Along with many other states, California, Arizona and Nevada all
have “renewable portfolio laws.” California requires that 60% of its electric
power be from renewable sources by 2030. Nevada requires 50% by 2030. Arizona
requires 15% by 2025. Renewable power is defined by law in each state, but
usually it amounts to wind or solar.
One might think that having a quota for renewable power means that
the power has to be generated by wind or solar and consumed within the state.
There is a loophole. The “renewable attribute” can be legally separated from
the actual power. So, the power can be consumed in one place, but a different
place gets credit as if it had actually consumed the renewable power. For
example, a wind farm in Colorado can generate a megawatt hour of electricity.
The power is actually sold and consumed in Colorado, but California gets credit
for a megawatt hour of renewable power.
The Colorado wind farm in the normal course of events can sell the
abstract credit, known as an RPC or Renewable Power Certificate to California.
California needs credits to meet it renewable power quota, so it is willing to
pay, for what is a piece of paper. The wind farm can also sell the real
electric power separately to someone who is willing to buy electricity that
comes without the renewable power attribute, because the renewable power attribute
has been sold to California. This is a legal way to convert power from fossil
fuels into renewable power, or to meet a renewable power quota without actual
renewable power.
Sometimes the certificate may be more valuable than the power. In
fact, sometimes the power may literally be worth less than nothing. At certain
times California has too much solar power that it can’t use because it would
destabilize the grid. When the power is worth less than nothing, the producer
will have to pay someone to use the power. Someone has to use the power or
there can’t be a certificate. That would be a counterfeit certificate. You
can’t just throw the power away. That would negate the whole rationale. You
might think that any state would be happy to accept free power, but it may be
inconvenient for technical or economic reasons, or it may just be that only one
party is available that can take the power and they can exercise monopoly power
and make the party trying to get rid of the power pay for the privilege.
A similar situation exists in the spring with wind power in the
Pacific Northwest. Wind power receives a 2.4 cents per kilowatt hour subsidy
from the federal government. But in the spring, there is a surplus of
hydroelectric power due to plentiful rainfall. The wind power suppliers pay
power consumers to take their power so they can get the federal subsidy. The
hydroelectric suppliers have no motive to do the same because they don’t get a
subsidy. So, the hydroelectric suppliers spill the excess water and some
electricity users get paid rather than billed for their power. This is known as
a market distortion caused by the government.
Often with solar power there is too much during the middle of the
day and not enough later in the day. In the evening there isn’t any solar
power. In California the major problem with excess solar power is in the
spring, when the sunshine is kicking in, but the big consumption for air
conditioning hasn’t yet kicked in. California could simply tell the solar power
generating stations to cut back, but then they would lose credit toward their
renewable power quota. Some contracts may even make them pay for the power that
they would have received without the cutback. So, they try to get utilities in
adjacent states to take the power, keeping the certificates for themselves.
This was all revealed in a Los Angeles
Times article. Apparently, California is paying as much as $15 a megawatt
hour to unload the unusable solar power.
To see why this makes sense for California it is necessary to look
at the economics of solar power. To generate solar power if there weren’t
various subsidies would cost about $80 per megawatt hour. With the federal and
state subsidies the cost might be reduced to $25 per megawatt hour. In
contrast, the marginal cost of generating power with natural gas is $15 to $20
a megawatt hour. But the $25 renewable power runs out when the California grid
can’t accept any more solar in the middle of the day. If they pay Nevada $15 to
accept the excess solar, they now have a route to get renewable credits for $40
per megawatt hour, $25 for the solar power and $15 to get Nevada to accept the
unusable power. Essentially by a legal strategy they are converting natural gas
electricity, delivered in the evening, into renewable electricity. Nevada, on
the other hand is getting electricity that is not legally renewable, even
though it really does come from solar. Nevada may not want more non-renewable
electricity unless they are paid for it, because Nevada has a quota for
renewable power too.
The situation is more than a little strange. Propaganda from the
sellers of wind and solar power makes people think that wind and solar are
actually useful. Huge subsidies make wind and solar seem cheaper than they
really are. The idea that introducing wind and solar in U.S. states will make a
significant difference in world CO2 emissions is wrong. The real emissions
problem, if it is a problem, is in Asia. People that really believe in global
warming should face up to the fact that nuclear
is the only route to stopping the increase of CO2 in the atmosphere.
Some of the most important advocates of global
warming catastrophe make that clear.
The most salient fact conc erning wind and solar is that they are
intermittent and erratic sourcesof power. They always have to be backed up with
fossil fuel plants that take over when the sun sets or the wind stops. They
never replace fossil fuel plants.
A pathetic attempt to correct the inherent problems of wind and
solar is to add batteries to store power. That costs a fortune, a very high
price to pay to help in meeting renewable power quotas..
The utilities know the facts.
But the utilities have no incentive to stop the waste because they have figured
out how to make money by promoting dubious renewable power. Apparently, the
politicians on state public utility commissions and in state legislatures don’t
have the knowledge or the courage to represent the interests of the people,
rather than the interests of the manufacturers of wind and solar stations and
the interests of the environmental organizations that are profiting from an
artificial fear of traditional energy. People send money to environmental
organizations because they have been convinced that catastrophes are looming.
Norman Rogers is the author of the book: Dumb
Energy: A Critique of Wind and Solar Energy (Amazon). His
website RenewableFairyTales.com goes into more detail concerning
renewable energy.