A partner, Roland Nikles, at our firm, Bell, Rosenberg & Hughes sent the email below. Thanks, Roland, great stuff!
“Peak electricity demand in California is approximately 60,000 megawatts. In excess of 20% of this is imported, mostly from the Southeastern U.S. and the Pacific Northwest. Roughly half of this demand is fulfilled by natural gas, a little less than a fifth by nuclear plants, and a similar amount by hydroelectric power plants. Peak usage (which happens seldom) and peak capacity are about equal, which is why we flirt with black-out conditions on hot summer days.
For 20 plus years environmental lobbying on the one hand, and rate capping on the other hand, inhibited the construction of new power plants. We stood idly by as demand rose ‘til, Enron and the partly real, partly manufactured energy crisis of 2001 jolted us sufficiently to acknowledge that new capacity must be added. In the meantime, high crude oil prices, stimulus dollars, and global warming are making alternative energy sources more viable and attractive than ever. Advances in technology since we last subsidized renewable energy (wind power at Altamont Pass, Tehachepi, and San Gorgonio, early generation solar heat in the Mojave, and solar panels for swimming pools) promise that this time round, renewable energy will be economically sustainable on a large scale. California utilities are mandated to achieve 20 percent renewable energy by 2017, and this appears eminently achievable.
BrightSource Energy of Oakland, a client [editor’s note: client of the firm at which the authors work], is one company at the forefront of this renewable energy renewal. They have contracts to develop 2,000 megawatts of solar power (heat generation technology) for California’s two major utilities: Pacific Gas & Electric and Southern California Edison. These contracts all by themselves represent a 4 percent increase in the state’s electrical power capacity.
My brother-in-law, David, an early adopter of everything cool, has a 7kw solar panel installation on his roof. If 3 million California households (26% of total households) had similar installations, that would add up to an additional 21,000 megawatts of renewable power. Assuming an installation cost of $21,000 each, that would represent a cost of $3,000/kw, which I believe would be very competitive with building new nuclear power plants ($3,500 – $4,000 per kw).
So let’s hear it for, clients, renewable energy, and brothers-in-law! As Arnold would say, Go Kalifornia!”
Steve Sacks
