The Political Problem

GROWING ECONOMIC DISPARITY BETWEEN URBAN AND RURAL COMMUNITIES 

Smaller and Rural Communities Being Left Behind.  The spread between rural and urban communities is a strong in California as it is in the other Western States and almost as strong as it is across the nation.  Fortunately, the strength of the Silicon Valley and Los Angeles economies is supporting a much healthier overall state economy than is true across much of the rest of the country.  Unless we find solutions that bridge this divide and allow our poorer and more rural communities to join in the economic health of our cities, we will continue to have an eroding political climate.  Further, absent a solution, these communities will face increased burdens from rising energy, water and fertlizer costs and will still be expected to produce the crops that feed much of the country and the forests that provide all of California with cleaner air.  

Energy, Smart-City and Smart-Transport Infrastructure Can Close the Gap.  California's rural areas are uniquely well suited for the development of both wind and solar energy resources.  In addition, using these resources to help with the considerable power needs of pumping water in the Central Valley can have significant long-term economic benefits for the State.  Building resilent renewable power generation capabilities in those communities will provide immediate job growth in the installation of those clean energy systems (and can do so far faster than trying to build conventional large generation plants) and will provide both an ongoing source of jobs as well as long-term lower energy costs to improve the economic health of those communities.

 

Building that clean energy infrastructure will require access to capital that many of these communities and their residents don't have.  But, the economic returns of new wind and solar projects (particularly where assisted with energy storage and demand response solutions) are such that large institutional investors should be willing to provide the needed capital at higher single digit return rates.

 

Similarly, incorporating new Smart Building, Smart City and Smart Transport solutions into these infrastructure upgrades can further improve the economic benefit to these communities. 

Building a Partnered Solution for a Better California Economy.  The technologies to affordably solve these problems are available today.  But they will need a partnered approach to enable rapid and economically rewarding deployment.  The concept of "Community Solar" is a useful starting point, but we propose a variant we refer to as "California's New Energy" that combines the following principles:

 

  • Build wind and solar capacity on governmental (i.e. schools) and commercial (i.e. larger exposed parking areas) sites where the energy is needed, but make those resources available for all local residents to participate in;

  • Finance the construction utilizing large institutional capital by providing sustainable long-term returns; 

  • Provide a mechanism by which the State's major pension funds and other large institutiuonal investors can participate in building a stronger California economy while themselves building a healthier and more resilient energy portfolio of assets with long-term viability and alignment with long-term State interests; 

  • Allow local corporations and residents to buy down their energy costs by either purchasing or renting shares in these new power plants on the same economic basis as if they had put solar panels on their own roof (through a better version of "net metering"); make them profitable partners in a better, more affordable energy solution;

  • Incentivise California utilities to participate in the program by both allowing them to participate in the long-term management of these new energy facilities and compensating them for their work in managing load distribution from these projects;

  • Incentivise California technology companies to use big data analytics, sensors and other high technology tools to more efectively manage the real-time allocation and distributions of electrons across the California grid;

  • Encourage and incent greater deployment of electric vehicles by providing charging capabilities at these new energy sites and providing incentives for mid-day and mid-night charging to align EV charging with periods of excess generation of wind and solar (thereby also reducing the "California Duck Curve" problem and further cleaning our transport systems; 

  • Factor more intelligent water pumping into the equation by increasing the share of wind and solar energy in powering water pumps and thereby also further smoothing the State's overall generation/load profile;