1 Powering California Forward CPUC Thought Leaders Series Fong Wan Senior Vice President, Energy Procurement Pacific Gas and Electric Company
Source of Presentation California, Name of Presentation Outlier or Leader? 2 Renewables Standard Greenhouse Gas Cap Electric Car Mandate Energy Efficiency Decoupling Smart Grid Solar Rooftops Nuclear Highest in US, 33% by 2020 1990 levels by 2020 15% of sales by 2025 Gets first priority in resource planning Utility profits not tied to sales volume One of the earliest & largest adopters of AMI Goal set for 1 million by 2016 New plants prohibited by state law
Pounds of CO2 per MWh Source of Presentation PG&E: Name of Presentation Delivering Clean Energy 3 1,400 1,200 1,216 CO 2 Emissions for Delivered Electricity 1,000 800 600 400 659 445 200 0 U.S. Average CA Average PG&E Source: U.S. and CA averages, U.S. Environmental Protection Agency. Source: The Climate Registry, a third party verification of greenhouse gas emissions data.
Energy Efficiency: Ingrained in the PG&E Culture 4 Legislation enacted in 1974 to reduce wasteful, inefficient consumption of energy. Decoupling of natural gas sales in 1978; electric sales in 1982 Shareholder incentive adopted in 1993 Significant growth in funding for energy efficiency programs
PG&E Smart Grid Investments 5 Engaged Consumers Smart Markets Smart Utility Online Information Customer Energy Management Outage and Load Management Substation B Substation A 6 1 2 3 5 Outage Home Energy Reports Automated Demand Response Advanced Automation 4 PG&E is using Smart Grid technologies to provide customers with benefits today
PG&E is a Leader in Retail Solar PV 6 One-fourth of customer solar installations in the U.S. are in PG&E's service territory PG&E All Other U.S. Utilities Combined Source: Annual survey by the Solar Electric Power Association for 2012 (2013 results available June 2014).
Customer PV has Grown Significantly 7
California Utility Scale Renewables Source of Presentation 8 Name of Presentation Increasing Dramatically, CPUC RPS report to the legislature, Q4 2013 11. Figure is not risk-adjusted and forecast does not assume re-contracting of contracts whose terms expire prior to 2020. 12. Data Source: 2003-2010 data from the Provisional 20% RPS Closing Report (1/13/14); 2011-2020 data from the 2012 RPS Compliance Reports (8/1/13).
California is Rich in Renewable Source of Presentation Name of Presentation Resources 9 Solar Wind Biomass Geothermal Source:
Renewable generation is no longer a technical challenge, but an economic and operational challenge 10
PG&E s Portfolio Costs are Rising 11 $ 000 s $5,500 $5,000 $4,500 Energy Crisis Costs (DWR) Procurement Costs (ERRA) Citygate Gas Price $/MMbtu $10 $9 $8 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 ($500) $7 $6 $5 $4 $3 $2 $1 $0
( /kwh) PG&E s Electric Rate History 12 60 Tier 5 (> 301% of Baseline) 50 40 Tier 4 (201-300% of Baseline) Tier 3 (131-200% of Baseline) Tier 2 (101-130% of Baseline) Baseline (Tier 1) Average Residential Rate Rate Revolt in Kern County 42.5 49.8 Summer Rate Relief GRC Ph. 2 rates implemented 6/20/2011 36.0 30 Energy Crisis 28.6 32.0 20 Average Residential Rate 16.7 22.3 10 13.5 11.9 15.5 13.6 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Data as of May 1, 2014
Beyond 33% RPS, Integration is Increasingly Challenging and Costly PG&E and other large California utilities studied challenges and solutions to implementing a higher RPS Over-generation emerges as a problem above 33% Grid cannot absorb all energy generated Over-generation is very high on some days Flexible fossil generation helps mitigate daily swings Without additional solutions, grid operator must curtail solar to maintain reliability Example Day in April under 33%, 40% and 50% RPS 13 Source: Energy + Environmental Economics
What Does the Future Hold? 14 More renewables? More demand response? More storage? More EVs? More energy efficiency? Will electricity replace natural gas usage?
Achieving CA s 2050 GHG Goal 15 Source: Energy + Environmental Economics
Integration Solutions Will Be Critical to Success 16 Increased regional coordination Make best use of latent flexibility in current system Renewable resource diversity Reduces over-generation and need for flexible resources Flexible loads Shifting loads from one time period to another, sometimes on short notice Flexible generation Need generation that is fast ramping, starts quickly, and has minimum generation flexibility Energy storage Deep-draw (diurnal) storage is important