JIM LEHRER: Now, more about the renewable energy programs President Obama highlighted today in Denver. In California, there’s a push for green sources of power, and that’s the subject of our Science Unit story, reported by NewsHour correspondent Spencer Michels.
SPENCER MICHELS, NewsHour Correspondent: In what is still cattle country an hour’s drive east of San Francisco, turbines turn slowly but powerfully in the winter wind, producing carbon-free electricity using no gas or coal. Bryan Maddock, who maintains the Buena Vista Wind Farm, has been in the industry 18 years.
BRYAN MADDOCK, Babcock and Brown: The technology has gotten better. The turbines have gotten bigger. You can produce more electricity with fewer numbers of turbines. It’s clean, renewable energy.
SPENCER MICHELS: The question is, can wind and other renewables provide enough energy to replace a significant amount of fossil fuel? That’s a dilemma facing utilities nationwide, including Northern California’s Pacific Gas and Electric, which provides energy to 15 million customers.
Right now, almost half of the power PG&E uses comes from burning natural gas; 12 percent comes from renewables. California law requires investor-owned utilities like PG&E to raise that figure to 20 percent by 2010 statewide.
PG&E’s CEO Peter Darbee says his utility is poised to meet that goal.
PETER DARBEE, CEO, Pacific Gas and Electric Company: We’re aggressively working to not only meet the requirements the government has put in place with respect to renewables, but to exceed those targets.
SPENCER MICHELS: But Gov. Arnold Schwarzenegger has ordered the target raised to 33 percent by 2020.
GOV. ARNOLD SCHWARZENEGGER (R), California: One of the great things about California, of course, is that we always push the envelope. That is why today I am proposing to set our sight even higher.
SPENCER MICHELS: No problem, says Dan Kammen, professor of energy at the University of California at Berkeley.
DAN KAMMEN, University of California, Berkeley: We’ve already seen a number of countries with resources poorer than ours hit higher targets. Denmark and Germany and Spain are all having wind alone being 20 percent.
SPENCER MICHELS: The State Public Utilities Commission President Michael Peevey, who is also optimistic, says the goal should help spur on the industry.
MICHAEL PEEVEY, California Public Utilities Commission: Those mandates for renewable energy are to stimulate the growth of the solar and wind and geothermal industries and to reduce greenhouse gases. Those renewable energy projects reduce our dependency on coal or on nuclear or on oil.
California goal is 'challenging'
SPENCER MICHELS: Yet even for people in the renewables business, like solar energy developer Bob Cart, the California mandate of 33 percent renewables is daunting.
BOB CART, CEO, GreenVolts: I think it's a huge challenge. I think it's going to take us a great effort from all different parts of industry and government to pull off. The grid that we need is not in place. The technologies are not in place. We need a lot of people to really push hard to pull that off.
SPENCER MICHELS: Cart is CEO of GreenVolts, which raised $45 million in venture capital and has set up a small solar field on a cattle ranch just down the hill from the Buena Vista Wind Farm in Byron, California.
The company has a 20-year contract to sell its power to PG&E. This isn't the more familiar rooftop solar, and it's not a giant desert solar field, either. It's a two-megawatt demonstration project, which is meant to create a model for generating inexpensive power to nearly 1,000 nearby homes.
BOB CART: The sun is striking those mirrors. And their shape points all the light onto a very small solar cell that concentrates it like a magnifying glass. And it's a photovoltaic cell, so it takes sunlight and converts it to electricity. And we wire them all together, hundreds or thousands -- or hundreds of thousands of these devices to produce the power.
Diversifying renewable sources
SPENCER MICHELS: But since wind and solar power are intermittent and depend on the sun shining and the wind blowing, PG&E is hedging its bets. It has just completed construction of this $386 million natural gas power plant not far from the wind farms and the solar fields.
The plant produces enough electricity to power 400,000 homes around the clock, rain or shine. But even though it's efficient, it still emits carbon, and natural gas is not renewable.
So if wind and solar as renewables face limitations, what is left? California also benefits from the presence of geothermal energy from the Earth's interior. Electricity is made from the steam emanating in natural hot springs or geysers.
Currently, geothermal is the state's largest renewable, but it's a finite source located only in volcanically active areas where molten rock is close to the surface.
Biofuels, such as methane gas from cow manure and other waste products, are promising, but that industry is still in its infancy. And there's hydroelectric, which uses falling water to create electricity, but it depends on rivers being dammed, and most already are, so there's not much room for growth there.
PG&E's CEO Peter Darbee says that, despite frustrations, the utility will strive to meet the governor's new goal.
PETER DARBEE: The nature of our business is we, rather than fight it, decide that we will do it. I think the thing that frustrates us sometimes is the biggest obstacles to complying with the government are oftentimes the government or different agencies of government.
Lack of regulation 'problematic'
SPENCER MICHELS: Getting permits to build new power sources, even renewable ones, and to construct long transmission lines from desert solar sites to cities has frustrated utilities and discouraged investors.
Another concern is that Californians, especially low-income consumers, will end up paying more for power. Mark Toney is executive director of a consumer group, the Utility Reform Network.
MARK TONEY, The Utility Reform Network: There's only a limited amount of renewable energy that's been built in the state. What's going to happen is that these renewable energy generators are going to be able to charge a higher and higher price to all the utilities that are required to buy from them.
SPENCER MICHELS: He also worries that a lack of regulation could be as problematic in renewables as it has been in fossil fuels.
MARK TONEY: The reason you need regulation is you need to protect against situations in which developers manipulate the market to gain windfall profits. What we've learned is that, if people can manipulate the market, they will manipulate the market.
SPENCER MICHELS: California businesses don't favor more regulation, but they, too, worry about the costs of alternative energy. Dorothy Rothrock is a lobbyist for the California Manufacturing and Technology Association.
DOROTHY ROTHROCK, California Manufacturing and Technology Association: Moving to a 33 percent percentage of renewables in the system is going to be much more expensive than the alternative. If you have a strict mandate, then you'll have utilities going for renewables at whatever cost.
PETER DARBEE: You know, I think a lot of environmentalists like to duck that issue, but I'm going to be candid with people. Renewables are more expensive. But the question is, more expensive than what? Current gas-powered turbines? Yes. But are they more expensive when you consider all of the costs of carbon and the alternative of doing nothing? The answer is no.
'The future favors renewables'
SPENCER MICHELS: Utility Commission Chairman Peevey says prices for some renewables are already competitive.
MICHAEL PEEVEY: Wind is at least as cheap as natural gas today, in term of its generation costs. There's no question about it. Solar is coming down rapidly in cost and soon will be there. On top of that, these don't generate greenhouse gases.
SPENCER MICHELS: And Dan Kammen thinks the future favors renewables.
DAN KAMMEN: I think the real issue is that fossil fuel prices, they will go up. So if you diversify your mix towards clean energy, you can actually lower your energy bills over time.
SPENCER MICHELS: On top of all the other challenges is today's tough economy. It's a hard time to expect small companies like GreenVolts to step up to the plate and expand, so Pacific Gas and Electric is looking at buying some of them out and expanding them.
As for the rest of the country, Kammen says California could exert a lot of influence.
DAN KAMMEN: California is a large state, and so it makes a big difference in terms of reducing its own emissions, but it also sets a very important signal, because many states partner with California in terms of policies and many overseas governments look to California for what's possible, what's doable, as well as the federal government.
SPENCER MICHELS: But California has an advantage. With its ideal mix of sun, wind and resources, it may well get to 33 percent renewable power. But in other states, especially those that use a lot of fairly inexpensive coal, weaning utilities from fossil fuel will be a much longer and more contentious process.