One of the senior members of the California Energy Commission, which is overseeing the state’s ambitious 50 per cent renewable energy target, says Australia has nothing to fear from a grid with high renewable energy penetration.
“We are at the beginning of the end of the coal era,” said David Hochschild, one of 5 CEC commissioners. And, he adds, high levels of renewables will not “crash the economy”, nor will they cause blackouts. In fact, in California, they had found the reverse.
“There has been a lot of mythology propagated about what would happen if we (California) went down the path of a bold renewable energy policy,” Hochschild said.
“One of those were blackouts caused by renewable energy. But the last blackouts we had were in 2001, and that was because of market manipulation caused when Enron tried to make a billion dollar profit from trading.
“They said the economy would crash and there would be a loss of jobs. But unemployment in California has been cut in half, the economy is growing faster than ever, the state was attracting more clean energy investment than the whole of Europe, and it now had major export industries in solar and electric vehicles.”
Hochschild says Australia has some important lessons to learn from California, particularly on renewable energy and its attachment to fossil fuels.
“Coal is not our future, it is our past. This is a question for Australia – do you want the economy to be about tomorrow, or to be about yesterday?”
That is an interesting question. Australia, despite signing on to the Paris climate agreement, has set itself on a path to increase emissions rather than cut them; it has reduced the renewable energy target, and the fossil fuel industry and its supporters are looking to blame wind and solar for rising energy costs and supply interruptions.
Indeed, South Australia is leading the way to a majority renewable-energy based electricity grid, likely to reach 50 per cent from wind and solar alone by the end of the year. As Ketan Joshi writes, that has resulted in a lot more myths being written in the media.
“Once you get to 50 per cent renewable energy, that flips the script,” Hochschild says. “That’s when fossil fuels become the ‘alternative energy’ and renewables become the mainstream.”
Indeed, Hochschild said that the market value of the four biggest coal companies in the US had declined by 99 per cent in just the last five years. He also pointed out that energy subsidies had favoured fossil fuels and nuclear, and federal subsidies to renewable energy were a mere fraction of those to coal, oil and gas.
Hochschild said energy efficiency had proven to be a valuable tool in the push for more renewable energy. California now uses half the energy per capita compared to the rest of the country.
The incumbent industry had warned of disaster when the first appliance efficiency standards were introduced, for the household refrigerator. But since then, the size of the average fridge had increased dramatically, efficiency had improved greatly, and consumers had saved $1 billion in energy costs. Efficiency standards for TV had saved another $300 million.
“That is smart policy that produced great results,” he said.
Now, 27 per cent of new homes in southern California are built with rooftop solar as standard, and in cities such as Lancaster, rooftop solar is compulsory for all new dwellings. There were now more jobs in the solar industry than in the utilities industry, and loan defaults in homes with solar were one-third lower than those without, thanks to lower electricity bills.
“We were told there is going to be rolling blackouts. That didn’t happen. There is nothing about the challenge of integrating high volumes of renewables that is outside the realm of solvable problems.
“We know that energy demand is volatile and we can manage that. We can mange volatile generation.
“This (the setting of high penetration renewable energy targets) has been best decision we made for California.”
Giles Parkinson is a journalist of 30 years experience, a former Business Editor and Deputy Editor of the Financial Review, a columnist for The Bulletin magazine and The Australian, and the former editor of Climate Spectator.