The rise of renewable energy has transformed power markets in the U.S. West Coast states, particularly California. The Golden State has added significant renewable power generation capacity in recent years. Additionally, record precipitation in the Pacific Northwest and California this year boosted hydroelectric generation in the region. These factors have reduced the natural gas market share of power generation in California and other Pacific Coast states, which has important implications for the U.S. gas market as a whole, especially considering that the Eastern U.S. is increasingly oversupplied and pushing its gas supply westward. Today, we look at the year-on-year changes in the West Coast power generation sector and their effect on the gas market this summer and longer term.
As we noted in our latest gas supply-demand series, Summertime Blues, increasing generation from renewable sources has made a notable dent in the natural gas market share of power generation this summer. This isn’t a new trend, but one that’s been developing over the past several years. What’s different now is that as less natural gas is needed out West, particularly in California — the second largest natural gas consumer in the U.S. after Texas — it has the potential to exacerbate oversupply conditions in the Central U.S., which is already being targeted by growing gas production from the Marcellus and Utica shales that is pushing south and west.
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We’ve discussed the various factors driving the huge changes in energy balances in California previously in California Sunset and California Scheming. One big factor has been the state’s push for renewable energy and energy efficiency. In 2011, the state enacted a renewable portfolio standard (RPS) law that required every utility and other electricity retailer to serve 33% of their load with renewable energy by 2020. That target was later increased to 50%. In early 2013, California regulators also implemented a carbon cap-and-trade market, which effectively acts as a tax on non-renewable energy imports and in-state energy production (see AARGH Matey! Cap'n Trade Sails On in California). The program resulted in higher power prices and incentivized higher imports of power sourced from fuels with low or no carbon emissions, such as hydroelectric generated power from the Pacific Northwest.
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About the song
"Here Comes the Sun" was written by George Harrison and appears as the first song on side two of The Beatles' 11th studio album, Abbey Road. Harrison wrote the song at the Surrey country estate of his friend Eric Clapton in April 1969. The song was recorded in July and August 1969 at EMI (Abbey Road) studios in London. When released as a digital download single in 2019, it went to #3 on the Billboard Hot Rock Songs Singles chart. The song has been covered by many artists such as Richie Havens (whose 1971 release went to #16 on the Billboard Hot 100 Singles chart), Nina Simone and Peter Tosh. Harrison performed the song with Paul Simon on Saturday Night Live in 1976. Personnel on the record were: George Harrison (lead, backing vocals, acoustic guitar, electric guitar through Leslie speaker, harmonium, synthesizer), Paul McCartney (backing vocals, bass), Ringo Starr (drums), George Martin (orchestral score and arrangement for strings and horns).
Abbey Road was recorded between February and August 1969 at EMI (Abbey Road), Trident and Olympic studios in London, with George Martin producing. It was the last album The Beatles recorded, although its release in 1969 preceded their album, Let It Be, which was released in 1970 when the band publicly called it quits. Released in October 1969, Abbey Road went to #1 on the Billboard 200 Albums chart and has been certified 12x Platinum by the Recording Industry Association of America. One single, "Something," backed by "Come Together," was released from the LP.
The Beatles were an English rock band formed in Liverpool in 1960. With John Lennon, Paul McCartney, George Harrison and Ringo Starr, the band is considered the most successful rock band in history. They released 17 studio albums, six live albums, 54 compilation albums, 36 EPs and 63 singles, and have sold more than 600 million records worldwide. They have won an Academy Award, four Brit Awards, seven Grammy Awards, 15 Ivor Novello Awards and three World Music Awards. The Beatles are members of the Rock and Roll Hall of Fame (as a group and individually), the UK Music Hall of Fame and the Vocal Group Hall of Fame. They are members of the Grammy Hall of Fame and have a Grammy Lifetime Achievement Award. The bank members received MBEs from Queen Elizabeth in 1965. The Beatles officially broke up in 1970. All of the members went on to successful solo careers. John Lennon was killed in December 1980 and George Harrison died in November 2001. Paul McCartney and Ringo Starr still record and tour as solo artists.
