Report: Not All Renewable Energy Investments Are Created Equal

Posted by NAW Staff on July 20, 2012 No Comments
Categories : New & Noteworthy

California's publicly owned utilities have significantly expanded their use of renewable energy over the past decade, yet several still have a long way to go to meet the state's renewable portfolio standard (RPS) of 33% by 2020, according to a new report by the Union of Concerned Scientists (UCS).

The report found that California's 10 largest publicly owned utilities (POUs) collectively increased their renewable energy investments to nearly 19% of retail electricity sales in 2010 from 4% in 2003. However, the degree to which these investments promoted new clean energy resources varied significantly among the utilities.

POUs deliver about one-quarter of California's electricity needs and, unlike the larger investor-owned utilities, were encouraged – but not required – to meet the 2010 RPS target. Under revised legislation, the POUs are now required to purchase renewables under the state's RPS.

The UCS report classifies each POU into one of three categories based on how well the utility's RPS investments supported the development of new clean energy resources and positioned it to meet future RPS requirements.

Silicon Valley Power, Turlock Irrigation District and Modesto Irrigation District were categorized as ‘sprinting ahead;’ Los Angeles Department of Water and Power (LADWP), Sacramento Municipal Utility District (SMUD), Riverside Public Utilities and Anaheim Public Utilities were described as ‘on the right track, but must keep moving;’ Roseville Electric, Burbank Water and Power and Imperial Irrigation District were criticized as ‘false starts.’

While nearly all of the POUs expanded their renewable portfolios, some had more impact than others on boosting California's clean energy supplies. A few POUs approached or met the 20% RPS goal by signing long-term contracts for new projects or by building their own; others – including the Imperial Irrigation District and Roseville Electric – did not pursue new RPS investments as aggressively, or did so largely by signing short-term contracts that expanded their RPS portfolios only temporarily, which did little to promote the development of new generation facilities, according to the report.

LADWP, the largest POU in the country, made several investments in new wind projects, but also relied on short-term contracts for nearly one-third of its RPS program. In addition, less than half of the overall renewable electricity generated by the 10 largest POUs came from projects located in California.

‘We found that not all investments in renewable energy are created equal,’ says Laura Wisland, a senior energy analyst at UCS and an author of the report. ‘Utilities that sign long-term contracts for new projects or own them outright are most effective at spurring development of new sources of clean energy.’

The report recommends that POUs focus their RPS investments on signing contracts lasting at least 10 years or building their own clean energy facilities, which will help stabilize electricity prices for customers and ensure compliance with future RPS requirements. POUs also should acquire more than the minimum amount of electricity required to meet RPS requirements to create a cushion in case some projects are delayed or fall through, the report states.

By 2010, the POUs still relied on electricity from fossil fuels for two-thirds of their retail sales and supplied about half of the coal-fired electricity consumed in the state.

‘The success of California's renewable energy policies by 2020 and beyond will depend on how individual utilities choose to invest in renewables to meet the state's RPS goals,’ says Wisland.

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