California, like South Australia, has rushed to adopt renewable power. Both have seen power tariff increases:
California companies are generating so much solar power that firms in other states are getting paid to take it.
The state has been forced into the arrangement to “avoid overloading its own power lines”, according to the Los Angeles Times.
The situation doesn’t necessarily mean we are “throwing money away”, says economist Severin Borenstein, a professor at UC Berkeley’s Haas School of Business.
“But it probably is an indication that there are some serious problems in the way we’re running the grid and the way we’re making investment decisions.”
The main problem:
Energy consumption is changing and the growth of renewable energy, especially solar, has left the market in turmoil. Some hope investments will lead to technology that stores energy more effectively. But in the meantime negative prices are one sign of the ways the market is changing.
“All these things started when there were very small amounts of renewables,” says Mr Bushnell of UC Davis. “The idea that we would have such a massive quantity that we would want to dump it, wasn’t really thought through.”