California’s Man-Made Energy Crisis

Our federalist system is designed to allow states to be “laboratories of democracy” where policies can be tried at the state level before they become nationalized. This is a good thing. Just look at the state of California for validation of this thesis. One look at how California is addressing climate change and you know what not to do in your state.

The Wall Street Journal editorial board calls out California for their man-made energy crisis. They say, “Californians narrowly averted rolling blackouts on Tuesday, but the threat looms all week amid an unpleasant but not unusual heat wave. This ought to be a warning about how the government force-fed green energy transition is endangering grid reliability, but Democrats and the media can’t break out of their climate-change conformity to think clearly, or think at all.”

Climate change seems to be the knee-jerk explanation for everything that goes wrong in California – heat wave, drought, water shortage, blackouts, brownouts, high gas prices – you name it. But WSJ editors say California’s climate hasn’t suddenly changed. Triple-digit temperatures aren’t unprecedented even in early September, despite Governor Gavin Newsome’s claims. After all, most of California is a natural desert. What has changed in recent years is California’s electric generation.

Solar and wind power have rapidly expanded thanks to rich government subsidies along with the state’s renewables mandate. California recently outlawed sales of all gas-powered vehicles by 2035 (see Green Energy Delusions). These policies have made it harder for baseload gas and nuclear generators that run around the clock to make money. Many have shut down, and the result is that the state often lacks sufficient power when the sun goes down.

California’s summer electric generation capacity increased by about 10,700 megawatts (MW) between 2010 and 2020 – potentially enough to power eight to ten million homes. The problem is that gas-fired capacity during this time declined by 4,390 MW and nuclear by 2,150 MW. Solar and wind surged 17,000 MW, but those sources can’t be commanded to run when people need them. (This energy can’t be efficiently stored.)

Therefore, the state must rely on imports from other states in the evenings, especially during heat waves. But these imports are becoming less dependable since California’s neighbors are also losing base-load generators owing to their own renewable buildouts. Arizona lost about half of its summer coal-generating capacity between 2015 and 2020.

(Sounds much like the U.S. dependency on foreign oil imports when we could be drilling for that oil in our own country.)

The result of these policies is an energy crisis when heat waves span the Southwest like the one this past week. That means asking users to turn up their thermostats and providing incentives for industrial businesses to power down. A desalination plant in Carlsbad cut water production by about 20% earlier this week to free up power for homes. That only adds to the stress when the state is also experiencing a drought.

In other crisis intervention steps, the state has installed temporary gas-fired generators to run during grid emergencies. In other words, the state that is working so hard to banish fossil fuels has become more dependent on them. Los Angeles’ municipal utility is generating nearly 30% of its electricity from coal, some of which is being shared with the rest of the state. Imagine how much worse this situation will be when gas-powered vehicles are eliminated! WSJ says, “Call it Gavin Newsom’s dirty little climate secret.”

The cost of this energy policy malpractice is not just uncertainty about energy availability. Electricity prices in California’s wholesale market surged Tuesday evening to about $1,700 per MWh compared to the normal $100 and $67 a year ago. All of this explains why residential electric rates in California have risen by 50% in the past two years – three times more than they have nationwide.

Californians paid on average about 29 cents per kilowatt hour in June, by far the most in the continental U.S. and twice as much as in neighboring states. Rates are only going higher. Green-energy subsidies don’t make electricity cheaper. They create market distortions that threaten the grid and raise prices.

Aren’t you glad we can learn from California’s mistakes?