and complexity (will) start to outweigh these benefits.” California’s Energy Imbalancing Market is a strategy to buy cheap out-of-state hydropower from federal dams to replace the government-induced high price for natural gas peaker power as a result of shifting to green power.
· This will, however, socialize peak energy prices and privatize off-peak energy prices by “asking people in areas with low/negligible penetration of intermittent renewables to shoulder a substantial part of this cost burden.”
· The Energy Imbalance Market will create “wealth transfer” from people in areas with low green power market penetration (Texas, Arizona, Utah, Wyoming, Colorado, Montana, North Dakota and New Mexico) to those with relatively higher market penetration (California, Oregon, Washington, Idaho). This may explain why the states of Oregon, Washington, Arizona and New Mexico joined California in the Western Climate Initiative.
· Cloete also thinks California stands a better chance of escaping the European scourge of negative green energy prices if it does not expand green power beyond its present 20 percent penetration to meet its goal of a 33 percent renewable energy standard by 2020.
Renewable energy ‘least practical’ way to limit CO2 emissions
Cloete believes in the conventional wisdom about global warming happening because of a buildup of carbon dioxide and other greenhouse gases in the atmosphere. However, he is among those who question the conventional wisdom about how to stop it. Cloete said green power “is helping to lock in decades of emissions” from fossil-fueled power plants.
His verdict on the solar and wind energy proposals so beloved by California’s environmentalists? “Despite their ideological attractiveness, intermittent renewables remain the most expensive and least practical mechanism for C02 abatement,” he said.
Tags: California Global Warming Solutions Act, California Renewable Energy Standard, privatizing profits and socializing losses, Schalk Cloete, The Effect of Intermittent Renewables on the Electricity Market in Germany, Wayne Lusvardi, wealth transfer