I Want My TLC: Attaining Stability in the California Renewables Market

I Want My TLC: Attaining Stability in the California Renewables Market

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Wed, 03/01/2017 - 4:05pm

Reposted from an earlier article.

Deutsche Bank Climate Change Advisors published a study  that concluded that successful renewable energy markets offered  investors “TLC”—transparency, longevity, and certainty. The research  found that US energy policy lacked a stable and reliable set of rules.

A glaring example is Congress’ failure to extend the Production Tax  Credits for wind projects, which expire this year. Given the lead time  for such projects, the industry has been brought to a virtual standstill  because of Congress’ inaction.

Nevertheless, the US remains a significant force in the clean  energy arena, led by state action. The standout is California, with the  most ambitious goals in the country.

The California Renewable Energy Resources Act (CRERA), which  took effect last year, obligates all California utilities to obtain at least  33 percent of their energy from renewable resources by the year  2020.  Additionally, Governor Brown has called for the development  of 12,000 megawatts of local renewable energy.

The foregoing would seem to evidence solid TLC in California. In  fact, the market is undergoing considerable turmoil; we have not  yet attained TLC, but we’re getting there.

First, CRERA itself is responsible for some confusion because of its  formulas for determining eligible renewable resources. Utilities, under  pressure to meet the milestones, have sought resources that would  satisfy the safest eligibility category (generally, energy produced  within California or having its first point of interconnection to a  California balancing authority).  This unlikely coupling of speed and  conservatism has spawned some speculation in the market, fueling  land price inflation and clogging interconnection and RFP queues.

Meanwhile, utilities demand ever-lower prices even as some local  governments are levying fees on projects. One such effort in Riverside  County has drawn a legal challenge. This means that stakeholders  (including other agencies with similar programs) must now wait until  the courts rule—losing precious time.

California’s leadership has clearly paid dividends; clean tech  investment in California exceeded $2 billion in 2009, 60 percent  of the total in North America. We must understand, however, that  leadership involves risk. The challenge is to manage this transition on  the way to TLC with the minimum amount of upheaval and insecurity.

--H. David Nahai

 

H. David Nahai is president of David Nahai Consulting Services LLC  and a partner at the law firm of Lewis Brisbois Bisgaard & Smith. Mr.  Nahai formerly served as CEO and commission president of the Los  Angeles Department of Water and Power, and later as senior advisor to the Clinton Climate Initiative. He is a member of the Luskin Center  advisory board.  

 

 

Author : 
David Nahai, Luskin Center Advisory Board Member

Reposted from an earlier article.

Deutsche Bank Climate Change Advisors published a study  that concluded that successful renewable energy markets offered  investors “TLC”—transparency, longevity, and certainty. The research  found that US energy policy lacked a stable and reliable set of rules.

A glaring example is Congress’ failure to extend the Production Tax  Credits for wind projects, which expire this year. Given the lead time  for such projects, the industry has been brought to a virtual standstill  because of Congress’ inaction.