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State Poised for Power? California Has Chance to Muscle in on Clean Energy

Posted on: Saturday, 25 February 2006, 09:00 CST

By Matthew Bunk, BUSINESS WRITER

RICHMOND -- California is uniquely positioned to become a leader in a global clean energy economy that will be worth more than $200 billion by 2020, investment and technology experts said Friday.

By investing now in wind power, solar technology and fuel-cell vehicles, California could see an estimated

200,000 more jobs and a total payroll benefit of $8 billion by 2017, according to the nonprofit Climate Group.

But the state will have to move quickly to capture the high- paying jobs, technology resources and profits of a rapidly growing and changing energy market. The industry is poised for big changes as global oil production tapers off and demand for energy increases in developing countries.

As the energy race heats up, state leaders are prodding some influential investment fund managers to put more financial support behind emerging clean energy companies so California can stay a leader in the low-carbon economy.

State Treasurer and gubernatorial candidate Phil Angelides met with East Bay business leaders at an economic conference Friday in Richmond to tout his Green Wave Initiative, which two years ago called on the state's largest public investment funds to invest $1.5 billion in clean energy companies.

The half-day conference in Richmond highlighted what some environmental activists see as a changing business philosophy not only for the state -- but also for a city known as anfrom Business 1

industrial center with questionable air and water quality. Richmond is home to more than 350 facilities known to release toxic chemicals, including a Chevron oil refinery that processes 225,000 barrels of oil per day.

"There are a lot of contaminants in our air," said Sharon Fuller, executive director at Richmond's Ma'at Youth Academy for Environmental Leadership. "We can't keep attracting businesses strictly for the bottom line. We need to attract socially responsible companies that will have a positive impact on Richmond's future."

Politicians have used clean energy as a rallying point lately as gasoline prices remain high and continue to frustrate motorists. That's especially true in California, where voters are more likely to adopt environmentally friendly views and habits.

Angelides said he wants California to be a global center for the clean energy economy, just like it is for the high tech industry.

"If we are successful in becoming a world leader in clean fuel technology, not only can we clean up our environment and combat global warming, we can also create the high-paying jobs California needs," Angelides said. "Our only chance to make it in the new global economy is to grab the most high skilled jobs for the future. And as oil prices rise and air pollution gets worse, there will no doubt be more demand for clean energy technology."

Since 2004, CalPERS and CalSTRS, the state's largest pension funds and heavy investors, have already committed more than $1 billion to clean energy companies. About half of the money was invested in stock purchases of environmentally responsible public companies, with the other half committed as private equity investments.

William Chu, a CalPERS investment specialist, said its clean energy portfolio is still too young to generate any meaningful returns. He said getting any deeper into clean energy investing would be risky because "we're not yet certain what areas of this industry will generate the greatest return."

California is home to three globally competitive wind power companies, three of the world's largest geothermal fields, two of the largest solar companies and the premier consortium for fuel- cell vehicles. The clean energy industry provides 170,000 jobs in California, according to the Climate Group.

State energy regulators have set a goal of expanding the use of renewable energy to 20 percent of total consumption by 2017. Today, clean energy sources account for about 10 percent.

These things give California a head start in the race to become an economic hub for clean energy, said Graham Fleming, deputy director at Lawrence Berkeley National Laboratory, where past clean energy research has saved the United States an estimated $25 billion.

"Innovation and invention have always driven our economy," he said. "And now we have the duty to make sure this technology reaches the marketplace."

Business Writer Matthew Bunk can be reached at 510-208-6468 or mbunk@angnewspapers.com.

Source: Oakland Tribune

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