The Long Game: Energy Efficiency in a Low-Carbon World

Transcription

1 The Long Game: Energy Efficiency in a Low-Carbon World ACEEE 2014 National Symposium on Market Transformation Utility Portfolio Planning: How to Make Sure the Need for Near-Term Savings Doesn't Kill the Long Game March Baltimore, MD Amber Mahone Senior Consultant

2 Agenda What can we learn about the long-game in EE from Backcasting? Example from California 2050 greenhouse gas study Implications for EE portfolio planning 2

3 What is the long-game in energy efficiency? Premise: Climate policy and energy efficiency are converging in California; EE is an important climate mitigation strategy UC Davis West Village project faculty, staff & student housing intended to be zero-net energy PHOTOGRAPH BY JAMES BALOG, NATIONAL GEOGRAPHIC, the receding Bridge Glacier 3

4 Forecasting vs. Backcasting Forecasting drives nearterm savings goals Based on current market conditions, what EE measures are forecasted to be most cost-effective? CFLs! Backcasting can help set long-term savings goals What EE measures are needed in order to achieve our long-term goals? Shell measures, commissioning, controls, customer behavior, contractor experience & knowledge, low-carbon fuels

5 Backcasting example: 80% reduction in GHGs by 2050 in California Source: The Technology Path to Deep Greenhouse Gas Emissions Cuts by 2050: The Pivotal Role of Electricity, Williams et al, Science (2012) 5

6 Three key energy system transformations needed by 2050 Source: The Technology Path to Deep Greenhouse Gas Emissions Cuts by 2050: The Pivotal Role of Electricity, Williams et al, Science (2012) 6

7 Energy efficiency avoids significant infrastructure Source: The Technology Path to Deep Greenhouse Gas Emissions Cuts by 2050: The Pivotal Role of Electricity, Williams et al, Science (2012) 7

8 GWh Deep GHG reduction requires increase in electrification California 2050 example Energy Efficiency PV Roofs Electrification Electric Demand 2050 Baseline Electric Demand Building EE Industrial Ag & Other EE PV Roofs 2050 Electric Demand net of EE/PV Building Elect. Industrial Ag & Other Elect. Transport EVs 2050 Decarb. Eelctric Demand Source: The Technology Path to Deep Greenhouse Gas Emissions Cuts by 2050: The Pivotal Role of Electricity, Williams et al, Science (2012) 8

9 How to reflect long-term GHG goals in energy efficiency planning? Challenge: EE cost-effectiveness is largely based on avoided cost of fossil generation Coal & natural gas are cheap On-site use of gas in buildings is more efficient than electricity, but can be higher carbon A partial solution: Cost of carbon emissions Market price of carbon is reflected in California s Total Resource Cost (TRC) due to cap and trade. Also, higher cost of procurement for renewables portfolio standard A Societal Cost Test (SCT) perspective would take into account the Social Cost of Carbon (SCC) i.e. carbon cost that reflects damage to society from climate change, or the cost of long-term carbon mitigation strategies. Challenge is that these metrics are all highly uncertain, different assumptions lead to widely different carbon prices 9

10 Conclusions & Implications Working backwards from a long-term greenhouse gas reduction goal to prioritize EE portfolio helps: Recognize path-dependence in resource acquisition choices Identify long lead times needed to implement measures: Recognize need to reduce fossil fuel use in buildings either with low-carbon gas sources (biogas, hydrogen, etc.) or low-carbon electricity If carbon reductions are the primary goal, then the cost-effectiveness of efficiency can be calculated relative to other carbon-reduction options, not relative to fossil fuel energy This is only a partial solution however; cost-effectiveness is only one of the barriers to long-term EE savings in portfolios 10

11 Thank You! Amber Mahone Energy and Environmental Economics, Inc. (E3) 101 Montgomery Street, Suite 1600 San Francisco, CA Tel Web

12 Decarbonization Cost Range Could Vary Widely in the Future HIGH LONG-TERM COST Serious grid stability and balancing needs No technological leaps Significant but not revolutionary cost declines in existing technologies Low natural gas prices LOW LONG-TERM COST Major technological advances Significant and sustained cost declines in existing technologies High natural gas prices 12

13 Climate Change Damage Cost Sensitivity A recent study (Ackerman and Stanton, 2012) shows SCC results can vary widely, even using the same model (DICE) and many of the same assumptions 13

14 $/tonne SCC Approach 1: Potential Value Ranges $2,000 $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $ % Discount Rate-Low 3% Discount Rate-High 1.5% Discount Rate-Low 1.5% Discount Rate-High Chart derived from (Ackerman and Stanton, 2012) 14

15 Benefits of Electrification Today Vary by Region UCS report: The mpg value is the fuel economy rating of a gasoline vehicle that would have global warming emissions equivalent to an electric vehicle in each region (based on the 2009 average power plant emissions rate in the EPA s egrid 2012 database) UCS, State of Charge,