Navigant Research Blog

California Sets an Ambitious Energy Agenda

Peter Asmus — January 9, 2015

Living in California, it’s easy to forget that the rest of the world doesn’t always see things in the same way.  Given the ambitious energy and climate change goals outlined in Governor Brown’s inaugural address on January 5, this divergence may only grow.

What exactly did the governor propose?  Here’s a snapshot summary of targets he set for the state by 2030:

  • Increase from one-third to one-half the portion of the state’s electricity derived from renewable sources
  • Reduce today’s petroleum use in cars and trucks by up to 50%
  • Double the efficiency of energy use in existing buildings while also making building heating fuels cleaner

The Center of Innovation

For investors in and developers of clean energy technology, Brown’s targets mean that California will continue to lead the United States in terms of R&D and commercialization of renewable energy, electric vehicles, and smart building automation products.

Perhaps the biggest surprise for skeptics of Left Coast policy aspirations is that data suggests California is likely to meet its AB 32 goal of reducing emissions of greenhouse gases to 431 million tons by 2020.  While the rest of the world continues to heat up and multilateral emissions reductions efforts by the United Nations in Lima, Peru late last year once again faltered, the only U.S. state to pass climate legislation with concrete objectives appears to be on its way to actually reaching those targets, despite a long list of hiccups and controversies.

Changing the Game

Will California meet Brown’s new goals?  That’s impossible to predict, but the real questions now lie in the details.  I, for one, was delighted to see the governor mention microgrids, since apparently he agrees that distributed renewables (such as rooftop solar PV) will be game changers.  The best way to transform such distributed energy resources from problems for the grid into solutions for climate change – including resilient communities that can keep the lights on during extreme weather events – is through the islanding capabilities of microgrids.

When I first started covering wind power in the ‘80s for the national trade press, I often dealt with skeptical East Coast editors.  “Do those wind turbines really work?” they would ask.  “Isn’t that just one of those California things?”  This was, of course, during Brown’s original tenure as governor, when he was dubbed Governor Moonbeam by the national press.  From a handful of wind farms jump-started by flawed but effective tax credits, a global industry was spawned that now generates an accumulated 321,559 MW of electrical capacity, or just under 3% of the world’s total electricity, according to Navigant Research’s most recent World Market Update report on the wind industry.  That’s up from less than 1% of California’s total electricity in 1985, 30 years ago.

Sometimes, the only way to leap forward is to go out on a limb on the policy front, and then see if entrepreneurs and capital markets are up to the task.  Only time will tell which is the wiser course – the prudent go-slow pace of national politics or the risk-taking adventure being drawn up in Sacramento.  I know where I’m placing my bets.

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