Wednesday, February 6, 2013

California expands its renewable energy market

In the last ten years or so the state of California has been recognized on nation-wide level as the leader in renewable energy development. Judging by the latest plans the state looks likely to keep this lead for many years to come, especially after California's Governor Jerry Brown signed the renewable energy bill, which requires that 33 percent of the state’s electricity comes from renewable energy sources by 2020. This is a kind of renewable energy portfolio standard that clean energy investors like, and California will likely attract the lion's share of total nationwide renewable energy investment in years to come.

In order to achieve this target California has already announced plans to increase its renewable energy capacity by adding approximately another 9,000 megawatts (MW) of renewable energy by 2020, with the main emphasis on solar panels, wind turbines and geothermal power plants.

Why is California planning yet another big renewable energy expansion? For starters, California wants to further enhance its leadership position in nationwide renewable energy development, and second California is well aware that strong renewable energy development attracts new investments which create new renewable energy jobs as well as other benefits that will move state's economy forward. California is also having trouble with air pollution in many of its urban areas (Los Angeles), and more renewable energy sources such as solar and wind would no doubt reduce the impact of air pollution in many of its cities, particularly when combined with initiative for more hybrid and electric cars.

The stimulating renewable energy legislation is the key to develop a stable renewable energy business and create friendly environment for new investments. Renewable energy investors want long-term safety before making their business moves, and California is providing them exactly that.

If we look at California's renewable energy legislation more closely we can see that California needs to meet a 20-percent of electricity target from renewable energy sources by December 31, 2013, a 25-percent by the end of 2016, before achieving the final target of 33-percent of renewable electricity by the end of 2020.

This rapid renewable energy development in California is good for the entire United States because California is yet again showing the path other U.S. states could follow. If U.S. wants to be competitive with China in clean energy race these types of renewable energy mandatory targets will have to become the rule, and not just the exception.

California is currently the nation's leader in installed solar and geothermal power capacity. Wind power development isn’t looking bad either. All prerequisites are there, and California can already start looking forward to a clean energy future.

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