Dive Brief:
- California's hydropower station reservoirs are running low, putting a limit on the amount of hydropower available to utilities in the state and forcing some to buy back-up generation in the form of natural gas, putting the state's renewable portfolio standard at risk. California wants utilities to get 33% of their energy from renewable sources by 2020.
- Carbon emissions, which had been falling steadily over 2007-2011, now appear to be rising as a result of the lack of hydroelectric power, according to the state's Air Resources Board.
- Pacific Gas & Electric (PG&E), which has 68 hydropower generating stations fueled by more than 100 reservoirs, has reported water lows of 50% of normal capacity, bringing reliability into question, particularly south of the Sierra Nevada mountain range.
Dive Insight:
If California utilities get capacity from a less clean energy resource, they will need to engage more in the state's emissions cap and trade system, where emissions are traded for credits. The higher the emissions, the more credits which must be bought. An increase in natural gas generation will result in more credits being bought.
The increasing unreliability of hydropower is going to have a knock-on effect on utility investment plans. PG&E have said their analysts are now factoring the snowfall on the Sierra Nevada, once taken for granted but now severely depleted by the arid conditions, as a highly variable resource. "It's not a negligible effect, but it's manageable," said Todd Strauss, PG&E's senior director of energy policy, planning and analysis.
While the California Independent System Operator anticipates that it will have enough generation on hand to meet demand this year, the impact of the drought on energy in the state may have far-reaching consequences.