California Proposition 7: Renewable Energy to Account for Half of California's Utilities by 2025

There is nothing wrong with encouraging clean, renewable, domestically produced energy. But California’s proposition 7 “would, if approved, require California utilities to procure half of their power from renewable resources by 2025″ (ref. Ballotpedia). Currently California’s public utilities are mandated to generate 25% of their electricity by 2025, and this is an ambitious goal. Just getting to 25% renewable electricity by 2025 would require more than doubling renewable power generation in California. Getting to 50% by that time would require renewable power generation in California to nearly quintuple.

To understand why accomplishing such an ambitious goal is not necessarily practical, you don’t have to be an economist or a renewable power expert. You simply need to take a look at the current cost for renewable power technology. While you’re at it, write off hydropower, which constitutes most of the renewable energy in California. The chances any significant new hydropower generation ever gets built in California are slim and none – despite whatever sentiments you may hold for or against hydro. This leaves geothermal, solar and wind.


While geothermal holds exceptional long term potential, ala enhanced geothermal drilling, today there isn’t a single operating example of a power station employing enhanced geothermal technology. And most of California’s conventional geothermal power resources have already been developed. So now you are down to wind and solar energy. And since Californians by 2025 are going to be consuming about 1,000 gigawatt-hours per day, if proposition 7 is enacted, 500 gWh per day will have to come from wind and solar power.

Solar power, installed – not including transmission or storage infrastructure – costs about $7.0 million per megawatt of output; this equates to $7.0 billion per gigawatt. If this sounds expensive, it is, but to get a truly accurate price you have to also take into account yield. Even in sunny California, solar energy (in terms of full-sun-equivalent hours), can only be harvested on average for 4.5 hours per day, which means to get 500 gWh of solar generated electricity each day in California, you would need to install 111 gigawatts of solar arrays (500/4.5), which would cost $777 billion dollars.

Wind power, installed – is a better deal currently than solar – insofar as you can probably get costs down to around $2.5 million per megawatt of output, or $2.5 billion per gigawatt. But the yield figures are also not promising. In California there is widespread disagreement on the yield for wind power – credible estimates range from 10% (2.4 hours per day) to 25% (6.0 hours per day). Given the magnitude of what is being proposed, it would be prudent to project wind yields in California somewhere in the middle of this range, say 17.5%, or 4.2 hours per day. This means to get 500 gWh of wind generated electricity in California you would need to install 119 gigawatts of solar arrays (55/4.2), which would cost $297 billion dollars.

It is tempting, and not entirely implausible, to expect prices for solar power to drop significantly over the next several years. But given the cost of balance of plant and installation labor, it is unlikely solar electricity is going to get measurably cheaper than wind power no matter how inexpensive the actual collector materials become. Moreover, the costs for new transmission lines and grid upgrades, the costs for massive energy storage units (since the sun and wind are only producing power during small portions of the day), and the costs for land aquisition, permitting and fighting environmentalist lawsuits will be substantial. For these reasons, estimating the total cost for California to deliver 50% renewable electricity at $300 billion is probably the very best case, if not fantastically optimistic. This is $20 billion per year for the next 15 years. Readers are encouraged to critique these projections.

California has already mandated utilities to accomplish a 25% RPS (renewable portfolio standard) by 2025. It would make sense to see how this already ambitious process unfolds, giving solar and wind technology – along with future technologies such as enhanced geothermal – time to mature, before leaping to a 50% RPS mandate.


28 Responses to “California Proposition 7: Renewable Energy to Account for Half of California's Utilities by 2025”
  1. terry hallinan says:

    “most of California’s conventional geothermal power resources have already been developed.”

    Simply not true. While the hype of EGS, which faces enormous obstacles, is distracting attention from conventional geothermal, many accessible resources remain undeveloped.

    The Salton Sea area contains a very unusual geothermal resource that has only been lightly developed.

    The Geysers remains the world’s largest geothermal power generator despite a half century of misuse. It currently only generates about half its peak production and still only replaces about a third of the geothermal brines extracted.

    I have diaried a geothermal resource at Fort Bidwell that has been growing like Topsy from initial plans long ago for low temperature direct heating @

    http://www.dailykos.com/story/2008/7/22/23749/1116/848/555445

    Besides lack of knowledge, an obsolescent grid, a bureaucratic maze, few domestic geothermal developers and political indifference, a huge obstacle is the distraction from lesser technologies.

    Seldom even mentioned is biomass which today generates more power than all but hydro. Even with hydro, run of river is quite viable.

    Best, Terry

  2. Kelly says:

    There is a distinction between photvoltaic solad and thermal solar for producing power. Photvoltaic is still very expensive for individuals and businesses to install and generate electricity from. Solar thermal, as called for by the initiative will come from large power producing plants able to compete with coal, natural gas, and nuclear plants.

    The costs of infrastructure and output for a solar thermal plant may entail high prices just like any other construction project, but that is a cost to the company, not to Californians.

    The expenses you are talking about are relative to who will be taking them on. It’s important to know proposition 7 provides protection for consumers and taxpayers. Utility companies cannot pass their penalty expenses onto their rate-payers.

    It is MORE important to note that a 50% RPS standard by 2025 IS POSSIBLE and can be done if WE decide to do it. 25% isn’t enough. Our current course of electricity consumption and production must change if we are to alleviate and hopefully avoid the consequences of climate change. It isn’t a matter of voting yes or no on proposition 7. It’s a matter of changing the way we generate electricity as quickly as possible.

  3. Gary says:

    FYI I looked up the difference between Solar Thermal and Solar Photovoltaic

    Photovoltaic panes are optimized to generate electricity from the sun. Solar thermal, on the other hand is optimized to generate hot water.

    As a matter of fact, solar thermal technology is five (5!) times more efficient at heating water than converting photovoltaic electricity into hot water.

    here’s a link to find out more: http://solar.calfinder.com/blog/going/solar-thermal-vs-solar-pv/

  4. Reader says:

    >>The expenses you are talking about are relative to who will be taking them on. It’s important to know proposition 7 provides protection for consumers and taxpayers. Utility companies cannot pass their penalty expenses onto their rate-payers.

    Actually I read there are no means in the proposition to enforce these claims. And it seems, lots of odd loopholes. Good intentions, bad execution.

    There is a lot more to be concerned about in this. There’s a reason so many are against it. It’s not just the utilities. Do your own research.

  5. michael McCullough says:

    My understaning of proposition 7 is that hydropower , except for small hydropower, is not included in the definition of “renewable” as given in the initiative. For some reason California has an animus against large hydropower and just redifines it as non-renewable even though many definitions say otherwise. Presently 19% of electric power generated for Califronia is hydropower. Renewable is given as 10,.9%. By my mathematics we are at the 30% level of renewable anergy right now. I am sending this comment because your discussion of Proposition 7 seems to agree that hydropower is indeed renewable but must be written off? Seems like newspeak as given in George Orwell’s novel “1984″. Presenly the CA energy mix is as follows:

    Nuclear 12.9%
    Natural Gas 41.5%
    Large Hydro 19.0%
    coal 15.7%
    renewable 10.9%

    By the year 2025 we must eliminate 40% from the above list, excluding the present renewables. Which 40% will we destroy? My choice would be natural gas in order to reduce considerably greenhouse gases and cost. Only thing left would be coal which has longterm contracts that cannot be broken and will probably persist. Proposition 7 is completely stupid , may create untold havoc and possibly real damage to our industry. It is put forward by a group of extreme ideologs who have no understanding electric energy. By the way, has enyone estimated the costs to decommision present utilities and build new ones in just 17 years.

    Michael McCullough
    Aliso Viejo, CA

    PS. The main contriutor to this effort appears to be Peter Sperling; a billionaire who is not even a resident of our state.

  6. John Goit says:

    I live near Lancaster CA, one of the highest wind zones in the state. The law suites are building now over the new transmission lines just to get to the 25%. New 3.4 meg generators are stored and waiting to be put up but without the transmission lines they are usless. The not in my backyard syndrome is live and well in my area.

  7. Christian Cullen says:

    The solution is so simple noone will even speak of it. Write checks to homeowners, landlords and small businesses that are ” net producers” of renewable energy, thereby encouraging the placement of solar and wind by those entities. Small scale producers could provide 10-20% of California’s energy needs if only the big utilities would let us.

    Remember the top three contributors to no on 7 are PG&E CAL ED and Sempra. hhhmmmmmmm

  8. Wayne Miller says:

    The one thing left out of the equations in your commentary is the energy needed in 2025.
    Generating electricity and such is fine but as a solar teacher and advocate for 30 years I want to point out the first aspect of any of our future design is conservation.
    Along with new renewable sources we need more efficiency in our transportation, appliances, building as well as our production.
    The Carter Administration was able to put in place conservation practices that dropped our consumption 20% overall nation wide in a few years.
    Another important aspect of electrcal generation is line transmission from centralized power plants. The power loss is 18 to 20%.
    By putting lots of smaller and decentralized energy producers (like our rooftops) we can save a big chunk of that.
    Who would be against that ?
    FOLLOW THE MONEY.

  9. Gary says:

    Google ‘peak-oil’ and you’ll find thousands & thousands of web pages. The oil industry will continue to make even greater profits vis a vis dwindling supplies. The oilies are the huge source of funds behind the defeat of Prop 7. Do the math. 20% renewables won’t make a dent as fossle fuel’s availability spiral ever downward. Supply & Demand. The ever dwindling fossle fuel supply means ever huger profits to the oilies. That’s why it appears there’s a ‘non-partisin’ effort to defeat 7. The Oil lobby owns both sides. Plain & simple. It’s not U.S. currency any more, or pound stearling, or eurodollar. The petro dollar IS our new currency. Own the source of (energy)power, and you own it all. Though we need prop 7, I doubt that 7 will pass, due to the opponent’s wealth.

  10. Reader says:

    >>The oilies are the huge source of funds behind the defeat of Prop 7.

    So those who are positioned to receive the 30MegaWatt 20 year contracts don’t have funds the way “oilies” do? Give me a break!

    Those who stand to profit off of Prop 7 won’t be average businesses or California residents, those will be the big players. You don’t give a 20 year contract to an average small business, you give those to hugely powerful corporate interests.

    Check out the list of opponents and tell me what percentage of those are “oilies” or getting money from them –

    http://ballotpedia.org/wiki/index.php/List_of_Proposition_7_opponents

  11. Benjamin Gatti says:

    Prop 7 includes all “Solar and CLEAN energies”

    Can anyone spell NUCLEAR?
    is Nuclear Clean?
    One could argue that 70 nuclear plants in France have been operated for 20-30 years without one ton of CO2, mercury, particulates, or anything else.

    If Prop 7 is a nuclear proposal, it ought to say so; if it is not a nuclear proposal, it ought to be clear about that as well. The risks of nuclear energy are unique and the decisions makers should understand what decision they are making here.

  12. CathyW says:

    It would be nice if the text of the propositions were easily available. I hear all the rhetoric on TV, both pro & con. However when I GOOGLED, “California Proposition#7″ this is what I find.
    Some of us like to read the text of the propositions and evaluate the situation.
    Some things that seem too good to be true really are that. Or here things that seem really bad, some times are not that bad and will work.
    Stop the rhetoric; send a full copy of the proposition to all California Voters so we can decide for our selves.

  13. Ed Ring says:

    Cathy – I wholeheartedly agree. Here is the text:
    Proposition 7 – Full Text of Proposition

  14. R Shearsmith says:

    After perusing the proposition paragraphs, I see that the only path open to the voters of California is, Vote YES! It is only in the interests of the major power producers to vote NO.
    California has everything to gain by implementing the statutes of this Proposition.
    Why are we only receiving one side of this initiative through the media? We need people to hear what is at stake.

  15. Laddie says:

    I am inclined to express a negative opinion on Proposition 7, because I dislike the knee-jerk folk who react toward any businesses (power & oil specifically, in this case) larger than a mom-and-pop store, as though it were an enterprise of evil.
    I intend to read the full text of the proposition. (I don’t trust out-of-state liberal billionaires as much as I trust regulated public utilities).
    I believe we need to be wise in energy consumption.
    I believe we need to utilize all practical sources of alternative energy, including nuclear. It is obvious that wind and solar can not produce electricity when the wind isn’t blowing (a lot of the time, even in windy areas) and the sun isn’t shining (well over half the time, in our latitude) strongly enough to be productive. Nuclear generation is a low-cost, proven technology that suffers from a bad public image created by some of the same lobbies that are now pushing Proposition 7.

  16. Bob Downs says:

    Why don’t we just let economic forces of all this just work things
    out without forcing some stupid legislation on things??

    Ecomics should alway govern these kinds of things.

    If alt. energy becomes competive and cost effective with conventional sources then alt will become widely used. If
    it remains costly then it just isn’t worth all the fuss.

  17. PoCA says:

    50% renewables by 2025 is possible . . . to think this cost will not be past down to Californians is stupid. The utilities wont make money which would mean the investors wont make money. Government bail out and increased taxes to recoup utility cost when these power companies file for bankruptcy? Im glad I don’t live in CA because the people spewing these numbers simply have no idea what it takes to meet those goals.
    Oh ya … this is probably the worst time to be building new generations. We are competing with Asia for materials and prices are going no where but up.

  18. amy says:

    Would someone please translate this proposition into layman’s terms? Thank you!

  19. Kate says:

    Thank you for this writeup. I’ve written about this “On the Ballot Propostion 7” and feel like there’s a real lack of informed discussion about this proposition in the electorate.

    One of the big problems with the initiative is that it squeezes out small providers (over 60% of CA’s current solar providers) at the expense of larger, not-yet-built facilities.

  20. James Bishop says:

    One of the big problems is actually that the big utilities will assume that the electorate will not take the time to reseasrch Proposition 7. This proposiiton, after reading it, in no way ‘squeezes out’ small renewable energy producers. Also, we need to realize this is a completely different market. Utility-scale production versus small homes and businesses with photovoltaic panels. Come on everyone. The time is now to really do something. Stop the bickering, stop the committees and town hall meetings. WE now are faced with a historic opportunity. Let’s not forget who is fronting the bill for the opposition: The big utilities that got is into the energy crisis mess in 2001. Should we really side with them again??

  21. Robert says:

    As the price of oil goes up the relative price of renewables goes down. Technology tends to increase efficiency. Competition keeps the price low. We should be encouraging innovation in whatever form it takes. Any measure that squeezes out the small player cannot be good.

  22. toegiv says:

    A concerned citizen’s lament over green initiatives

    I have read with increasing alarm the confusing and muddied points surrounding Proposition 7, otherwise referred to as Big Solar. Under current provisions, the utility companies in California are supposed to expand their renewable portfolio standard by 1% in order to meet the current milestone of 20% by 2010 (according to SB1078 and SB107 and AB32). But as of this writing their commitment is only 10.9% and we are in the 3rd quarter of 2008. Apparently, mathematics isn’t required when shaping a law, or someone would have been able to add 1% annual growth to 10.9% current progress and realize that 20% is unachievable in 2010. It’s no wonder that the US educational system is the laughing stock of the industrialized world.

    In fact, according to Sacramento Bee’s own article, “Utilities are not likely to reach the current target until 2012 or 2013, according to the California Public Utilities Commission. The portion of renewable energy California consumes actually has declined in the past five years, from 14 percent to 12.7 percent.” In other words, we’re currently going backwards and now the opponents of Prop 7 don’t want to buck the trend. Is it little wonder why they wish to sweep this under the rug?

    Proposition 7 will require California utilities to increase their purchase of electricity generated from renewable resources by 2% annually to meet Renewable Portfolio Standard (RPS) requirements of 40% in 2020 and 50% in 2025. This is the most aggressive approach to switching to renewable energies and it is little wonder why the corporate giants, knowing that they are currently reducing, not increasing, their portfolio of renewables, certainly don’t want to go back to being environmentally responsible, especially if the fines they have to pay for noncompliance will be prohibited from passing along to their electric rate-payers. Also, they won’t be able to stick the consumers with all the costs associated with the switch to renewables as price impacts on consumer’s electricity bills will be less than 3 percent.

    This citizen is concerned that big business has once again reared its ugly head and decided to oppose improving the environment with knowable and doable resources. Among other giants wishing to be environmentally irresponsible is SMUD, but one of Prop 7’s star pitchman is David Freeman, the blunt-talking former head of SMUD.

    “If we don’t get off of non-renewables in this decade, then global climate change will change this life as we know it. We are in a crisis,” Freeman said at last week’s hearing. “As a guy who has run utilities, I can tell you it’s important to keep their feet to the fire.”

    David Freeman knows what he’s talking about. He isn’t some spotted owl lover who likes to camp out in trees. He’s a clear-headed businessman who has seen how things work from the inside. His words ring very prophetic, “As a guy who has run utilities, I can tell you it’s important to keep their feet to the fire.” Opponents of Prop 7 want to extinguish the fire and return to the “good ol’ days” when no one paid attention to the environment and renewables were simply ideas that old hippies played around with. This old hippy wants to turn up the heat on that fire and make sure that big business does what it’s supposed to do, become environmentally conscious and concerned.

  23. Andy says:

    How quickly we forget…

    Utilities didn’t cause the energy crisis, Gray Davis did. It almost bankrupted all the utilites in SoCal… Edison managed to avoid it but PG&E didn’t.

    The article is being realistic. To provide that much renewable power in that time period is just flat out not possible. All the utilites are paying extreme prices right now to fuel natural gas generation of power. It only makes sense for them to get off natural gas dependancy and go to renewable power…

    Natural Gas cost has risen over 50%!!! Its not the same price as gasoline. I don’t see any of the utilities raising their rates 50%… not even close, the PUC won’t let them!! So they are absorbing the cost of natural gas.

    The idea is already there, this is just a burden too heavy to bear.

  24. Tyler says:

    while I agree that prop 7 is a bad thing, I wish the person who wrote this knew more about solar power. it seems that the mainstream media is consistently 5+ years behind when it comes to quoting solar prices. $7/Wp is reasonable maybe for a 2kW solar roof, but the huge multi MW installation going in in germany and spain currently are closer to $3/Wp installed cost.

    We will certainly see installed cost of large scale solar fall to around $2-3/W in the next few years.

    That said, it sounds like prop 7 is poorly implemented. let’s do a rewrite and rethink and try again next year, this time maybe with the buy in of the utilities and solar companies and environmental groups.

  25. Nick Taylor says:

    I am pro oil. I was born pro oil. I will die pro oil. I will say this much: Why are green people some of the biggest hypocrites in this world. Why do I say this? Every time that you purchase gasoline or other petroleum products, you are supporting oil, whether it be drilled and refined by Americans or Arabs.

    If you really mean what you say, don’t be a hypocrite.

    I am pro Arab. I have friends that are from Yemen, Saudi Arabia, Dubai, and Palestine. They are good guys.

    They feel the same way that I do. They would feel alot better if you didn’t buy their products if youare that serious about your views.

    Hypocrites are low. Very low.

    Sincerely,

    Nick Taylor

  26. Connie says:

    Will some publication clearly tell us who us supporting/ not supporting this Prop 7, and why… without evasive names such as “Citizens committee” , ” a buisness man from Arizona”, etc.

  27. Ed Ring says:

    Connie: It appears one of the primary backers of Proposition 7 is Peter Sperling:
    http://ballotpedia.org/wiki/index.php/Peter_Sperling

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