California's green energy spike

California quadrupled the amount of renewable energy it installed in 2008 over the previous year, according to a report released Wednesday by the state's Public Utilities Commission.

The 500 megawatts of green electricity brought online last year represents 60% of all renewable energy generation built since 2002, when California mandated that the state's investor-owned utilities obtain 20% of their power from renewable sources by 2010. In November, Governor Arnold Schwarzenegger signed an executive order raising the Renewable Portfolio Standard, or RPS, to 33% by 2020.

"Clearly, 2008 was a turning point for the RPS program and contracted projects are beginning to deliver in large numbers," the California Public Utilities Commission report stated.

The CPUC in 2008 approved projects that would generate 2,812 megawatts of renewable energy for California's Big Three utilities - PG&E (PCG), Southern California Edison (EIX) and San Diego Gas & Electric (SRE). Impressive numbers but the utilities have acknowledged they are unlikely to meet their renewable energy targets by the 2010 deadline because it takes years to get solar and wind projects online and some will inevitably fail. For instance, the financial crisis has raised questions about just how many of the Big Solar power plants the utilities are relying on will actually get built, though the $787 billion stimulus packaged signed into law Tuesday by President Barack Obama has brightened the solar industry's prospects.

California increasingly is depending on solar energy to meet its commitments to reduce greenhouse gas emissions under the state's landmark 2006 global warming law. According to regulators, utilities received 30% more bids for solar power projects in 2008 than in the previous year while wind farm proposals dropped by half and "very few" geothermal tenders were filed.

The fact that utilities received 24,000 megawatts' worth of renewable energy bids last year (more than enough, if built, to meet the 33% renewable energy target) speaks to the frothy state of the market. But before solar power plants and other green energy projects can go online they face years-long and often contentious environmental reviews, while a lack of transmission lines to bring all this electricity from the desert to coastal cities remains the green elephant in the room.

Meanwhile, regulators are reviewing a policy change that would seem to undercut the state's goal of encouraging utilities to generate more renewable energy. On Feb. 20, the California Public Utilities Commission will consider whether to allow utilities to buy so-called tradable renewable energy credits, or TRECs, from other entities to meet their green electricity mandates. Such credits are associated with the electricity generated by wind farms, solar power plants and other projects and can be bought and sold. In other words, if a utility finds itself falling short of its renewable energy goals - or just doesn't want to spend the money procuring green power - it could buy TRECs on the open market.

Green Wombat is awaiting a reply from the utilities commission on whether California utilities could purchase TRECs generated by out-of-state projects - which, of course, would do nothing to reduce the state's own greenhouse gas emissions. UPDATE: CPUC spokeswoman Terrie Prosper says that utilities will be able to buy out-of-state TRECs as long as they meet California's eligibility requirements.