by Aiden Olsen (’24) | February 2, 2024
Silicon Valley is renowned for its nonstop technological innovations; however, there are also currently many efforts in the valley to promote clean energy. Silicon Valley Clean Energy (SVCE) is spearheading this effort by providing less expensive carbon-free energy to the majority of Santa Clara communities. But what exactly is SVCE?
In 2017, SVCE was created as a community choice aggregation, an organization that enables communities to pool their electricity load for environmental benefits. Employing geothermal, solar, and hydroelectric energy, the program provides 100% renewable energy to consumers at 4% cheaper than the cost of PG&E. While still using the infrastructure and delivery process of PG&E, SVCE covers 96.5% of members (270,000 people) in cities Sunnyvale, Campbell, Cupertino, Gilroy, Morgan Hill, Los Altos, Los Gatos, Milpitas, Mountain View, and Saratoga. “We can’t take customers away from PG&E unless people want to opt-out,” explained Rob Rennie, one of the founding board members of SVCE.
SVCE was the first program in California to be 100% percent renewable and cheaper than PG&E. This accomplishment comes with an enormous financial cost. To deal with such financial issues, SVCE needs to cut costs in other aspects of energy distribution. “[PG&E] has shareholders to pay and they possibly have more overhead. Our hedging strategy is better,” emphasized Rennie. Hedging is a process where energy prices are locked in ahead of time so that if the price of PG&E energy goes up, SVCE wins by having previous purchasing rights of the lower price.
However, hedging does not always work in their favor. When the price of PG&E electricity decreases, SVCE is forced to pay at the higher locked-in price. “A couple of years ago we lost money when we took money out of our reserves to keep our price below PG&E,” said Rennie. Other expenses can also include storing solar energy, considering the program predominantly uses solar panels. “We got to the point in some parts of the year, where there is so much solar in the middle of the day that we have to export to Arizona because we have too much power,” noted Rennie.
Beyond electricity, SVCE differentiates itself from other community choice aggregation programs by covering all steps of going carbon neutral through various decarbonization programs and investments in the sustainability sector. For example, it provides rebates to people who change their HVAC systems, gas heaters, and water heaters to electric. SVCE also invested in a company that harvests thermal energy from an electric heat pump, provides heat to homes, and gives money to put electric backup generators in Los Altos libraries.
Amidst the variety of challenges SVCE faces, the organization continues to expand. Many communities are announcing plans to create their own community choice aggregation programs to make renewable energy more affordable. Ultimately, Silicon Valley Clean Energy is trailblazing a sustainable future in the Bay Area and globally.
