California Law Supports Alternative Energy

I have spent the bulk of my career around power and fuel plants and used to spend time jumping from one natural gas pipeline to another. In each of these facilities, I can tell you that pollution emissions were a priority, and CO2 emissions were not. It was not a matter of non-compliance, it was just that nobody was talking about or concerned with CO2. With that in mind, facilities that burned natural gas were generally preferred from an installation and emissions point of view. A natural gas power plant is generally much more portable than coal burning facilities, required less overall maintenance and was much cleaner burning; making it the favorite installation for many utilities. However, thanks to a new law in California, the preference for natural gas may be about to change.

New legislation is steadily moving the economics of power away from combustion-related power generation and toward renewable energy. An announcement was made last week that the California Energy Commission has imposed new rules that forbid municipal utilities from signing power supply contract with generation facilities that use coal combustion, unless those facilities provide a way to store or otherwise eliminate CO2 emissions. Now granted coal is not natural gas, and I have not personally read the new rules yet. However, if the coal rule is a harbinger of additional rules against other combustion technologies (natural gas) then the cost of power creation for utilities that use combustion is going to get a lot more expensive. Alternatively, the incentives put forward in the state in favor of renewable solar and wind technologies may help to shift the economics such that PG&E and other utilities substantially increase their investment in new energy technologies.

Let’s face it; local government is always going to be a utilities largest customer. If that customer says I can’t buy from you unless you assure me that greenhouse gases are controlled, the utility will likely make the changes. Hopefully, the economics play out so that the utilities make changes toward alternative energy.

TAGS: PG&E, California Energy Commission, natural gas, alternative energy, greenhouse gas storage, co2 emissions, CO2 laws