OWOE Staff: California tends to be a polarizing state. As the most populous US state and what would be the 5th largest economy in the world if it were a country, as the home of the television and movie industry, as the home to Silicon Valley with its technology leaders and billionaires, and as the home base to many environmental organizations, it has always been a trendsetter. In the battle against climate change, California has been a leader. It is the #1 state for installed cumulative solar electrical capacity by a factor of about 3 over the #2 state (Texas). It has the highest volume of Electric Vehicles owned of any state by a factor of about 7 over the #2 state (Florida). It has required higher vehicle emission standards than the rest of the US since the 1970 Clean Air Act. It has set a goal of 100% clean electric power by 2045. It has banned the sales of new gasoline powered automobiles by 2035 and is moving toward accelerating that to 2030. Progressives and those concerned about the health of the planet love these programs. Conservatives and those beholden to the fossil fuel industry hate these programs. But, suddenly, California is making a move against residential rooftop solar power as in Florida, where utilities argue that rooftop residential solar affects their business model. That’s correct; suddenly California is limiting the ability of its residents to achieve both energy independence and greatly reduce the State’s overall carbon footprint.

The California Public Utilities Commission (CAPUC) has issued its proposal for the replacement for the State’s current net metering rules that will likely kill the rooftop solar industry in the State. The new rules would reduce what the utilities must pay for power exported to the grid, reduce previously established grandfathering durations for existing rooftop systems, and add a Grid Participation Charge of $8/month per kW of installed solar capacity. For an average-sized California home with a 7 kW solar system, the fee would $56/month just to connect to the grid, which would be among the largest fixed costs billed to solar customers in any US state. Sage Energy Consultants has analyzed the effect and concluded that residential customers will see a 55-75% loss in the value of their systems as illustrated in Figure 1.

The driver behind the new proposal is pressure by the large electric utilities in the State (PG&E, SCE, and SDG&E) to stifle the rooftop solar market in order to protect market share and boost profits. The impact will be significant – these new costs, in addition to the capital outlay required to install a new system, will make rooftop solar unattractive for most new homeowners. After years of the state promoting rooftop solar power as an important climate solution, California will take a huge step backward.

OWOE believes that all participants in the fight for energy independence and against climate change need to take a stand on this issue:

CAPUC Commissioners – get out of the utility companies’ pockets and do the job you have been tasked with. Your mission is to ensure that Californians have “safe, clean and affordable utility service”, not to protect utility companies’ present and future profits. Go back and revise this proposal to something that better balances electricity providers, in all forms, and consumers.

Utility Companies – yes, you are investor-owned and must ultimately account to your stockholders; however, if you don’t provide good service to your customers, who are increasingly opposed to your practices, you need to go out of business – it is market Darwinism. It is time to accept the fact that the world is changing and your business model needs to change, or history will leave you behind. Instead of fighting the inevitable, you should be finding ways to lead (adapt or die).

Shareholders of Utility Companies – don’t be short sighted. You need to put long-term survival and growth of your investment ahead of short term profits. Just look at what happened to the legacy telephone system. You need to force your companies to change with the world or you will be the losers.

Governor Newsom and State Senators – you have been energetic leaders and proponents of California’s fight against climate change. You are also responsible for appointing the CAPUC Commissioners. You need to push them to rework this proposal to better align with your climate goals or you should replace them.

Solar Industry  – you have been on the frontlines in the development of new technology to provide clean, reliable power to homeowners, and you have already taken a stand against this new proposal. But right now those are just words. You have the resources to fight the utilities where it hurts – in the pocketbook. How about taking a proactive approach to developing and pricing systems that will enable customers to totally disconnect from the grid?

Public – ultimately, you and your children and grandchildren will be the losers in this battle unless you make your voices heard. You can sign up here (thanks to Tesla) to provide a verbal comment directly to the five commissioners at the upcoming CPUC meetings on January 27. And/or you can email the CPUC and the governor’s office with your comments.

What’s missing from California policy is a truly integrated, long-term approach to clean and reliable energy. California needs to look at what it has (lots of sunshine, lots of geothermal) and what it needs (energy storage systems, distributed grids) before it embarks upon a flurry of disjointed, ill-conceived measures to kill its existing assets (rooftop solar, nuclear) for the sake of special interests.

OWOE Staff: An OWOE contributor shared a BBC News article with OWOE staff regarding the possible construction of four (4) Small Modular Reactors (SMRs) in the UK. This would be a demonstration project for nuclear reactors based on nuclear submarine technology that some companies are touting as a key contribution to the sustainable, renewable energy mix of the future. The following day Rolls Royce announced that it had procured sufficient funding to develop its SMR concept that would trigger additional funds from the UK government to kick-off the project, with the first plant targeted for completion in the early 2030s. A further BBC News article referenced these Rolls Royce SMRs again, along with barge mounted SMRs being developed by Denmark’s Seaborg Technologies. The problem here is not with the projects themselves or the technology, but with the way they are characterized to the public. To quote the first BBC article:

OWOE Staff: The energy world has been rocked by a number of crucial events during the past two months. In the transition to renewable energy and more particularly in the removal of fossil fuels form the energy mix, there are possibly three history-making game changers: Don’t get me wrong – I have nothing against environmental activists who are trying to save our planet. In principle, I support most of the stated goals of these individuals and organizations, and of all the people I greatly admire, Greta Thunberg could well be at the top of my list. But the recent focus of these activists on shutting down big oil, closing nuclear power plants, blocking new pipelines, banning plastic straws, etc., is misguided. Yes, all of these are contributors to global warming and other forms of pollution, and yes, the world would be better off without all of them. However, the problem is that these things represent the supply side of the economic marketplace. They are there because people want them, either directly – we want gas to drive our cars, or indirectly – we want to buy lots and lots of stuff that takes energy to manufacture and transport. Cutting supply does not solve the problem if the demand remains: cleverer or less scrupulous players will gladly jump in to fill the void. And, at the end of the day, all of us will likely be worse off.

Guest blog by S. A. Shelley: Earlier this year, the Colonial Pipeline, carrying gasoline and jet fuel from Houston to the southeast US was hacked.  The perpetrators got away with 75 bitcoins, at the time worth just under $5 million US.  Nobody really hurt, so no harm, right?

Guest blog by S. A. Shelley: September 2021 has been an interesting month as energy supply crunches of all forms appeared all over the world. China is suffering from rolling power outages that are affecting residents and industry and the authoritarian government there has ordered traders and industry to secure as many energy supplies as quickly as possible. In Europe prices for electrical power and natural gas are climbing to record highs and in the UK petrol stations are running out of petrol to sell to consumers. Pressure on energy prices is starting to manifest itself in the United States as well, with California already experiencing an increasing number of rolling brownouts, sorry “flex alerts“.  Traders are starting to buy options on future contracts for oil at $200 / bbl. They are not far off, with natural gas prices in Europe in terms of energy equivalent at $140 / bbl (see note 1).

Guest blog by S. A. Shelley: At OWOE we try to be objective in our analysis and evaluations of energy matters. But we can’t always be emotionless, or in my case, I can’t always refrain from smacking my forehead when politicians do questionable things: I’ve been near comatose for the last few weeks on account of the politicians.

Guest blog by S. A. Shelley: I know that this is supposed to be an energy blog, but for quite some time energy has become entangled with the environment, and rightly so because energy extraction and energy use affect the environment.

Guest blog by S. A. Shelley: Most readers have probably heard of the Law of Unintended Consequences, the more good that one intends then the more harm results (see also the Cobra Effect). Politicians have an intrinsic ability to apply this without fail. Then to make everything worse, there is Pournelle’s Law of Iron Bureaucracy, ensuring that even the slightest of good intentions are inevitably smashed by the insufferable protocols of bureaucracy. Such is the realm of politicians. But in the information age, the woke minority and sometimes business tycoons also suffer from these laws. Business tycoons can correct for such things, otherwise they go bust. Woke progs will often ignore reason and facts, those remnants of patriarchal suppression, in order to validate horrific outcomes. Eventually, though, the smoldering landscape or the increasing number of coal plants being built in Asia should overwhelm Woke feelings.  Unfortunately, politicians and governments are with us for as long as their privilege and pensions last and they rarely admit mistakes let alone mitigate or fix them.

OWOE Staff:The energy world has been rocked by a number of crucial events during the past two months. In the transition to renewable energy and more particularly in the removal of fossil fuels form the energy mix, there are possibly three history-making game changers:

1. The International Energy Agency (IEA) came out with its report on the state of the climate, and it was brutal toward fossil fuels. It laid out the reality of the current climate crisis and pointed to one clear action required to prevent catastrophic global warming: “The world has a choice – stop developing new oil, gas and coal fields today or face a dangerous rise in global temperatures.” It is important to point out that the report didn’t call for the immediate elimination of fossil fuels as energy sources. The IEA understands the need for some transition period to a fossil-free future. But the transition needs to be speedy, and the IEA feels that the best way to do this is to stop all new developments, live off the current reserves, and use that time to develop the technologies, change behavior and make the transition.
2. President Joe Biden issued his sweeping climate goal to cut US emissions in half by 2030 ahead of convening an historic summit with 40 world leaders to demonstrate American leadership in the quest to elimination of fossil fuels by 2050.
3. ExxonMobil, Royal Dutch Shell, and Chevron were rebuked by shareholders and the courts for not aligning their strategies with the threat of climate change. 

Guest blog by S. A. Shelley: For several years, Bitcoins and similar digital currencies have been the rage, heralded as a true medium of exchange and value that is independent of government manipulation, as is seen with all fiat currencies. However, Bitcoins in particular have also generated rage amongst environmentalists because the energy consumption and carbon emissions required to support Bitcoins approach the total annual consumption of states like New York or exceed the total energy consumption of nation states like the Netherlands or Argentina.