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Unless we dramatically decrease global warming emissions, the cost to California of meeting increased electricity demand could be more than one billion dollars per year.
 

IMPACTS Electricity

If global warming is not curbed, California residents are likely to face dramatically higher electricity costs and endure air pollution from dirtier sources of energy used to meet increased demand. However, California has an opportunity to advance new and innovative policies for reducing global warming emissions from its electricity sector, thus driving global progress on clean energy and energy efficiency and leading the way to reduced global warming emissions worldwide.

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Hotter Temperatures, Increased Electricity Demand

If global warming emissions continue unabated, statewide annual temperatures are expected to increase by as much as 10°F by the end of the century. As temperatures rise, electricity demand will also increase. In fact, an 8-10°F temperature increase is expected to lead to a 20 percent increase in annual electricity demand, assuming no growth in population. California's population, however, is expected to grow from 36 million today to more than 55 million by 2050, resulting in even greater energy demand.

Decreasing Hydropower Supply

As temperatures rise, diminished snow melt flowing through dams, potentially exacerbated by decreasing precipitation, would decrease the potential for hydropower production, which now comprises about 15 percent of California's in-state electricity production. If temperatures rise to the medium warming range (5.5-8°F), and precipitation decreases,* hydropower production is projected to drop by up to 30 percent.

Costs to Ratepayers

Rising energy demand combined with reduced hydroelectric output at critical peak times could place a significant financial burden on the state. Even a mere three percent growth in electricity demand caused by global warming is estimated to cost the state nearly a billion dollars a year by 2020. If global warming causes a 30 percent reduction in average in-state hydropower generation, ratepayers would have to spend more than one billion dollars per year (assuming an average retail cost of 10 cents per kilowatt-hour**) to purchase sufficient energy to replace this lost hydropower.

Increased Electricity Demand Can Lead to Increased Burning of Coal

California's abundant supply of potential renewable energy such as wind and solar power, along with increased energy efficiency, are fully capable of meeting California's normal growth in electricity demand without producing additional global warming emissions. However, the additional increase in electricity demand and loss of potential hydropower supply due to unchecked global warming could increase pressure on California to develop or purchase energy generated from dirty fossil fuels such as coal

There are 27 new coal-fired power plants being proposed for the western United States. Coal-producing states are eager to serve the rising demand, particularly of coastal states like California, with new coal-fired electricity. Coal power plants emit even more global warming emissions than the oldest, least efficient natural-gas fired plants. Unfortunately, only two of the plants being proposed would use advanced gasification technologies, and even these plants are unlikely to use sequestration to prevent global warming emissions from being released to the atmosphere, at least in the near term. The global warming emissions from just three 500 mega-watt conventional coal-fired power plants would offset all of the emissions reductions from the regulated utilities' energy efficiency programs.

Renewable Energy Potential in California

California is committed to generating at least 20 percent of its electricity from renewable sources like solar, biomass, geothermal and wind by 2010. Governor Schwarzenegger and state energy agencies have expressed a preference for increasing this percentage to 33 percent by 2020. California has plenty of untapped renewable potential, and the state should focus on overcoming the regulatory and technical obstacles to maximizing that potential so that we can fully use our renewable resources to reduce global warming emissions.

Reducing Global Warming Emissions from Electricity Production

In order to be on track to avoid the most harmful impacts of global warming, scientists agree that the industrialized world will need to follow California's lead and reduce global warming emissions on the order of 80 percent below 1990 levels. California is currently implementing or considering several policies that will help the electricity sector reduce its fair share of emissions. These include consideration of a greenhouse gas "cap" on utility emissions and a "greenhouse gas performance standard" that would set an upper limit on the emissions of any power plant to which a utility makes a new long-term financial commitment at the equivalent emissions of a combined-cycle natural gas power plant. Additionally, the large investor-owned utilities are currently required to account for the future cost of reducing carbon emissions in choosing energy sources. These solutions are crucial first steps, though additional measures are needed to curb global warming emissions. We need to enact policies such as an overall enforceable cap on emissions from all sources to ensure that we avoid the most devastating impacts that global warming could cause in our state.

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Sources

Franco, G., and A. Sanstad. 2006. Electricity Demand and Climate Change in California. Online at www.climatechange.ca.gov.

State of California, Department of Finance, Population Projections by Race/Ethnicity for California and Its Counties 2000-2050, Sacramento, California, May 2004.

Cayan, D., A. Luers, M. Hanemann, G. Franco, and B. Croes. 2006. Climate Change Scenarios for California: an Overview. California Energy Center Report. Online at www.energy.ca.gov/2005publications
/CEC-500-2005-186/CEC-500-2005-186-SF.PDF.

Medellin, J., J. Harou, M. Olivares, J. Lund, R. Howitt, S. Tanaka, M. Jenkins, T. Zhu. 2006. Climate Warming and Water Supply Management in California. California Climate Change Center Draft Report. Online at www.energy.ca.gov/2005publications
/CEC-500-2005-195/CEC-500-2005-195-SD.PDF.

Vicuna, S. R. Leonardson, J. Dracup, M. Hanemann, L. Dale, 2006. Climate Change Impacts on High Elevation Hydropower Generation in California's Sierra Nevada: A Case Study in the Upper American River. Online at www.energy.ca.gov/2005publications
/CEC-500-2005-199/CEC-500-2005-199-SD.PDF.

*The expected hydropower production losses presented here are based on the projected streamflow losses of up to 27 percent. See Cayan et al. 2006 for further details.

**Actual retail prices in 2003 went from $0.074 to $0.195 (http://www.energy.ca.gov/electricity
/current_electricity_rates.html)

***Assuming the industrializing nations follow a lower emissions pathway as well.



GLOBAL WARMING PROJECTIONS

See the warming projectionsTo learn more about the effects of global warming on California under different emissions scenarios, see the Impacts Overview.

INCREASING ELECTRICITY DEMAND

chart showing increasing electricity demand
chart key

Chart source: Climate Action Team report to Governor Schwarzenegger and the legislature (March 2006).


RESOURCES & LINKS

energy.ca.gov: "Climate Change Impacts on High-Elevation Hydropower Generation in California's Sierra Nevada" California Climate Change Center. (PDF)

energy.ca.gov: "Climate Change and Electricity Demand in California" California Climate Change Center. (PDF)


Union of Concerned Scientists