California State Energy Grants Yield Big Savings in Megawatts, and Dollars

While media outlets often publicize government missteps, such as the U.S. Department of Energy’s loans to the now bankrupt company Solyndra,[1] they typically underreport quiet successes. One such example at the state level is the California Energy Commission’s Public Interest Energy Research (PIER) program, which leverages public and private investments to develop and deploy innovative technologies that benefit both the environment and economic growth.

PIER’s projects are often technically complex, but the results they have generated are clear, in terms of job creation and electric-system savings, as reports and fact sheets published in March through May of this year demonstrate.

According to one recent case study, the successful outcome of a series of projects on synchrophasors – a technology that improves the reliability and security of the electric grid — saw the fund’s initial investment of $11 million contribute to an estimated $210 million in direct savings for California ratepayers, along with an additional $90 million in broader economic benefits, projected to occur annually.[2]  As a result of the research, grid operators will receive more accurate and automatic feedback on power fluctuations that can cause problems on transmission lines. Synchrophasor applications will allow many such problems to be corrected automatically, and should also increase transmission capacity without requiring more infrastructure.  In addition, the technology will help prevent the kind of blackouts that have paralyzed California and many parts of the country in the past, according to PIER.

With a legislative mandate to support research that will enhance environmental protection, reduce waste, and promote advanced energy and transportation technologies, PIER’s portfolio of grants ranges widely.

In addition to fostering the reliability and efficiency of the electric grid, successful recent projects have advanced renewable-energy technologies, optimized wastewater treatment processes, and increased energy efficiency at scales that range from the very small to the very large – from household lights and plug-in electronics to the infrastructure and systems of large commercial buildings and industrial facilities. Support has also contributed to better electric-vehicle charging technologies and networks, and improved methods of using waste products to produce clean energy.

Some grants, rather than focusing on technologies, address enhanced forecasting capabilities. Recent recipients in this category have developed methodologies that will allow California to better plan for eventualities such as the impact of future climate change on energy demand and production, and the effect of daily weather fluctuations on the output of wind and solar installations that in a few years will produce about one-third of the state’s electricity. Under California’s Renewable Portfolio Standard, electric utilities must derive 33 percent of their retail sales from renewable sources by 2020.

As an outgrowth of its research achievements, the grant program over its lifetime can lay claim to the creation of an estimated 12,000 direct state jobs and an additional 22,000 indirect jobs. Studies have also shown that in states with programs like PIER, four times more venture capital per capita is attracted for clean technology projects than elsewhere, according to California’s energy commission.

Of course, not all states have the capacity to drive innovation at this level. As one of the ten largest economies in the world, and a center for cutting-edge work in high tech, the resources California brings to bear are substantial. A recent report, for example, showed that the state accounted for 85 percent of green investments and 60 percent of green-economy jobs in the Pacific Northwest by virtue of its size and pre-existing resources.

Still, PIER’s successes show that well-chosen state investments can do a great deal to further significant technological development and economic growth.

   —  By Eleanor Saunders

[1] For  background on the bankruptcy of the solar panel manufacturer that received $500 million in federal loans, see, for example, the following articles: Christian Science Monitor (10/13/11), Christian Science Monitor (11/17/11) and The Wall Street Journal (3/27/12)

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