Policy Pathways for Building Decarbonization Pierre Delforge, pdelforge@nrdc.org, October 17, 2018
Electrification of buildings in context To minimize climate change impacts, we need to reduce GHG emissions by 80% by 2050 (below 1990) 80/50 Decarbonization Framework Energy Efficiency Decarbonize the grid Electrify vehicles and buildings Decarbonize remaining fuels 2
Why decarbonize heat in buildings? Buildings 40% of U.S. GHG emissions Need 95% building GHGs reduction from EIA baseline by 2050* 6,000 U.S. GHG Emissions NRDC Pathway to 2050 MMT CO2e Per Year 5,000 4,000 3,000 2,000 2,000 MMT CO2e/y 1,000 80 MMT 0 CO2e/y 2010 2020 2030 2040 2050 Transportation & Industry Buildings *NRDC, America s Clean Energy Frontier: The Pathway to a Safer Climate Future, Sept. 2017 3
Building emissions in CA CA 2016 Emissions, Demand-Side CA 2016 Building Emissions 160 148 Agriculture, 14% Transportation 31% Industrial, 30% Buildings 25% Electricity, 10% Direct emissions, 15% millions of tons CO2e 140 120 100 80 60 40 20 0 97 No out-of-state leaks 109 Out-of-state leaks -Out-of-state leaks - GWP100 GWP20 Buildings - electricity Buildings - on-site Demand-side view of building emissions, including: Direct onsite emissions Electricity generation emissions fugitive methane from extraction, distribution, use Source: Vukovich, Delforge, NRDC blog, The Real Climate Impact of California s Buildings, 9/18/2018 4
Gas fuels half of CA site energy use Space heating and DHW top two residential uses 5 Source: CA Energy Commission
Heat pumps 101 Extracts, concentrates, and moves (or pumps ) heat from surrounding air into tank or building Like a fridge or A/C in reverse 200% to 300% efficient! 6
Heat pump technology can electrify 90% of thermal energy use in homes Heat-pump clothes dryer Heat-pump water heater Heat pump space heating 7
Toward Zero Net Energy (ZNE/NZE) 2.0 Zero Annual Energy Zero Hourly Emissions (or Zero Emissions Buildings/ZEB) 2 key differences: 1. Energy Emissions 2. Annual Hourly Netting 8
Energy 1. Energy vs. emissions Emissions All-electric buildings have 30-40% lower GHGs, but 10-15% higher TDV* scores than mixed-fuel buildings GHGs TDV Source: E3, 2019 TDV Update, July 2016 * Time Dependent Valuation 9
Emissions: fuels matter! Electrification offers pathway to emissions-free heat as CA grid gets cleaner Carbon content of delivered heat (tco2/mmbtu) 0.12 0.10 0.08 0.06 0.04 0.02 Electric resistance (COP 0.96) Electric heat pump (COP 2.7) Gas, storage tank (COP 0.6) Gas, tankless condensing (COP 0.95) 0.00 0% 20% 40% 60% 80% 100% % Renewable electricity (long-run marginal) 1) Not including fugitive methane emissions, which may roughly double GHG emissions from gas 2) With 45%-efficient combined cycle gas plant as long-run marginal resource
Annual 2. Annual vs. Hourly netting Netting Solar Generation (kw) 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 June 2018 0 1 2 3 4 5 6 7 8 9 1011121314151617181920212223 Hour of Day 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0.0 CA Grid Emissions Intensity (kg CO2e/kWh) Solar generation Grid Emissions Intensity Must count emissions at the time they occur (hourly) The grid isn t an emissions bank (annual netting) Source: CPUC Avoided Cost Calculator 2018 11
How to account for emissions from electrification? System view: avoided emissions Emissions factors: average marginal Marginal accounting methodologies: Short-run ( dispatch ) marginal Long-run ( build ) marginal Behavior (small-scale impact) Policy (large-scale impact) Why it matters: From long-run marginal perspective, efficient and flexible electrification already beneficial in most/all U.S. regions, even in coal-dominated grids Will become more so as new generation becomes increasingly renewable Reference: Hawkes 2014, Long-run marginal CO2 emissions factors in national electricity systems 12
Getting building decarbonization right Electrification is key but not sufficient Building Decarbonization Energy Efficiency Use least energy Electrification From cleanest fuel Demand Flexibility At the right time 13
Energy efficiency remains essential 1. To avoid increasing grid system peak (and costs and emissions) Monthly energy use by electrification scenario 2. To deliver compelling customer bill savings Synapse: Decarbonization of Heating Energy Use in California Buildings, Oct. 2018 Potential Shift to Winter Peak Under High Electrification Scenario 14
And demand flexibility: soak up abundant low-carbon electricity off peak, without adding load on peak 15
Barriers: What s hindering adoption? Awareness/perception Heat what? Clean natural gas Cooking Access On-truck In-store Supply-chain Costs Equipment: capital cost Installation: circuit, panel Operation: compelling savings Technology Installation cost reduction Controls Cold temperature performance Regulatory CEC: Building code CPUC: Incentives, rates ARB: Scoping Plan 16
Economics of electrification It depends Already cost-effective in some situations, but not yet all Customer economics of electrification for retrofit of a single-family home Source: Decarbonization of Heating Energy Use in California Buildings, Oct. 2018 17
Improving the economics of electrification Mass adoption will require more compelling economics vs. gas Key levers: Equipment Sales volume Supply chain capacity Innovation Installation Sales volume Supply chain capacity Products easier to install, e.g. retrofit-ready Operation Better product performance Rate design Carbon pricing Load management Virtuous cycle on electric rates 18
Building decarbonization policy landscape 40% GHG reduction by 2030 SB 32 (2016) Electric sector: 60% RPS/2030 100% carbonfree / 2045 SB 100 (2018) Carbon neutrality by 2045 Gov. Exec Order (2018) 40% GHG reductions in buildings / 2030 $50M/y incentives for building decarb AB 3232 SB 1477 19
Strategies Raise awareness Set targets and plan Remove barriers Develop market State and City Policy 20
Policy roadmap Market Adoption 100% Innovators R&D Early products Pilots Case studies Awareness Early adopters Better product (specs, tst mtd) High incentives Remove barriers Education Availability Market transformation Building codes Appliance standards 0% Increase market share Reduce costs Incentives Marketing Rate design Fiscal policies Reach codes We are here 21 Time
Other building decarbonization strategies 2030 Incremental Carbon Abatement Cost Curve in High Electrification Scenario 22 Source: E3, Deep Decarbonization in a High Renewables Future, June 2018
Thank you! Contact info: Pierre Delforge pdelforge@nrdc.org