California State watchdog: Renewable energy will be overpriced for decades

The California Public Utilities Commission has apparently never met a renewable energy project it didn’t want to approve. Further, it seemingly cares little about trifles like price and the effect of sharply steeper electricity prices on California ratepayers. Electricity is what keeps everything going, and higher power prices will certainly have an unwelcome effect upon business and spending.

But that’s what’s going to happen, says the Commission’s very own Division of Ratepayer Advocates. They say that renewable energy projects, mostly solar, are routinely being approved at prices far higher than need to be paid, and that this will create sharply steeper prices for decades to come. It’s important to note that they are not opposed to renewable energy, just to paying too much for it.

They cite the Commission’s recent approval of the Abengoa solar thermal project in the Mojave as an example, saying it is at least $1.25 billion over market price and that California could get 500 MW rather than 250 MW for the same cost. You’ll probably not be surprised to learn that $1.2 billion of the cost is guaranteed by the federal government. The deal was closed hurriedly by Sept. 30, before the loan program expired, and as Solyndra was crumbling. PG&E has contracted to buy the expensive power from Abengoa for 25 years, and of course will pass costs on to consumers. Gosh, what could possibly go wrong with a large federal loan for expensive power for a site that will inevitably have cost overruns before being completed?

Absolutely nothing, says Commission President Michael Peevey, who perkily notes that hardhats and bulldozers are ready to go at Abengoa and that its benefits should not be measured by mere costs alone. Apparently the wonderfulness of expensive solar power is so totally more important than mere commercial considerations. But wait, he does allow for the fact that the deal couldn’t be re-negotiated because then the federal guarantee would be in jeopardy. So, costs be dammed and onward to our glorious solar future! Such glowingly optimistic predictions combined with cheerfully ignoring any hint of unpleasant reality makes me nervous, how about you?

Also, Abengoa will be a solar thermal plant, and not the more familiar photovoltaic. In solar thermal, the heat of the sun is reflected to a central tower where it is used to power turbines. The trend now is away from solar thermal because it is more expensive and requires water, sometimes large amounts. Obviously, this can be problematic when the solar plant is in a desert.

And finally, ahem, if California wants to regain its glory as a major and progressive business power, it really needs to do something about its websites. The Division of Ratepayer Advocates is doing important work. But their website, like too many others from the State of California, is hard to navigate, nearly impossible to find information on, and seems to have been designed in 1995 and not updated since. There are dead links and the search document function is useless. The documents don’t even have a title that tells you what the contents are about! It may be that their funding is being starved by solar potentates annoyed at their questioning of the accepted wisdom. But really, too many other State of California websites are also difficult to get useful information from.

(crossposted from IVN)

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