Joining a would-be trend that includes lawmakers in deep blue Massachusetts, Senate majority leader Kevin de León, D-Los Angeles, has unveiled a new proposal that could become California Democrats’ answer to the limits of cap-and-trade. 

“The California Senate leader has introduced legislation that would require the Golden State to get 100 percent of its electricity from climate-friendly energy sources by 2045,” the Desert Sun reported. “That’s a big step up from the state’s current renewable energy mandate, 50 percent by 2030 — a target that’s only been on the books for a year and a half, and that California is still a long way from meeting.”

“De León’s bill would require California to hit 50 percent renewable energy by 2025, five years sooner than under current law, and phase out fossil fuels entirely by 2045. It’s not yet clear whether the Senate leader will move forward the proposal, which he introduced before the state’s bill-filing deadline on Friday, almost certainly to serve as a placeholder for more detailed legislation that could be fleshed out later. Still, clean energy advocates celebrated the proposal.”

Big goals

Massachusetts lawmakers recently made a bid to make their state the first in the country to draw all its power from renewables. “Lawmakers recently introduced a bill that would require an economy-wide transition to obtaining power via clean sources like wind and solar, and 53 state legislators from both the House and the Senate have shown support for the measure,” Inhabitat observed. “The bill, SD. 1932, also known as the 100 Percent Renewable Energy Act, would set targets of electricity generation via 100 percent renewables by 2035; other sectors like transportation and heating would have until 2050 to make the switch.” 

A few other states have begun to gravitate toward the principle of mostly or totally renewable power. New York “wants 50 percent renewable energy by 2030,” according to the Los Angeles Times, “which is seeking 100 percent renewable energy by 2045.” De León first floated the idea of going full renewable to the Times in January. “Two years ago, California Senate leader Kevin de León pushed through a law requiring the state to generate half of its electricity from renewable sources by 2030,” the paper recalled.

Notes of caution

But while the enthusiasm has largely been couched in terms of using politics to advance moral imperatives, not all green energy advocates have embraced the idea with open arms. “[T]here’s a lot of evidence that 100 percent renewable energy is not the optimal way to decarbonize the grid,” Greentech Media noted. “Let’s say climate change requires massive government investment in clean technologies. In that case, the question shifts to one of efficacy: Since climate change justifies extraordinary measures, what is the most effective extraordinary measure to fight it? That’s where 100 percent renewables plans fall short, for both structural and practical reasons.”

Some analysts have warned that the approach pushed by de León becomes less and less effective the more ambitious it becomes. “The main economic problem facing renewable electric power is that of diminishing returns,” wrote the Niskansen Center’s Edwin Dolan. “It is possible to install great numbers of solar panels and wind turbines, and even to achieve economies of scale, measured in terms of the cost per kilowatt-hour of capacity, as the installations get larger. However, the problem remains of getting the power to users where and when it is needed. The output of solar and wind installations is variable, and the timing of output does not always coincide with the timing of demand. As the number of renewable installations attached to the grid goes up, the percentage of the potential power output that can actually be used goes down and the cost per kWh rises.”

The result could lead businesses to push technology toward arbitrary goals. “Energy companies have traditionally shied away from installing battery systems at their plants because they’ve tended to be expensive,” Ars Technica noted. “But as prices for energy storage come down and states like California require more and more intermittent renewable energy on utilities’ grids, battery installations have been on an upswing.”

Aiming high

The Los Angeles Times reported that “Musk introduced a new line of residential and commercial batteries [recently] in a dramatic announcement at the automaker’s design studio in Hawthorne. He outlined a vision of off-the-grid homes and businesses and remote villages powered by sunshine.”

According to Musk, the Times recounted, the new initiative reflected an ambition “to change the fundamental energy infrastructure of the world. What we will see is something similar to cellphones and land lines where cellphones actually leapfrogged land lines.”

Target and Walmart stores have already begun testing the devices, which could dramatically change the way they power their enormous, warehouse-like commercial spaces.

Regional rivals

The move rippled swiftly through Silicon Valley, where Tesla has become the most prominent, but hardly the only, battery purveyor in town. In a demonstration of PayPal founder Peter Thiel’s theory that innovators should seek monopolies, not marginal improvements, competition has ratcheted up in the power-storage space, as Business Spectator noted, because the market has not yet matured:

“‘So many companies are fighting over a market that’s practically nonexistent right now,’ said Haresh Kamath, energy storage expert at the Electric Power Research Center in Palo Alto, California. ‘Tesla is betting they can produce a charismatic product that consumers will want to buy — like what Apple did with the iPhone.’ Tesla will have to sell eight home battery systems to equal the size of each battery pack going into one of its luxury cars, he said.”

West coast dominance

In a potent sign of the business importance of location and tech infrastructure, California quickly emerged as the introductory market for top-tier firms taking advantage of the new batteries. As VentureBeat reported, “Amazon Web Services, the largest public cloud around, has started a pilot of the new stackable battery units Tesla unveiled[.]”

“‘We’re excited to roll out a 4.8 megawatt hour pilot of Tesla’s energy storage batteries in our U.S. West (Northern California) Region,’ James Hamilton, distinguished engineer at AWS, said in a statement in press materials for today’s product launch. ‘This complements our strategy to use renewable energy to power our global infrastructure.'”

Solidifying California’s significance in the battery market, solar power firm SolarCity — co-founded by Musk’s cousin, Peter Rive — also announced plans to use Tesla batteries to share revenues with customers whose homes are connected to the power grid.

“SolarCity’s financed battery-solar residential system offerings will include a standard customer contract that ‘essentially splits revenues that grid services provide,’ he said,” according to GreenTechGrid.

And though both firms have benefited from millions in subsidies granted by the Self-Generation Incentive Program established by the Golden State, GreenTechGrid noted, Rive insisted that, “for this product, we are not counting on any SGIP incentives whatsoever.”

Nevertheless, state regulators’ impact on energy markets appeared set to influence the tech business in other ways. In yet another extension of Tesla’s power on the west coast, the company’s former senior finance director, Ryan Popple, recently secured “a $3 million grant from the California Energy Commission to help set up a manufacturing plant in Los Angeles County” for Proterra, the electric bus company where he has become CEO, as Government Technology reported.

“Popple says rechargeable buses have benefits that diesel can’t match, especially in California. By 2030, Gov. Jerry Brown wants to cut in half the state’s use of oil for transportation. And California’s urban areas, particularly the Los Angeles region’s massive sprawl, constantly struggle with air pollution. Electrifying public transportation within cities would be a substantial step forward, Popple said.”

At its Sept. 4 meeting, the Sacramento Municipal Utility District deferred deploying batteries along its electric grid in compliance with Assembly Bill 2514 of 2010. The reason: energy storage was not economically feasible. (See p. 93 and p. 143 of the Board Agenda)

The action was a reversal for Gov. Jerry Brown. While attorney general, he co-wrote AB2514 with Assemblywoman Nancy Skinner, D-Berkeley. The bill was signed into law by Gov. Arnold Schwarzenegger.

Under AB2514, public utilities must establish “procurement targets” for energy storage projects by Oct. 1, 2014.  The bill included targets for energy storage from batteries, hydroelectric storage, thermal storage, flywheel technology and compressed air energy storage.

But such targets were only required after considering “viability, cost-effectiveness, and a variety of possible policies to encourage the cost-effective deployment of energy storage systems,” in the board’s summary of the AB2514 requirements.

Battery storage helps make more viable such renewable energy sources as solar, storing power for use when there’s no sunlight; and wind, storing power for when there’s no wind.

SMUD staff recommended that its Board of Directors “defer establishing energy storage targets until more viable and cost-effective energy storage systems become available.”

It wasn’t a casual decision by SMUD to defer any rollout of battery storage.  AB2514 requires re-evaluations of the feasibility of battery storage every three years in perpetuity at a cost of $1 million per year for each public utility.  SMUD had invested over $30 million since 2008 in research to deploy batteries along its transmission lines to facilitate green power.

Batteries 

The AB2514 SMUD Storage Procurement Report of Aug. 28, 2014, included a technical and scientific overview of each energy-storage technology.  Battery storage technology is reported to cost up to $950 per kilowatt hour for the same electricity for which California residential electric customers currently pay about $0.10 to $0.20 (10 to 20 cents) per kilowatt hour (see p. 118 of the SMUD Report).

Left unsaid was that cost-effective utility-scale battery storage may not come about for another 50 years — or ever.  A recent analysis by John Morgan, adjunct professor in the School of Electrical Engineering at RMIT University in Australia, showed that battery storage makes wind energy and solar power even less economically feasible than they already are.

In late July 2014, researchers at Stanford University, including former Obama Secretary of Energy Steven Chu, announced a “holy grail” battery breakthrough. But John Goodenough, part of the team that invented the original lithium-ion battery in the 1970s, was skeptical. He said, “It is not clear he has achieved that goal with a sufficiently cheap process.”

Consumers are used to fast reductions in the cost of computing because of Moore’s Law, under which processing power doubles every 12 to 18 months. But that just hasn’t happened with batteries, where progress comparatively has been at a turtle’s pace.

AB2514 supported by unions and green energy interests

Back in 2010, Brown and Skinner were joined in their support of AB2514 by the California Labor Federation, Los Angeles Mayor Villaragosa, the California Public Utilities Commission and 54 special-interest group organizations involved in energy storage.

The only cited opposition was by the California Manufacturers and Technology Corporation. But the Senate analysis warned of problems that would persist:

“The most common form of energy storage device in use today is batteries. However, there are no commercially available batteries that could cost-effectively store the large amounts of electricity that can be produced by large-scale wind farms or solar facilities.”

In the coming weeks, CalWatchdog.com will be checking out some of the other energy producers in the state to see how they are dealing with AB2514.

One preliminary report: Despite SMUD’s problems, the Los Angeles Department of Water and Power has established energy storage targets of 21 megawatts by 2016 and 154 megawatts by 2021, but has not yet evaluated the potential cost.