Score: Smart Grid – 1, Proposition 23 – 0

California voters convincingly voted down the attempt by certain oil companies to abandon clean air legislation to reduce greenhouse gas (GHG) emissions first enacted back in 2006.  The vote breakdown shows that regardless of party affiliation, voters in all but 17 of the state’s 58 counties rejected this proposition summed up in a lopsided 61% to 39% victory.  Californians want a clean tech economy, and they like green initiatives.

So what does this mean for the Smart Grid?  Electric utilities in California contribute 28% of CO2 emissions, and began planning their emission reductions in 2006.  As previously blogged, California uses less electricity per capita than any other state in the US, largely due to enforced policies and regulations that increase energy efficiency of appliances and electronics as well as buildings.  However, the peak demand continued to grow as more people moved to the hot interior of the state where air conditioning is needed.  That prompted the California Energy Commission, which sets energy policy for the state, to create a loading order that governs how the investor owned utilities (IOUs) should plan to add to electricity production.  That loading order puts energy efficiency and demand response measures on top – so negawatts became part of the energy equation.  Integration of renewable energy and distributed generation comprise the second set of energy sources, and then integration of clean fossil fuels and improvement of infrastructure. 

Smart Grid-related solutions significantly factor into this loading order.  Energy efficiency and DR programs can use smart meters, Home Energy Management Systems (HEMS), and energy service providers to produce negawatts.  As California homes and businesses continue to ratchet down electricity use, we’ll continue to enjoy the savings that accrue to intelligent energy consumption.  Look for increased adoption of solutions and programs that drive down electricity usage within the state now that the voters have spoken.   

Beyond negawatts, the second step in the loading order also has a strong dependency on Smart Grid technologies and initiatives.  The Smart Grid integrates renewable sources of energy into the electrical supply chain, and supplements or “firms” intermittent renewable energy sources with energy storage.  California recently enacted an energy storage bill (AB2514) to drive the market for IOU use of these technologies, and all the IOUs in the state are building out utility-scale renewable energy facilities – looking at wind, solar, geothermal and even hydro in the form of currents and waves. The recent Federal Energy Regulatory Commission (FERC) ruling about FiTs is encouraging news for distributed generation (DG), and while some of the state utilities have been reluctant to embrace this concept, achieving a 33% Renewables Portfolio Standard (RPS) may not be possible through utility scale efforts alone.  There are lots of rooftops that are suitable for distributed solar generation – and its time to put the programs in place to accelerate deployment on a mass scale. 

DG deployment has additional reliance on Smart Grid technologies, since the electrical distribution grid must be upgraded to support bi-directional flow of electrons, and aging transformers must be replaced with new models that can handle not only the daytime loads but the anticipated nighttime loads of charging electric vehicles (EVs).  Infrastructure improvements (number 3 in the loading order) must also take place at the transmission network to facilitate remote monitoring and management of transmission lines and substations for reliability of electricity supplies.   

All of these initiatives mean local jobs to conduct energy audits and building retrofits; deploy distributed generation facilities; and conduct upgrades to the transmission and distribution networks in the state.  Despite all the gloom and doom tactics that Proposition 23 advocates used, the reality is that Smart Grid solutions, as part of a clean tech economy, will deliver tangible economic benefits to California, as well as other states that embrace them.

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