California’s Green Energy Drought – Keith Johnson

February 9, 2014 by  
Filed under Green Energy News

Among all the terrible things that
California’s historic drought promises to bring this year – fallow farm land,
dead livestock, more wildfires – there are a couple more nasty treats in store:
higher electricity prices and rising greenhouse-gas emissions.

That’s because the drought is hammering
California’s ability to generate electricity from hydroelectric power, which
will push the famously green state to burn even more natural gas, which is both
pricier and dirtier. It underscores yet again just how vulnerable green energy
sources such as hydropower can be to the vagaries of the weather, an issue that
will vex not just the U.S., but also Brazil, China and other countries that
have bet heavily on hydropower to run their growing economies.

California’s drought is unrelenting. The latest
information from the United States Drought Monitor shows more than 98% of
the state facing some degree of drought; for the first time, nearly 10% of the
state is deemed to be suffering “exceptional drought,” the worst
category. Since mid-January, California has been in an official drought
emergency, with Gov. Jerry Brown calling for voluntary reductions in water use.
But the biggest impacts are yet to be felt.

In a normal year, with average rainfall,
California relies quite heavily on electricity generated from hydroelectric
dams; hydropower can provide anywhere from one-tenth to one-quarter of the
electricity generated in the state. But when the rain and snow stops falling
during the relatively short wet season, it doesn’t just affect California’s ski
industry or the rich farmlands of the Central Valley. It chokes the entire water system
that underpins the state’s dams.

Federal monitors show nearly that all of California’s water resources are
essentially half-empty. Usually, melting snowpack from the Sierra Nevada
provides a shot in the arm for hydropower in the spring and summer, but
California’s sparse snowpack is currently only 16%
as deep as it normally is this time of year.

But wait – it gets worse. Since California uses
more electricity than it generates, it relies on imports from nearby states,
including hydroelectric power from the normally rainy Pacific Northwest. But
the drought is also hammering Washington, Oregon, and Idaho, where
precipitation is in many cases about half the normal level. And that will limit
California’s ability to fix its own shortfalls. The only easy answer is to use
more natural gas, which costs more and is significantly dirtier.

“There will be rate impacts, because we’ll
be using more expensive fuel, and there will be air-quality impacts in terms of
greenhouse-gas emissions,” Robert Weisenmiller, the chairman of the
California Energy Commission, told Foreign Policy.

California knows what happens when
it has to turn to more natural gas. In 2012 and 2013, thanks to dry years (and
the shutdown of one nuclear power station) hydroelectricity’s contribution to
the electricity mix fell sharply. Gas came to the rescue.

In 2011, California generated about 42 million
megawatt-hours of electricity from hydropower, and about 89 million megawatt
hours of electricity from natural gas. The next year, hydroelectric generation
plummeted to less than 26 million mWh, while gas-fired generation soared to 121
million mWh.

Through November 2013, the latest statistics
available, hydroelectric generation fell even further, though natural-gas
generation also slipped.

The outlook for 2014 in California, then, could
be one where the state increasingly turns to natural gas to supplement the lack
of both in-state and out-of-state hydroelectricity. Weisenmiller said that in
particularly dry years, like 2014, hydroelectricity generation could plummet a
further 40 percent.

That would be bad news in two ways: Higher power
prices, and rising greenhouse gas emissions.

It’s actually a delicate moment for natural-gas
markets right now. The polar vortex drove record levels of natural-gas demand
across much of the country. The prices at Henry Hub, the main physical pricing
point for U.S. natural gas, prices spiked 50% in the last week,
to levels not seen since 2008. Higher demand has drained U.S. natural-gas storage, which is currently well below average levels,
which means that even as winter temperatures retreat in coming months, that
storage will have to be replenished. That promises stubborn gas prices. Hedge
funds are already betting on gas prices going

The situation is so dire, in fact, that
California’s electric system operator asked customers across the state on
Thursday to turn off lights and shut down big appliances in order to save
scarce supplies of gas.

As California relies more on natural gas to keep
the electricity running, it will mean higher average wholesale power prices,
which means residential electricity bills will likely rise this year. Add that
to the list of other economic woes from the drought, from lost farm jobs to
shrinking herds of cattle and other livestock.

But for California, which famously leads the
nation in aggressive environmental rules and regulations, that’s not the worst
of it. Replacing clean electricity from hydroelectric dams with electricity
from natural gas means more greenhouse-gas emissions, exactly what the state
has spent years trying to avoid.

This already happened to a dramatic degree in
2012, when a weak year for hydropower and the loss of some nuclear energy
pushed California into the arms of natural-gas fired power plants in a big way.
For most states, and for the United States as a whole, relying more on natural
gas is good for the environment. Since it normally displaces coal-fired
electricity, natural gas actually helps reduce emissions.

But California already had a clean power sector.
So relying more on natural gas has had the opposite impact there. That year,
California’s greenhouse-gas emissions from the electric power sector jumped
50%, making it the biggest laggard nationwide in reducing greenhouse-gas
emissions, as The Rhodium Group documented. A hydropower deficit
this year won’t help matters any.

“In terms of reducing emissions at the rate
they need to meet their target over time, just holding steady and not getting worse
than last year is going to be a challenge,” Kate Larsen, the director of
climate change at Rhodium, told FP.

California’s cautionary tale has echoes
overseas, too. Brazil and China have bet big on hydroelectric power to provide
large amounts of clean electricity. Indeed, both countries feature mega hydro
projects – Belo Monte in Brazil and the Three Gorges Dam in China- that are at
once the backbone of future power supplies and un ugly source of social strife
in the present. And in both countries, droughts in recent years have hammered
hydroelectricity’s ability to contribute a reliable amount of power to the
national grid.

For China in particular, which faces worries about a structural
shift in rainfall patterns due to climate change, the potential loss of a big
source of clean energy represents a huge headache for Beijing. The Chinese
regime is desperately trying to clean up the coal-dependent electricity sector,
because air pollution is becoming both an environmental burden and a threat to
regime stability.

For now, California officials believe they’ve
got enough options to weather a tough year. But a fourth year of extreme
drought, with the severe impacts it is having on the power system, would be a
different story.

“If this drought were to continue as bad into
next year, then I would get nervous,” Weisenmiller said.

Justin Sullivan – Getty

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