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California doubles-down on renewables

The state has enacted a law mandating that 33% of California’s electricity come from renewable sources by 2020, replacing the current 20% standard set for 2010. The new goal ranks among the most ambitious in the country and could spur more demand for the financing of wind, solar and other renewable projects.

California Governor Jerry Brown has signed into law an ambitious 33 percent target for renewable electricity generation that could stimulate even more demand for solar, wind and other renewable energy projects across the populous West Coast state.

The law, known as a renewable portfolio standard, will require one-third of the state’s electricity to come from renewable sources by 2020, replacing a current standard of 20 percent by 2010.

“While reaching a 33 percent renewables portfolio standard will be an important milestone, it is really just a starting point – a floor, not a ceiling,” Brown, a Republican, said in a letter to the state Senate accompanying his signing of his bill. “With the amount of renewable resources coming on-line, and prices dropping, I think 40 percent, at a reasonable cost, is well within our grasp in the near future.”

The standard would make it one of the most ambitious renewable portfolio standards of any state in the country, according to the Database of State Incentives for Renewables & Efficiency, a government-funded website that tracks such legislation. Twenty-nine states as well as the District of Columbia and Puerto Rico have some sort of renewable portfolio standard on their books, according to the database.

California’s current 20 percent standard has already proved a boon the renewable energy industry. In an effort to meet the mandate, the state’s three big investor-owned utilities – Pacific Gas and Electric, Southern California Edison and San Diego Gas & Electric – have upped their purchases of electricity generated from renewable sources and collectively serve 18 percent of their retail electricity sales with renewable power, according to the California Public Utilities Commission website.

The demand from utilities has in turn fueled the financing of solar, wind and other renewable projects in California, which have attracted attention from infrastructure funds as well as large institutional investors.

Global Infrastructure Partners, the New York-based $5.64 billion infrastructure fund manager, has backed Terra-Gen Power, a renewable energy developer that is financing the largest wind farm in the United States, the Alta Wind Energy Center near Tehachapi, California. And the $150 billion California State Teachers’ Retirement System has backed BrightSource Energy, a renewable developer that is currently constructing the largest solar plant in the United States, the Ivanpah Solar Electric Generating System in the Mojave Desert.

Earlier this week Google, the internet technology giant, announced it would invest $168 million in Ivanpah as part of its “going green” initiative.