Renewable Energy in California Building Livable Communities: Creating Resilient and Sustainable Economies

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1 Renewable Energy in California Building Livable Communities: Creating Resilient and Sustainable Economies JR DeLaRosa and Randall Winston Office of Governor Edmund G. Brown, Jr. March 17, 2012

2 Governor Brown s Renewable Energy Goals - Building 12,000 MW of Localized Electricity Generation (DG) - Building 8,000 MW of Large Scale Renewables - Planning and Permitting New Necessary Transmission Within 3 Years - Dealing with Peak Energy Needs and Develop Energy Storage - Timeline to Make New Homes and Commercial Buildings Zero Net Energy - Making Existing Buildings More Efficient - Adopting Stronger Appliance Efficiency Standards - Increase Combined Heat and Power (COGEN) Production by 6,500 MW

3 California Progress towards 33% RPS Goal 20.00% 18.00% 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 19.30% 17.00% 15.90% 11.90% SCE PG&E SDG&E Total Source: Q2ReporttotheLegislatureFINAL.pdf

4 Where California stands compared to others Percentage of Energy from Renewable Sources 2009 Denmark 27.50% California 2010 Spain Germany 13.00% 16.00% 17.90% United Kingdom United States 3.50% 5.41% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00%

5 With Contracts Signed or Being Negotiated, We Will Meet 33% Before 2020

6 Renewables & Efficiency Create 3x -9x more jobs than Fossil Fuels Source: M Wei et al. / Energy Policy 38 (2010)

7 Costs of Solar Dropping Cost of solar panels have declined by 30% in the last two years & should continue to fall as production increases.

8 Some New Contracts Cheaper than Natural Gas Southern California Edison just announced contracts w/ Sunpower for 3 Solar PV projects in Merced, Kern and LA counties for 711 megawatts. All are cheaper than the cost of natural gas plants

9 Loading Order remains the same 1. Energy efficiency 2. Demand response 3. Distributed generation 4. Renewable generation 5. Cleanest available fossil resources Source:

10 How do we get to 12,000 MW? Governor Conference in July 2011 Explored opportunities for small local renewables Identified limitations and challenges of DG Discussed barriers to remove to achieve our goal

11 Benefits of local energy DG can enhance California s energy grid Reduce transmission congestion Increases reliability of energy delivery DG provides consumer benefits An added consumer option Stable renewable prices over time as fossil fuel spikes DG can provide jobs across California Distributes clean energy employment across communities.

12 Complex Regulatory Landscape Governor Legislature California Public Utilities Commission (CPUC) California Energy Commission (CEC) California Independent System Operator (CaISO) Local Planning Departments Local Building Departments Local Fire Officials

13 Non-Regulatory Stakeholders Investor Owned Utilities (IOUs) Publicly Owned Utilities (POUs) Renewable Energy Industry Financers Project Developers (of many sizes and stripes) Installers Ratepayer Advocate Consumer Groups NGOs (Social Justice, Environmental)

14 Key Challenges to DG Deployment Grid Planning and Integration Interconnection Financing Permitting and Zoning Also need: Realistic cost and benefit information Procurement programs to drive DG demand Path to unleash renewables on public buildings Support for commercial growth of emerging renewable energy technologies

15 Distributed Generation Roadmap: Key Questions What renewable energy projects count toward the Governor s goal? How much DG is already operating, pending or authorized? How do we reach the rest of the 2,000 MW goal? How do we make expansion local renewable energy more efficient, effective and equitable?

16 What is Distributed Generation? Our definition: Fuels and technologies accepted as renewable for purposes of Renewable Portfolio Standard Sized up to 20 MW Located within low-voltage distribution grid or supply power directly to consumer

17 Operational, Pending or Authorized Wholesale Self-Generation Total Total Online, Pending, and Capacity Authorized: 4, MW Total Online, Pending, and Capacity Authorized: 3,000MW 7,998.52MW 12,000MW Goal 7,998.52MW Current total 4,001.48MW remaining

18 Challenge 1: Grid Planning and Integration Goal: Transform brittle, outdated grid to nimble, flexible and reliant grid. Need: Thorough analysis of where DG can be added to distribution grids. What grid upgrades are needed? How to build grid flexibility (Energy storage, Demand Response)

19 Challenge 2: Interconnection Process Goal: Clear, efficient process to connect projects. Need: Transparent utility process with clear timeframes. Coordination with utilities procurement. Interconnection queue that includes realistic projects. Education and interaction.

20 Challenge 3: Financing Goal: Help catalyze robust investment in all sizes of DG. Need: #1: Continuity and certainty within procurement programs and regulations. Support (expand?) promising financing programs on-bill repayment commercial PACE programs Innovative customer side financing Resolve barrier to residential PACE

21 Challenge 4: Approval Process Goal: Help facilitate efficient development of renewables across California. Need: Updated state codes for solar PV Help local governments streamlining and standardize approval process Maps and Zoning? Clarity and consistency.

22 Need #1: Optimize Procurement Programs for DG Goal: Drive demand for small scale renewable energy development. Need: Effective execution of new(ish) programs (i.e. RAM, new FIT) Consistency in programs that have demonstrated success: (i.e. Net-metering) Carve out space for emerging renewables. Consider new programs to capture certain benefits.

23 Adaptive Program to reach 12,000 MW Implement and track existing programs: 1. Which add reliability and/or avoid transmission? 2. Which are most effective in cost containment? 3. Which produce the most generation most quickly? 4. Which are administratively efficient? 5. Which support other state policies (RPS, DR?) 6. Which maintain diversity of resources? 7. Which support jobs and economic development? Develop and expand on programs that fit goals.