California Proposition 7:
Taking the Green out of Renewable Energy

Goals, Methods, and Likely Consequences of
"The Solar and Clean Energy Act of 2008"

by James Hoffman

Appearing on California's 2008 November ballot, Proposition 7 presents itself as an urgently needed way for California to address the rising specters of global warming and climate change. Mentioning climate change nine times and the endangered Sierra snowpack six times, the 42-page Proposition observes that California has the renewable resources to meet all of the states energy needs -- especially solar energy -- if only those resources can be put to work toward the state's energy independence.

If Proposition 7 correctly diagnoses the problem, it provides a deeply flawed solution. Its flaws may not be readily apparent from the official summary of the Proposition, which emphasizes seemingly positive measures such as accelerating the schedule governing the utilities' conversion to renewable energy sources.

But Proposition 7 goes well beyond advancing the renewables targets for the utilities' energy purchases. Its numerous changes to the Public Utilities Code and Public Resources Code amount to a mandate to build giant solar factories in the desert, and massive new power transmission infrastructure to connect these facilities to the urban centers. Proposition 7 is up-front about its vision of transforming California's energy economy:

Many people are familiar with the solar power that comes from panels that can be placed on rooftops, but there is dramatic new technology that allows solar energy to be generated from concentrations of solar mirrors in the desert. These mirrors are so efficient that a large square array, eleven miles on a side, may be able to generate enough electricity to meet all of California's needs and at a lower cost than we are paying today. The desert could lead us to energy independence.
Proposition 7, SEC. 2

I critically evaluate the claims in this paragraph in a later section following an examination of the Proposition's methods. Before looking at the particulars of the measure, I back up to sketch two contrasting visions of the renewable energy future.

The Renewables Future: Solar Rooftops or Factories and Power Lines

One sense in which renewable energy sources are "green" compared to fossil-fuel sources is obvious: renewables avoid resource depletion and pollution. However, renewable generation is not without environmental impact. Large hydropower projects devastate river ecologies, and solar and wind projects can be resource-intensive and alter landscapes and habitats.

A second sense in which renewable energy sources are potentially green compared to conventional sources may be less obvious: because sunlight and wind are everywhere, they can be tapped at or near where the energy will be used, reducing the role of the electrical grid to balancing power between net producers and consumers of electricity over relatively short distances. Reductions in infrastructure demands and increases in local autonomy and energy security are among the the benefits of distributed renewable energy that Proposition 7 ignores in favor of its subsidy for industrial-scale renewable energy production -- energy that would be controlled by large corporations.

The distributed and centralized models of renewable energy development have vastly different consequences for energy security, economic control, and environmental impact.

The distributed model: Solar panels covering a fraction of California's residential and commercial rooftops would supply most of the electricity used in the state. Energy production and distribution would be decentralized, lessening the demand on the existing transmission infrastructure, and eliminating the chokepoints that brought California to its knees in 2001. Ownership of generation capacity would be spread across millions of families and businesses. Since solar panels utilize blank rooftop space, land use demands would be almost nil.

Google's campus with its 1.6 megawatts of of rooftop photovoltaic panels. source

The centralized model: Giant solar-thermal plants covering hundreds of quare miles of desert land in Southern California and supplemented with hundreds of miles of new power lines, would supply most of the electricity used in the state. Energy production and distribution would be even more centralized than it is today, increasing vulnerability to disruption. Ownership of power generation assets would be further concentrated. The footprints of the solar factories and supporting infrastructure would demand the permanent conversion of vast tracts of land, dwarfing the areas of land marred by fossil fuel extraction.

Solar Energy Generating Systems (SEGS) solar power plants III-VII at Kramer Junction, California. source

As we will see, Proposition 7 mandates the centralized model at the expense of the distributed model. But we first look at the quota system that the initiative relies on to accomplish the conversion to renewables.

Evolution of California's RPS
2010201720202025
passed:
2002: SB 1078 20
2004: SB 1478 20
2006: SB 107 2033*
proposed:
2008: SB 4112033
2008: Proposition 7204050
* proposed for study

The Renewable Portfolio Standard

Like more than half the states, California has implemented a quota system, the Renewable Portfolio Standard (RPS), requiring the utilities to obtain certain percentages of their electricity from renewable sources by target dates. Proposition 7 accelerates the current schedule with two new quotas: 40 percent by 2020 and 50 percent by 2025.

If Proposition 7 is clear about its goals, it doesn't provide a convincing program for achieving them. It relies almost entirely on only one mechanism for enforcing compliance with the RPS: imposing of fines against utilities proportional to the amount of shortfall of its RPS quotas.

Levying fines would be the responsibility of the governor-appointed five-person Energy Commission, who, the Proposition states, should consider a whole list of factors that can excuse non-compliance.

Proposition 7 reduces the non-compliance fees currently on the books by 80 percent, and appears to make the fees entirely discretionary, in that they can be "up to the amount of the shortfall in kilowatthours multiplied by one cent ($0.01) per kilowatthour."

Even if the Commission chose to impose Proposition 7's maximum fees, the rate is so low that the utilities might find it more profitable to simply pay them and ignore the RPS targets. One cent per kilowatt hour is less than one tenth of current retail rates, and as rates soar with the coming scarcity of fossil fuels, the percentage will become even smaller.

Apart from the Proposition's failure to provide a plausible method for enforcing its RPS targets, there is a question of the value of the entire RPS approach. Because it measures the fraction of the utilities' retail energy sales that come from renewable sources, the RPS does not capture progress toward renewable energy provided by growth in micro-generation, gains in generation efficiency, or reductions in demand. Because of built-in inefficiencies in the centralized energy economy, the movement away from fossil fuels would be better served if half of the utilities' business were lost to on-site micro-generation than if half of the utilities' energy were replaced by renewable sources.

Fixed Feed-in Tariff

Proposition 7 appears to build in a 22-year feed-in tariff of 10 percent for the industrial-scale "solar and clean energy plants" with language to the effect that the Energy Commission may consider it reasonable for a utility to pass on costs to ratepayers for "solar and clean" energy priced up to 10 percent over the market price determined by the Commission.

Proposition's 7 implied feed-in tariff contrasts with the incentives that Germany used so successfully to launch their renewable economy: Whereas Germany's tariffs benefit the micro-generator, Proposition 7 benefits the large wholesaler; and whereas Germany's tariffs are set to taper down over time as renewable energy technologies decrease in price, Proposition 7's is fixed through 2030.

Less Than 30 Megawatts Need Not Apply

Proposition 7's thumb in the eye of green renewable energy is that it treats industrial-scale generation very preferentially both by giving it special subsidies and by excluding micro-producers from counting toward the RPS. Ralph Cavanaugh, a lawyer for the Natural Resources Defense Council, has highlighted the language excluding micro-generation from the mandate:

For reasons that I still don't understand, and the campaign has never explained, they changed the definition of 'eligible renewable resource' under the California Renewable Energy Mandate ... They added the phrase 'solar and clean energy,' which is the initiative brand. Solar and clean energy plants are defined as '30 megawatts of greater.'

Some Proposition 7 supporters have insisted that that the initiative will not exclude micro-produced renewable power from counting toward the RPS, but the language of the Proposition is not reassuring. Here are the key definitions:

"Solar and clean energy plant" means any electrical generating facility using wind, solar photovoltaic, solar thermal, biomass, biogas, geothermal, fuel cells using renewable fuels, digester gas, municipal solid waste conversion, landfill gas, ocean wave, ocean thermal, or tidal current technologies, with a generating capacity of 30 megawatts or more, or small hydroelectric generation of 30 megawatts or less, and any facilities appurtenant thereto.
Proposition 7, SEC. 14 (emphasis added)

"Eligible renewable energy resource" means an electric generating a solar and clean energy facility that meets the definition of "in-state renewable electricity generation facility" in Section 25741 of the Public Resources Code, ...
Proposition 7, SEC. 6

The question is, do the words "plant" and "facility" mean the same or different things when used with "solar and clean energy" in these two sentences? If they have the same meaning, then installations with less than 30 megawatt capacities -- like all residential solar -- would be excluded from counting toward the RPS. Whatever interpretation might have the best chance of surviving legal challenges, the question remains: why did the authors of Proposition 7 include the 30 megawatts or more language if they intended to micro-producers to receive any of the benefits?

A micro-power installation at the Muir Commons CoHousing community installed with the help of community residents. source

Proposition 7's exclusion of micro-power renewables doesn't end with its definition of "solar and clean energy plants" as 30-plus megawatt factories. There are the minimum 20-year contracts with their built-in 22-year allowances for above-market wholesale rates, a system that seems designed to lock the utilities into long-term procurement agreements with a few wholesalers while locking out emerging micro-producers.

Proposition 7's only mention of micro-power and demand reduction stipulates that "demand-side alternatives such as targeted energy efficiency, ultraclean distributed generation" may not be considered as alternatives to the building of power lines for its (industrial scale) "solar and clean energy plants". It is difficult to reconcile the Proposition's stated goals of addressing climate change with its decree that massive power lines will be built -- at whatever cost -- while the proven cost-effective green alternatives of demand reduction and distributed generation will be pushed off the table.

In still another example of Proposition 7's browning of renewable energy, it allows as an "eligible renewable energy resource" (and thereby defines as a "solar and clean energy facility") at least one waste incinerator in Stanislaus County. How Orwellian that the "solar and clean energy" includes waste incineration in addition to landscape-marring massive infrastructure projects, while excluding distributed rooftop solar and wind.

High-tension power lines.

A Subsidy for Power Lines

Proposition 7 is, above all, a subsidy for building the huge new power lines that will be necessary to carry the electricity from the newly-built remote solar factories to the urban centers. This new transmission infrastructure will be a huge undertaking involving acquiring the development rights to, perhaps, hundreds of different parcels of land, some very valuable, using, presumably, eminent domain and large amounts of cash.

The Proposition endows its project to build transmission infrastructure with a number of benefits and privileges, including the following:

These are just some of the more obvious ways that the Proposition subsidizes new power lines. Much of the ten or so pages of new legal code that Proposition would add to California's books seems to be geared to expediting the siting of new transmission infrastructure.

There are problems with this picture beyond the tragic irony that these massive new power lines would be going up just as distributed renewable energy generation and storage technologies would be rendering them unnecessary. Control of the siting of these facilities represents a tool for the extreme concentration of wealth in the hands of a few powerful players, who, for example, may already have acquired the rights to large tracts of land whose value would be multiplied by the power lines.

A possible unintended consequence of the new power lines is that they would make it easier for the state to fall back on non-renewable generation, should Proposition 7's mandate turn into a giant boondoggle. In the future, these lines might be shipping electricity from out-of-state coal-fired and nuclear plants.

Checking Prop 7's Math: How Much Land?

I now return to the claims in the above-cited paragraph from Proposition 7's FINDINGS AND DECLARATIONS: that all of California's electricity could come from a square patch of the desert 11 miles on a side.

First consider the obvious problem of having so many of California's energy eggs in one basket, such as a giant installation in the Mojave desert. Since the electrical infrastructure does not allow the storage of more than a small fraction of the energy it supplies, a weather system producing overcast conditions in the desert would necessitate finding a temporary substitute power source nearly as huge as the output of the entire solar installation.

But let's assume that the electricity storage problem can be solved, and look at the energy equation averaged over the entire year. California's annual use of electricity is somewhere in the neighborhood of 300 terawatt-hours. How big would a solar facility have to be to provide that much energy?

One way to estimate that area is to look at existing solar plants. The largest solar energy generating facility in the world is the set of Solar Energy Generating Systems (SEGS) plants spread across three locations in the Mojave desert. The most recently built of the nine plants, SEGS IX, has an area of 483,960 square meters, or 0.19 square miles, and its gross production of electricity in 1998 was 120 gigawatt-hours. To generate the state's 300 terawatt-hours, such as plant would have to be scaled up to a size of 475 square miles -- far more than the 121 square miles that Proposition 7 claims will be needed.

Of course, the authors of Proposition 7 might have a technology in mind that is more efficient than the parabolic troughs used by SEGS. Perhaps their "dramatic new technology" refers to Sterling Energy System's SunCatcher, which has recently demonstrated a sunlight-to-grid efficiency of 31.25 percent, according to Sandia National Labs. Could this system support Proposition 7's claim?

To answer that question I will see if I can justify Proposition 7's numbers. I start by asking: how much power can be extracted from the sunlight falling on 121 square miles? When the sun is directly overhead, it delivers about 1 kilowatt of energy per square meter, or about 313 gigawatts to the Proposition's 11-mile-wide square. Multiplying that 31 percent (SunCatcher's efficiency) gives about 98 gigawatts. Multiplying that by 8 (hours per day) and 365 (days per year) nearly matches California's 300 terawatt-hour yearly usage.

Illustration from the SES website, showing the SunCatchers spaced out so as to occupy only about one-sixth of the facility's land. source

To make Proposition 7's math work, I had to make two unsupportable assumptions. First, I assumed that the plant would operate at near full power for 8 hours per day, when 5 hours would be more realistic. Second, I assumed that the SunCatchers would be so closely spaced that no sunlight would fall in between the units even when the sun is directly overhead. Because of the expense of the hardware, solar plants using reflectors invariably space the units apart so that adjacent units will not shade each other as the sun moves across the sky. This would probably be even more true with a two-axis-tracking technology like the SunCatcher than with a one-axis-tracking technology like the SEGS troughs. Based on artist's conceptions of SunCatcher deployments on the SES website, the land use requirements would seem to be at least six times as great as the Proposition's estimate.

facility footprint
(square km)
peak power
(kilowatts)
peak efficiency
Solar 1 18.21 500 - 850 12.86%
Solar 2 7.77 300 - 900 4.67%
Ivanpah 1 3.367 100 2.97%
Ivanpah 2 3.367 100 2.97%
Mojave Solar Park 1 24 553 2.30%
High Plains Ranch II 9.065 250 2.76%
Topaz Solar Farm 24.605 550 2.24%

It turns out that the land area and projected power output of a half-dozen giant proposed solar power plants have already been published. The maximum net efficiencies of these plants -- how much of the sunlight falling on the plant is converted to electricity under the optimal conditions producing peak power -- is easy to compute by dividing each plant's estimated power output by its land area. As the summary statistics in the table to the right show, the efficiencies of these plants are, on the whole, quite low compared to the 20-percent efficient silicon solar panels that are now tiling urban rooftops.

Solar Solutions: Monoculture or Diversity

A surge of interest in renewable energy technologies is driving the growth of worldwide investment in that sector, from $80 billion in 2005 to $100 billion in 2006. These technologies include, for example, several new types of photovoltaic manufacturing methods that promise to improve efficiencies and reduce cost, miniaturized concentrating photovoltaic systems that dramatically increase the ratio of power to costly photovoltaic materials, building-integrated power-generating materials such as solar roofing tiles, small-scale electrolysis and fuel cell systems enabling efficient on-site electricity storage, and new methods of harnessing the power of wind and waves.

Proposition 7's heavy economic and structural subsidies for its solar-factories-and-powerlines approach will translate into lost opportunities for the development of a diverse innovate renewable energy economy that is less demanding of transmission infrastructure, not dependent on land acquisition, and lends itself to local control. Resources devoted to Proposition 7's narrow mandate are resources not available to foster the growth of small-footprint distributed energy technologies. It's no wonder that nearly all renewable energy companies who have commented on the Proposition oppose it. According to the California Solar Energy Industries Association, it would "devastate California's small solar businesses by forcing us out of the market -- eliminating a major source of clean power and thousands of jobs." Only a handful of technologies and companies are likely to benefit from the Proposition's centralized monoculture approach to renewable energy development, and those efforts stand to do well even without Proposition 7. Today, several new solar factories are being built in California's deserts.

Proposition 7 implies, misleadingly, that "dramatic new technology" for solar power generation involving mirrors needs to be sited in the desert. The measure empowers the Energy Commission to "identify and designate Solar and Clean Energy Zones--primarily in the desert." However, the insolation (total average sunshine) in Southern California's largest urban centers is only about ten percent less than in California's sunniest deserts -- about the percentage of electricity lost in long-distance transmission. Furthermore, it is incorrect to assume that giant plants producing more than 30 megawatts will be any more efficient or any more economical to build than the many possible types of smaller installations, which span three orders of magnitude in rooftop size from the the smallest dwellings to the largest warehouses.

To the contrary, desert plants are far less efficient in their use of space than the alternatives, and are likely to cost more per installed watt of power, particularly given the number of new photovoltaic products that are poised to enter the market in the near future.

A Few Giant Players

Proposition 7's supporters have claimed that the measure will force the utilities to obey renewable energy standards, and have portrayed the measure's opposition as emanating from those same utilities. If it is opposed by PG&E and Southern Cal Edison -- companies that helped to author deregulation legislation that ultimately cost California ratepayers and taxpayers tens of billions of dollars -- then, the argument goes, the measure must be in the public's interest. This guilt-by-association tactic seems crafted to conceal the many ways in which Proposition 7 concentrates power in the hands of a few entities, if not precisely the same entities that gave California the "Electricity Crisis of 2000 and 2001".

Of the companies that appear to be poised to benefit from subsidies for industrial-scale solar facilities, several have a history of or stake in military contracting. A case in point is a recent change in ownership of the world's largest solar power facility: the Solar Electric Generating Systems (SEGS) plants located in the Mojave desert. In February of 2005, FPL Energy and Carlyle/Riverstone acquired a controlling interest in the largest part of the SEGS plants, at Kramer Junction.

FPL is a leading wholesale generator with annual revenues of $10 billion. FPL has been acquiring industrial-scale wind and solar facilities and owns and operates several nuclear power plants, which it describes as safe, reliable, and "a clean energy source".

Carlyle/Riverstone is an arm of the the Carlyle Group, a global private equity firm managing $75 billion in assets, and has a history of buying and selling military contractors. Carlyle's list of current and former employees and advisors includes George H. W. Bush, George W. Bush, James Baker III, Frank C. Carlucci (Former US Secretary of Defense), and Shafig bin Laden (half-brother of Osama bin Laden).

One company that Carlyle owns a stake in is URS, a Pentagon contracting giant that appears to be turning some of its attention to industrial-scale renewables, judging from its studies of siting plants in California's deserts, and its work to assist Sterling Energy Systems with permit acquisition. SES, which has already scored one of the largest contracts to date for energy to be produced by desert-sited solar factories, is headquartered in Phoenix, home of Proposition 7's main financial backer.

Conclusion

California's Proposition 7 might be borne of the best intentions to address the crisis of global warming and climate change. Unfortunately it applies the centralized model of the fossil-fuel economy to the emerging renewable energy economy, threatening to rob California of the many benefits offered by the distributed model of renewable energy development.

At the dawn of the distributed energy revolution, the Proposition is a mandate to build massive infrastructure -- infrastructure that will permanently mar hundreds of square miles of desert wilderness and clutter horizons with hundreds of miles of expensive unsightly power lines.

Proposition 7 will almost certainly concentrate power and wealth in the hands of a few powerful interests, while making the democratization of the energy economy more difficult by diverting resources from the proven methods of encouraging renewable energy generation. With the state having to underwrite the new mandates of the Energy Commission to oversee massive infrastructure projects -- mandates that will likely produce ballooning costs -- tax incentives and metering reform benefiting micro-generators will become more difficult to come by.

While damaging California in many ways, the Proposition will almost certainly fail to bring about its stated goal of reducing the harms of fossil-fuel dependence. With its meager and discretionary RPS non-compliance fees, its disincentives against micro-generation, and its bottlenecking of economic transformation into cumbersome infrastructure projects managed by the Energy Commission, Proposition 7 is a formula for failure.