California Utilities to be Powered by 1/3 Renewables

Editor's Note: The following is a non-sponsored guest post by Gary Fazzino, Applied Materials. We enjoy periodically bringing corporate voices to the 3p audience and invite your comments and thoughts.

California has a long tradition of leading innovation – and the clean energy technology sector is no different. While the clean energy debate in Congress continues to stall, the state is charting the way toward building a diverse, clean and resilient energy portfolio.

Much of the industry’s growth can be linked to California’s pioneering policies. Chief among them is the state’s groundbreaking global warming law, AB 32, which establishes a cap-and-trade system to reduce greenhouse gas emissions to 1990 levels by 2020. One of the law’s cornerstones is the requirement that utilities secure 20 % of their electricity from renewable sources – such as solar, wind or geothermal technology – by 2020.

Although there have been a few bumps in the road as the state works to implement various pieces of the law, the Renewable Portfolio Standard (RPS) remains an encouraging story.

Last month, the California Assembly voted overwhelmingly to up the ante on renewable energy – by approving legislation that would require utilities in the state to obtain an even larger percentage of electricity from renewable sources.
The bill, which is authored by state Sen. Joe Simitian, D-Palo Alto, codifies a 33 % RPS and replaces Governor Schwarzenegger’s executive order. The bill, authored by state Sen. Joe Simitian, D-Palo Alto, was signed into law by Governor Brown on Tuesday.

The state’s backing of the renewable energy industry to date has been a major driver of economic activity – generating new jobs, new investments and new technological breakthroughs. You need look no further than the venture capital trail. Between 2005 and 2009, California clean tech firms received $9 billion in venture capital funds. By the second quarter of 2010 alone, the state received $980 million in funds – the most in the world.

Southern California Edison recently announced that their next 250 megawatts of projects they’re doing in the coming year will be less than the market referent point for natural gas. This is a very key milestone as we decrease the cost of solar.

There’s no doubt that Simitian’s bill sends a strong message to investors about Californian’s continued commitment to clean tech investment. As Simitian stated upon passage of the bill, “I’m gratified that the Governor has confirmed California’s long term commitment to clean green energy,” said Simitian. “This bill establishes California as the national leader in the use and development of renewable energy. The new law will stimulate the economy and improve the environment, while protecting ratepayers from excessive costs.”

Two previous legislatives sessions have seen and failed to pass this landmark legislation. The third time is the charm.

President Obama recently rolled out a new strategy on energy policy to reduce our nation’s dependency on foreign oil and improve energy efficiency. One of the key elements of that strategy is to establish a national Clean Energy Standard (CES), which would require that 80% of electricity come from cleaner sources by 2035, including solar, wind and natural gas.

Applied Materials agrees that renewable energy and clean technology is the key to our country’s future competitiveness and we applaud the President for his continued commitment to fostering the nation’s clean technology industry. The fact is that without a strong policy framework in place – such as a CES, manufacturing tax credits, grant programs and low-cost financing – we risk falling further behind countries like China, Germany, Italy and Japan when it comes to clean energy.

In the meantime, it’s encouraging that in the absence of a federal standard on clean energy, the California market remains strong and dynamic.

Applied Materials will continue with energy efficiency as a cornerstone of our work as it has been for the past forty years, creating solutions that help make electronic innovations like flat panel TVs, smart phones and powerful computers both possible and affordable. We will continue applying this same capability to help our customers make solar power more accessible to everyone, everywhere.

***

Gary Fazzino is vice president of Government Affairs at Applied Materials, where he is expanding relationships and engaging in dialogue with governments that are important to the long-term success of the company. Gary is helping policy makers around the world understand the benefits of Applied Materials’ technology and shaping public policy as we explore new markets and new lines of business.