California to Finance 3,500 MW of Renewable Energy within Five Years

California will finance 3,500 MW of renewable energy generation capacity within five years.

SACRAMENTO, California 2002-02-21 [] The California Consumer Power & Conservation Financing Authority (California Power Authority) has issued its investment plan to finance clean power to strengthen reserves by 2006. That capacity is equivalent to three nuclear reactors, or electricity for 3.5 million homes. “There are sufficient economic resources of Clean Energy – energy efficiency, load management, renewables and clean decentralized generating resources – to meet future reserve capacity needs,” the document concludes. “The CPA proposes a ‘clean growth’ strategy for the state” that “can be implemented in the most efficient and cost-effective manner with the involvement of the investor-owned and municipal utilities and the private sector for both conventional and renewable generation.” Work will start immediately to develop 1,800 MW of new reserves at a cost of US$2 billion. The CPA can float up to $5 billion in bonds to finance projects, which would be repaid from the sale of electricity to investor-owned utilities. “There are a number of unmet needs in California’s energy situation,” said CPA chair David Freeman, including uncertain and inadequate reserves, lack of fuel diversity, lack of consumer choice including for green energy, diminishing voluntary conservation, and erosion of integrated resource planning and procurement processes that value renewable resources. Freeman is the former head of the Los Angeles Department of Water & Power, the largest municipal utility in the United States. CPA was created last August to respond to the energy crisis in California, where most electricity is generated from coal, natural gas and other carbon-based fuels. The Clean Growth Investment Portfolio will use the $5 billion in a three-pronged strategy to finance clean energy, increase strategic reserves to meet peak demand and address local reliability needs, and finance renewable energy in public buildings throughout the state. “There are significant benefits to California from investing in clean growth: adequate reserves; a more secure energy system; more job creation and economic development; increased fuel diversity; cleaner air and environmental justice,” the document explains. “The proposed CPA Portfolio will cost less than most Californians currently pay for the generation of electricity.” The plan will be coordinated with programs of the California Public Utilities Commission, California Energy Commission, California Independent System Operator and the Department of Water Resources. The report details the 2,400 MW capacity that CPA has signed with renewable energy suppliers. “The level of reserves California has today is inadequate to remove concerns about blackouts and price spikes,” it concludes. “California needs to add conservation and renewables to its system over the next two years. The CPA’s ability to accelerate the use of clean resources to enhance reserves provides good insurance for the State’s electricity reliability.” CPA is studying projects to commercialize solar-powered fuel cells and micro-turbines that can be sited in state office buildings, schools and prisons, and the report says more efficient use of energy, combined with renewable fuels and decentralized generation, can meet any “plausible reserve capacity gap” in California.

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