CLIMATE CHANGE REGULATION IN CALIFORNIA NCSL Summer Energy Outlook Conference 4-22-08 Denver, CO
OUTLINE The GhG Issue California Policy Landscape Utility/SMUD Reduction Options Carbon Sequestration & Offsets Energy Efficiency RD&D Renewables
THE GHG ISSUE Citizens Believe Global Warming is Happening & Will Get Worse in Future Numerous Scientific Studies, IPCC Reports Federal Legislation Developing Other States Taking Action, e.g., RGGI Many California Scientific & Policy Reports
THE GHG ISSUE Emissions Scenarios (End of century Atmospheric C0 2 Concentration) Higher Emissions A1fi (970 ppm) Medium-High Emissions A2 (830 ppm) Lower Emissions B1 (550 ppm) 90% loss in Sierra snow pack 55-75 cm (22-30 inches) of Sea level rise 3-4 times as many heatwave days in major urban centers 2 2.5 times the number critically dry years 3 20 % increase in electricity demand 4-10 times as many heat-related deaths projected for some urban centers 4 Increase in Forest yields not evaluated for this scenario 5 Increase in Fire risk not evaluated for this scenario 5 Increase in days meteorologically conducive to ozone formation 5 70-80 % loss in Sierra snow pack 35-55 cm (14-22 inches) of Sea level rise 1-2 times as many heatwave days in major urban centers 2.5-5.5 times as many heat-related deaths projected for some urban centers 4 75-85% increase in days meteorologically conducive to ozone 6 2-2.5 times the number critically dry years 3 11% increase in electricity demand 30% decrease in forest yields (Pine) 55% increase in the expected risk of large fires 30-60 % loss in Sierra snow pack 15-35 cm (6-14 inches) of Sea level rise 2-2.5 times as many heatwave days in major urban centers 2-4 times as many heat-related deaths projected for some urban centers 4 25-35% increase in days meteorologically conducive to ozone formation 6 Upto 1-1.5 times the number critically dry years 3 3-6 % increase in electricity demand 7-14% decrease in forest yields (Pine) 10-35% increase in the risk of large fires Statewide Temperature Rise (ºC) 2070-2099 4.4 5.8 ºC (8-10.4 ºF) 3.1-4.4 ºC (5.5-7.9 ºF) 1.7-3.0 ºC (3.0-5.4 ºF) Increased Temperatures Reduction in Snowpack Worsened Air Quality Increased Risk of Flooding Source: California EPA Climate Action Team Report, Figure 4-9, 2006
THE GHG ISSUE Electricity 12% Residential 7.6% Commercial 3.4% Electricity 28.5% Residential 14.6% Industry 20% Commercial 12.7% Transportation 57% Transportation 24.2% Industry 20% California (left) and US (right) CO2 Emissions in 2006 Source: DOE EIA 2006 Data
2,500 2,000 1,500 1,000 500 0 THE GHG ISSUE Average CO2 Emissions Rates for Various Technologies Cosumnes SMUD Cogens Gas Peaker Oil Fired Combined Cycle IGCC w/o sequestration Conventional Coal Gas Combined Cycle SMUD y2005 Generation Avg lbs CO2/MWh
GHG 2020 & 2050 GOALS 80% Reduction below state s 1990 levels (2050) Based on Climate Change Science 1600 Comparison of Emissions Output Rates Emissions Rate (lbsco2/mwh) 1400 1200 1000 800 600 400 200 0 US 2004 Avg Emis Rate 2004 CA Avg Emis Rate SMUD Fossil Emis Rate SMUD Total Emis Rate Expected Target 2020 CA Rate Expected Target 2050 CA Rate
CALIFORNIA POLICY Governor s Executive Order (2005) 1990 Levels by 2020; 80% below 1990 by 2050 SB 1368 - CO2 Limit for Utility Investments in Baseload PPs (2006) SB 1078 & SB 107 Renewables Portfolio Standard (RPS) (2006) AB 2021 Energy Efficiency Standard (2006)
CALIFORNIA POLICY AB 32 (2006) 1990 Levels by 2020 (29% less than BAU) California Air Resources Board = Lead Agency Direct Regulations - - Multi Sector Market-based Cap and Trade CEC&CPUC Recommendations- Utility Sector CARB Adoption: 2008 = Scoping Plan; 2011 = Comprehensive GhG Regs; 2012 = Enforceable
REDUCTION OPTIONS Carbon Sequestration Permanent Storage in Spent Gas/Oil Wells, EOR, Deep Saline Aquifers, Deep Ocean Performance? Cost? Offsets Preserve a Forest & Get Credit for Emissions What will be Eligible & How Much Credit???
ENERGY EFFICIENCY SMUD s Board adopted most aggressive energy efficiency goals in CA 15% over ten years 10-YEAR ENERGY EFFICIENCY TARGETS ADPOTED BY THE SMUD BOARD OF DIRECTORS 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total 10-Yr Avg GWh 70 107 145 196 200 205 209 213 217 222 226 1940 194 MW 18 28 40 58 59 60 62 63 64 66 67 568 57 Budget ($millions) $ 25 $ 34 $ 40 $ 45 $ 45 $ 46 $ 46 $ 47 $ 48 $ 49 $ 50 $ 450 $ 45 The 10-year goals (2008-2017) were adopted by the SMUD Board of Directors on May 17,2007
ENERGY EFFICIENCY SMUD Residential Programs - Residential Services - Equipment Efficiency - Appliance Efficiency - Solar DHW - Shade Trees - New Construction - - Energy Star Lighting, Pool & Spa Efficiency
ENERGY EFICIENCY SMUD Commercial/Industrial New Construction (Savings By Design) Retrofit Programs Lighting and HVAC rebates Small C/I HVAC Tune-Up Retrocommissioning Building Operator Certification Process/industrial rebates
ENERGY EFFICIENCY SMUD Energy Efficiency Loans Program Averages $25-30 million in loans per year 4000-5000 loans/yr 99% residential $42 million portfolio 7 ½% interest rate Terms up to 10 years Program has operated for 28 years $389 million over life of program 127,500 loans
ENERGY EFFICIENCY SMUD LOCAL GOVT. PROGRAM - 7 local governments: 6 cities & County of Sacramento Incorporate energy efficiency in general plans and developer agreements Eliminate permit fees for retrofit photovoltaic installations, Streamline application process, over the counter review, & final inspection in 24 hours Started the Build It Green Public Agency Council with local city managers, building officials, planning directors
ENERGY EFFICIENCY CHP - SMUD JPAs Owns 3 Large Cogen Plants DG Cooling Heating & Power Current Program Fuel Cell Energy 300 kw MCFC Define Market, Feasibility Studies, Own/Operate or Provide Incentives? -Railyards, Blue Diamond, Airport -Terminal B Rebuild, Others Capstone 30 kw Microturbine
8,964 homes 1,000 hotel rooms 1,370,000 ft 2 retail 1.478,000 ft 2 office 416,690 ft 2 Historical
EFFICIENCY RD&D Emerging Technologies Focus Demand Side
Supply Side SUPPLY SIDE RD&D
RD&D - LANDFILLS Problems 10-40% of methane produced at a landfill (with collection) is lost Smaller landfills are not required to collect gas and release all their gas to atmosphere Opportunities Controlled bioreactor landfills capture 95% of methane New landfills are difficult to site - diverting organic wastes from landfills can extend their life
Relative Generation Rate RD&D - BIOGAS PRODUCTION 10 9 8 Anaerobic Bioreactor Landfill 7 6 5 4 3 Conventional Landfill 2 1 Time (Years) 0 0 5 10 15 20 25 30
RENEWABLE ENERGY Green Pricing Program (97) called Greenergy RPS (2001) Renewable Energy Programs 2007 Supply Goal 2007 Actual Supply* (Estimate) 2011 Supply Goal RPS 12% 14.6% 20% Greenergy 2.2% 2.2% 3% Total 14.2% 16.8% 23% * Accounts for sales of surplus RECs in 2007. The final percentage could be lower due to sale of addtitional RECs.
SMUD's RENEWABLE ENERGY MIX 2007 TOTAL BIOMASS 45% TOTAL WIND 27% TOTAL PV < 1% TOTAL SMALL HYDRO 6% TOTAL GEOTHERMAL 22%
3500 Renew ables Demand Reduction due to Board EE Target ENERGY NEEDED TO MEET GOAL (w ith Board EE Target) SB-1 Estimated Solar Energy to be Added to SMUD's RPS Solano Wind 3 (128 MW @ 35% CF = 392 GWh) EXISTING RENEWABLES Goal (w ith Board EE Target) Goal (w ithout Board EE Target) SMUD's Renewable Energy Supply (As of March 18, 2008) 3000 2500 2000 1500 1000 1419 1735 2445 2239 2019 1910 1800 1800 1735 500 618 Renewable Energy (GWh) 874 552 487 487 487 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Year
RENEWABLES PV FLAT PLATE
RENEWABLE ENERGY SMUD Solar Program 25 yrs = 11 MW; 125 MW Goal Next 10 yrs. New Homes = Solar Smart Builders include: Lennar Homes, Tim Lewis Communities, Homes by Towne, Centex Homes, DR Horton and Standard Pacific Homes. Combines energy efficiency with integrated PV Over 4,000 homes either approved or in the approval process
RENEWABLE ENERGY
SMUD RENEWABLES SMUD-Owned Solano Wind Project
RENEWABLE ENERGY Solano 102 MW Build-Out Completed Land Purchase = another 128 MW by 2011 Preparing for Future Growth Wind Integration Study How much intermittency for a small control area? Operating impacts? Balancing generation costs? Evaluating New Wind Sites & Transmission
RENEWABLE ENERGY
RENEWABLE ENERGY SMUD Local Problem Wastes to Green Electricity Board Emphasizes Local Environmental Benefits Over Global Benefits SMUD Renewables in Service Territory = Solar and Biomass How Does Society Currently Dispose of Wastes? Can Local Problem Wastes be Converted to Electricity & Mitigate Problem? YES!!!
TARGETED LOCAL WASTES/PROBLEMS GhG Local AQ Water Qual. Odor Ot her Dairy Waste Grease Waste Food Waste Landfills Fuel-Loaded Forests
RENEWABLES ANAEROBIC DIGEST. RCM Covered Lagoon W. Sac. WWTP Dranco - OWS
RENEWABLES - DIGESTERS 2 Dairy Digesters in S. Sac in Next Year USDA, CEC, SMUD Providing Incentives Net Metered 1 Lagoon; 1 Complete Mix Digester Regulatory Issues
RENEWABLES - DIGESTERS Dairy Environmental Benefits Location of Dairy Number of Animals *Total VOC Reduction (Lbs/Year) **Methane Reduction (Tons/Year) CO2 Equivalent (Ton/Year) Elk Grove Galt #1 Galt #2 TOTAL 1,435 8,565 534 11,738 1,100 6,426 172 3,776 1,020 6,075 204 4,489 3,555 21,066 910 20,003 *Based on SMAQMD Title V Emissions estimate; VOC reduction from the dairy planning addition of food waste, is based on manure only. **Assuming the biogas produced contains 60% methane
RENEWABLES-GREASE WASTE Sac Regional Wastewater Plant Benefits of approach Existing excess capacity Technically proven with grease and food waste Existing permits Existing trained personnel Existing use for biogas at Carson Energy cogen Project status SMUD sponsored feasibility study in progress
RENEWABLES - GREASE WASTE Avg. Daily Gas Production 400,000 350,000 Cubic Feet of Gas 300,000 250,000 200,000 150,000 100,000 50,000 Dig#1 Dig#2 - Mar 06 Apr 06 May 06 June 06 July 06 Month/yr City of Riverside Grease to Digester Tests
RENEWABLES-FOOD WASTE S.F. Food Collection Program SMUD/UCD Survey Leftovers to Lights Add to Sac RWTP Distributed Digesters Tollenaar Dairy Folsom Prison Demo