California’s Growing Imported Electricity Problem

By: Jude Clemente |

California’s SB 350 requires the state to procure 50% of electricity from renewable energy and double energy efficiency savings by 2030. And the U.S. Environmental Protection Agency’s “Clean Power Plan” wants states to “to act more like California.”

Yet, beyond power rates 45% above the U.S. average, California has another problem that makes it less of a model than some proclaim. California now imports 33% of its electricity supply from fast growing neighbors, with about 65% of that coming from the Southwest and 35% coming from the Northwest. These numbers increase most in summer months when air conditioning loads peak. Imports have been rising rapidly: in 2010, California “only” imported 25% of its power.

Per the U.S. Energy Information Administration, California imports because “its wholesale power markets in the region are relatively open and generation from outside the state is often less expensive.” In fact, California imports about 6% of its electricity from out-of-state coal-fired power plants, with another 14% coming from ”unspecified imports,” of a cloudy origin that is generally attributed to hydropower, gas, nuclear, and other renewables.

Besides having the most expensive electricity west of the Mississippi River in the continental U.S., California already has the least reliable electricity. California easily leads the nation with nearly 470 power outages a year, compared to 160 for second place Texas, which is really amazing because Texas produces 125% MORE electricity! (here). California’s reliability problems will be multiplied as more wind and solar enter the power mix, intermittent resources located in remote areas that cannot be so easily transported to cities via the grid.

In future, California confronts a number of baseload power issues that could surge imports even more. Strangely, hydroelectric facilities greater than 30 megawatts don’t qualify as renewable under the state’s Renewable Portfolio Standard requirement. Both large and small hydro generation in California have plummeted over 60% in recent years (here).

And as seen with the 2015 drought, where low water levels had hydro dams producing 80% less power than normal, future generation and imports of hydropower will be restricted by climate change worsening drought. This is very bad news for California’s already precarious power market: hydropower plays a “very important role in maintaining system reliability, because of the flexibility it provides system operators.”

It’s crucial to remember that drought and less hydropower available in the Northwest was a determining factor in California’s “2000-2001 Power Crisis” that cost the state $50 billion in added energy costs, illustrating the problems of California’s over-reliance on outside energy (California also unsustainably imports over 90% of its natural gas, the nation’s fastest growing major fuel, and the source that other states will increasingly lean upon most to meet the Clean Power Plan).

At the time, neighboring governors rightly complained about California’s unwillingness to build new generation capacity in the 1990s even though its demand was rising (proof here).

Further, EPA’s new plan could force many of those coal plants that California imports from to shut down, leaving the state even more vulnerable to brownouts and blackouts (concerns continue to be raised nationally about policies that are lowering the reliability of our power grid: Eaton reports that blackouts already cost the U.S. about $150 billion a year).

And the 2013 permanent closing of the 2,200 megawatt San Onofre Nuclear Generation Station between San Diego and LA will continue to increase the reliance on natural gas, a fuel that now accounts for over 60% of California’s power generation, notably despite a slew of grants, subsidies, tax credits, and cash incentives for renewables. EIA reports that in California “increases in generation at natural gas-fired power plants in the state offset the reduced nuclear and hydro generation.”

Gas is more reliable, more affordable, more flexible, and highly abundant, a peak demand or baseload fuel that generates electricity around-the-clock. Gas continues to gain market share in California even with the focus on renewables because it’s average availability hovers around 90%, versus just 30% even on good days for wind and solar.

Even being designated “preferred resources” doesn’t change the physical and technical reality that most of the low-hanging energy efficiency fruit has already been plucked, so incremental gains are becoming increasingly difficult. And wind and solar will continue to be unavailable most of the time, remaining classified as “non-dispatchable” energy systems (see EIA forecasts here).

These are enormous challenges that the pro-renewables, anti-natural gas movement simply cannot continue to ignore.

This dominance of natural gas in California is “bordering on the absurd.” Just look at California’s troubled Ivanpah solar thermal plant near Nevada, being “paid four to five times as much per megawatt-hour as natural-gas powered plants.”  But, very quietly, Ivanpah has become a big natural gas plant.

That’s because Ivanpah uses gas to preheat water that goes into boilers mounted on three 459-foot-tall towers, allowing “heat from the sun – captured by 352,000 mirrors – to make steam more quickly. The steam turns the turbines that produce electricity.”

In 2014, enough natural gas was used at Ivanpah to meet the annual power needs of 17,000 California homes, or over 25% of the plant’s total projected electricity output. Thus, Ivanpah is a hybrid gas and solar power plant, but obviously wasn’t touted as such by President Obama.

Although owned by Google, NRG Energy, and Brightsource, who have a market cap over $500 billion, ”The U.S. Department of Energy granted Ivanpah $1.6 billion in loan guarantees. As a green-energy project, it also qualified for more than $600 million in federal tax credits.” Production is often 30-35% below expectations, a lack of generation that has increased the calls for Ivanpah to shutdown.

But, let’s be honest, none of this should be a surprise.

Although the California Council on Science and Technology is convinced that “Energy policies in the state of California are very advanced compared to the rest of the nation,” the reality is quite different:

The San Diego Union-Tribune reports that, “Federal data indicates Californians paid $171 billion in higher costs for power over the last 20 years, compared to the national average,” again the insidious and destructive movement to lower energy demand and GHG emissions by pursuing policies that increase prices.

California’s Growing Imported Electricity Problem