Ringside: How Californians Can Achieve Energy Abundance

In May 2023, Governor Gavin Newsom released a report, “California’s Clean Energy Transition Plan,” which provides an updated overview of the state’s official energy policy agenda. The document sets many ambitious goals, perhaps too ambitious, and its summary presents ambiguous tables that can mislead readers. In particular, on page 7 there is a table “Total Clean Energy Resources” that fails to differentiate between energy storage and energy generation.

Conflating the two is reminiscent of Newsom’s 2022 report, “California’s Water Supply Strategy,” which does the same thing. On page 3 of this document, under “Develop New Water Supplies,” is a table where “expanded storage” is counted equally with projected increases in the annual production of recycled, desalinated, and captured stormwater. But “expanded storage” does not equate to annual yield. Implying his water plan will add 6.9 million acre feet (MAF) to California’s water supply by 2040 — when 4.0 MAF of that is increased storage “above and below ground” — is extremely misleading. In any given year, at most about half of storage capacity ends up being delivered.

Similarly, it is misleading to claim “battery storage” of 52 gigawatts is going to increase California’s electricity supply. While that’s an impressive amount of electricity, none of it is generated without those batteries first being charged from some other source. Furthermore, it is more useful to express energy storage goals in terms of gigawatt-hours, and disclose that most fully charged commercial utility scale batteries today will be empty after four hours of continuous discharge, meaning the state is targeting a charge/discharge capacity per day of 208 gigawatt-hours, i.e., 52 gigawatts of output for 4 hours (this will go up when 6 hour batteries are commercialized). We currently consume not quite 800 gigawatt-hours per day in California, so this expansion of battery storage capacity – about ten times current capacity – will certainly facilitate the ongoing rollout of intermittent wind and solar farms that can’t deliver baseload power without battery backup.

But more to the point, is California’s official energy plan feasible? Can California fully electrify its transportation and residential sectors, and mostly electrify its commercial and industrial sectors? Is this practical, and are the projected increases in actual generating capacity sufficient to accomplish this objective? Can we afford it? To answer some of these questions, we worked for several months with Steve Hilton, founder of Golden Together, to research California’s energy landscape, and earlier this month released the result. Simply titled “Energy Abundance,” the report can be accessed on Golden Together’s website and also on the California Policy Center website.

The conclusions we reached were unequivocal. If California’s energy policies don’t change, we will be choosing between acute energy shortages and unaffordable energy prices, and all too often we will suffer both at the same time. Here are some of the key findings:

• California has an opportunity to set an example with its energy policies that other states and nations will enthusiastically follow, but current policies have the opposite impact.
• By attempting to achieve “net zero” CO2 emissions, we limit our opportunities to innovate, and impose unacceptable costs on all Californians.
• The California Air Resources Board’s (CARB) 2022 “Scoping Plan Update” calls for a capacity of 500,000 gigawatt-hours (GWH) of clean electricity per year by 2045. This is more than double the current in-state generating capacity, and cannot possibly be achieved in a cost-effective manner without reliance on natural gas, large scale hydroelectric, and nuclear power.
• For electricity generation, California should classify as “clean energy” nuclear and highly efficient (70 percent or more) natural gas power.
• California relies on petroleum for 50 percent of its energy and natural gas for 30 percent of its energy. At the same time, California imports 75 percent of its petroleum and 90 percent of its natural gas. It is not feasible to abruptly eliminate these fuels.
• Instead of importing petroleum, we should increase in-state production, and maintain production until cost-effective alternatives are found. Significant sectors of our economy cannot be converted to run on electricity and will require combustible fuel for the foreseeable future.
• Sales of new automobiles should not be restricted to EVs. Less restrictive policies that allow all forms of automotive technology to compete (without subsidies) will encourage innovation to develop increasingly efficient and affordable automotive technologies.

In our report, we assess the potential of electricity generating options and identify three major sources that we believe are clean, scaleable, affordable, and constitute technologies that other states and nations will enthusiastically emulate. They are ultra-efficient natural gas generating plants, nuclear power plants, and photovoltaic arrays. We believe that decentralized photovoltaic arrays, along with rapidly advancing vehicle-to-grid technologies, can enable private investors to generate, store, and deliver baseload electricity to consumers within urban areas, greatly reducing the need to expand the grid or build remote, utility scale PV farms.

We also conclude that the state’s goal of generating 500,000 gigawatt-hours of electricity by 2045 is cost-effective and relatively easy, if, and only if, California’s natural gas generating plants are not retired from service and are instead allowed to supply baseload power instead of intermittent power to balance on-again/off-again wind and solar. We also believe that 500,000 gigawatt-hours of electrical energy will only fulfill, best case, about half of California’s total energy requirements.

For the remaining, non-electrical energy we’re going to need, a realistic appraisal of California’s so-called “thermal” energy consumption, including significant portions of aviation, aerospace, manufacturing, transportation, and many industrial and agricultural applications, cannot simply assume that “carbon neutral” biofuel, synfuel, or hydrogen, will replace oil and natural gas. For this reason we call for an end to California’s regulatory assault on its oil and gas industry, particularly since we currently import 90 percent of our natural gas and 75 percent of our oil from nations with minimal environmental safeguards of labor standards.

Here are some of our key recommendations:

• Rescind the “net zero by 2045” energy policy and all executive orders, court rulings, agency regulations, and state laws pursuant to it.
• Require California’s oil to be sourced in-state whenever possible, while adhering to the most responsible environmental standards in the world.
• Increase safe, responsible drilling for oil and gas in-state.
• Repeal Governor Newsom’s executive order mandating pure EV sales for all new cars by 2035.
• Rename the “renewable portfolio standard” as the “clean portfolio standard.” Establish criteria whereby nuclear and natural gas power will be included.
• Retrofit or replace natural gas-fueled power plants in order to attain the highest modern standards and technologies instead of eliminating them.

California’s current energy strategy is a path to poverty and micromanaged energy insecurity. It is reckless and unrealistic to reject or restrict practical solutions such as clean natural gas and nuclear power, or to destroy our in-state oil industry while tacitly acknowledging that the shortfall will just be made up with imports.

The strategy we recommend preserves options and encourages innovation. We don’t know yet what breakthroughs are on the horizon, nor what disruptions are coming. Diversifying our energy sources by including gas, oil, and nuclear, while retaining or expanding solar, biomass, and geothermal — allowing all of them to compete based on price and performance — gives us the resilience to weather a shortage in any one of these.

Our energy strategy will create a diverse, competitive energy landscape that rewards the innovative spirit that is inherently Californian. Our strategy will deliver energy abundance and affordability, while protecting our environment.

We hope this report will serve as a fact-filled reference for anyone, certainly including legislators, who would like to review an in-depth alternative to California’s flawed energy strategy.