California Electricity Sector GHG Planning: Making early investments in CCS to lower the long-term cost of achieving a GHG reduction target

Transcription

1 California Electricity Sector GHG Planning: Making early investments in CCS to lower the long-term cost of achieving a GHG reduction target 32 nd IAEE Conference, San Francisco, CA June 24, 2009 William Morrow, Senior Consultant Energy and Environmental Economics, Inc. 101 Montgomery Street, Suite 1600 San Francisco, CA (415)

2 Agenda Greenhouse gas reduction polices 2020 versus 2050 GHG goals How 2050 greenhouse gas reduction policies could effect California s electricity sector Key electricity sector challenges Low-CO 2 emissions electricity generation options Conclusions 2

3 California s Long-Term GHG Goals Executive Order S-3-05 reduce statewide emissions: 1990 levels by % below 1990 levels by 2050 Assembly Bill 32 codifies 2020 goal into law Proposed federal energy legislation (Waxman-Markey) contains similar goals: 17% below 2005 levels by % below 2005 levels by

4 California Long-Term GHG Goals MMt CO2e AB 32 Goal Transportation - Elec Residential - Elec Commercial - Elec Industrial, Ag., Petro. - Elec Other Transportation - Fuel Freight trucks - Fuel LDV - Fuel Non-CO2 GHGs Industrial, Ag., Petro - Fuel Commercial - Fuel Residential - Fuel Target Baseline 4 Year

5 How 2050 GHG reduction targets could effect CA s electricity sector 5

6 Electricity Demand (AB 32 goal) 600,000 Electric Demand at the Generator (GWh) 500, , , , ,000 Transportation Petroleum & Agriculture Industrial Commercial Residential Baseline Year

7 Electricity Demand (2050 Compliant Case) 600,000 Electric Demand at the Generator (GWh) 500, , , , ,000 Transportation Petroleum & Agriculture Industrial Commercial Residential Baseline Year

8 Electricity Sector CO 2 Savings (2050 Compliant Case) MMt CO Electricity (Transportation) Electricity (Non- Transport Sum) Baseline Year

9 Key Electricity Sector Challenge: Maintain Reliability While Drastically reducing CO 2 emissions AND Satisfying load growth & changing load type Reduced traditional demand (Res., Com., Ind.) Increased transportation sector demand (e.g., plug-in hybrid electric cars (PHEV)) PHEV have an uncertain demand shape 9

10 Low CO 2 Emission Electricity Generation Options Nuclear, Renewables and CCS are the most promising low CO 2 resource options but each has barriers to large-scale development. Flattening the load duration curve allows for a larger penetration of base-load generation capacity. Mid-merit and peaking technology with low-carbon emissions will likely be required to balance loads and renewable intermittency regardless. 10

11 2008 Load Duration Curve (10) Storage Discharge Natural Gas CT Renewables Gas CCS CCGT Imports 730 1,460 2,190 2,920 3,650 4,380 5,110 5,840 6,570 7,300 8,030 8,760 Average MW (1,000) Storage Charge Non- Dispatchable Spilled Energy Exports 11 Hours (annual)

12 2050 Load Duration Curve (AB 32 Case) Average MW (1,000) (10) Storage Discharge Natural Gas CT Renewables Gas CCS CCGT Imports Storage Charge Non- Dispatchable Spilled Energy 730 1,460 2,190 2,920 3,650 4,380 5,110 5,840 6,570 7,300 8,030 8,760 Exports 12 Hours (annual)

13 Demand Load Shapes Summer Average Load Shape Winter Average Load Shape 90,000 90,000 80,000 70,000 80,000 70,000 Transportation Average MW 60,000 50,000 40,000 30,000 20,000 10,000 60,000 50,000 40,000 30,000 20,000 10,000 Agriculture Petroleum Industrial Commercial Residential AB 32 Case ,000 90,000 80,000 70,000 80,000 70,000 Transportation Average MW 60,000 50,000 40,000 30,000 20,000 10,000 60,000 50,000 40,000 30,000 20,000 10,000 Agriculture Petroleum Industrial Commercial Residential Compliant Case Hour (daily) Hour (daily)

14 2050 Load Duration Curve (Compliant Case) (10) 730 1,460 2,190 2,920 3,650 4,380 5,110 5,840 6,570 7,300 8,030 8,760 Average MW (1,000) 14 Hours (annual)

15 Generation Mix (GW) Nameplate Capacity (GW) Gas (CT) Storage (4 hr) Renewables - Wind Renewables - Solar Renewables - Geothermal Renewables - Biomass Renewables - Hydro Fossil w/ CCS Gas (NGCC) Coal Nuclear 15

16 Conclusions California is already providing leadership in energy and climate change action. Meeting 2050 GHG goals means CA s electricity sector must 1. Absorbs transportation energy demand 2. Drastically reduce CO 2 emissions Having a diverse mix of demand side and generation options increases the chance of meeting the 2050 goals. A low-carbon mid-merit generation resource such as NG with CCS or large-scale storage will likely be needed to meet the 2050 goals. Early investment to develop technologies such as CCS and energy can provide additional leadership in energy and climate change action. 16

17 Thank you

18 Project Background E3 is an electricity consulting firm founded in 1993 in San Francisco Clients span local, state and federal government, small and large public and investor-owned electric utilities, and energy technology companies E3 developed a spreadsheet-based, stock roll-over investment model of California s energy use and GHG emissions through 2050 Focus of analysis is on infrastructure required to meet GHG reduction goals and electricity sector implications not a cost-driven model Purpose is to help fill the research gap in long-term CO2 reduction requirements to meet policy goals 18

19 Model Approach 1. Define Baseline Energy Consumption by Sector and GHG Emissions Forecast 2. Define Emission Reduction Measures Fleet-roll over model simulates reduction in energy consumption based on measures 3. Simulate Generator Dispatch and Grid Operability Forecast load shape Generation Mix Dispatch Generation: * Changes based on measures * Renewables * Balance Energy & Capacity * Nuclear, CCS, etc. * Meet Regulation Needs 4. Calculate Final GHG Emissions & Cost Cost defined as measure cost, cost of electricity, cost of fuel