April 17, 2010

California: A Leader in Energy Efficiency

Robert Marcial, PG&E Pacific Energy Center

BioForum – Adapting to Climate ChangeApril 17, 2010

World and Energy Statistics

Which countries have highest percentage of population?

• China (20%)

• India (18%)

• United States (5%)

• Indonesia (3%)

• Brazil (3%)

World and Energy Statistics

Which countries have highest primary fuel consumption?

• United States (22%)

• China (14%)

• Russia (7%)

• Japan (5%)

• India (4%)

World and Energy Statistics

Which are the leading energy sources by type consumed in U.S. for all end uses?

• Petroleum (39%)

• Natural Gas (24%)

• Coal (23%)

• Nuclear (8%)

• Biofuels (4%)

• Hydroelectric (2%)

World and Energy Statistics

Which are the top end uses for primary fuel energy in U.S. buildings (Comm & Res)?

• Space Heating (25%)

• Lighting (14%)

• Water Heating (12%)

• Space Cooling (11%)

• Refrigeration (6%)

• Electronics (5%)

World and Energy Statistics

How is energy used in the U.S. by sectors?

• Industry

• Transportation

• Residential

• Commercial

(35%)

(27%)

(21%)

(17%)

Buildings and People

35%

17%

21%

27%

48%25%

27%

Buildings and People

California Energy Leadership

Legacy of energy innovation

• Decoupling

• Loading order

• Energy efficiency

• Demand response

Progressive state energy policy

• California Long Term Strategic Plan

• Go Solar California

• Renewable Portfolio Standard (RPS)

California Energy Leadership

ArthurRosenfeld

California Energy Leadership

An 18 cubic foot refrigerator consumed approximately 2,000 kWh/yr in 1970. How much does a high-quality refrigerator of similar size consume today?

• ~1,000 kWh/yr• ~ 500 kWh/yr• ~ 400 kWh/yr• ~ 250 kWh/yr

An 18 cubic foot refrigerator consumed approximately 2,000 kWh/yr in 1970. How much does a high-quality refrigerator of similar size consume today?

• ~1,000 kWh/yr• ~ 500 kWh/yr• ~ 400 kWh/yr• ~ 250 kWh/yr

California Energy Leadership

1970 1993 2001 2009

2,000 kWh

700 kWh

490 kWh390 kWh

Ener

gy U

sage

per

yea

r

18 ft3 (0.51 m3) frost-free refrigerator

Courtesy Art Rosenfeld, California Energy CommissionNote: 2005 – 2008 are forecast data.

30+ Years of Energy Efficiency Success

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

1960 1965 1970 1975 1980 1985 1990 1995 2000

KW

h

US CA Western Europe

Energy EfficiencyFirst resource in our energy mix

Electricity Sales in California

0

100

200

300

400

500

1970 2006

Elec

tric

ty S

ales

(TW

h/y

ear)

Energy Savings

165 TWh/ y

Additional

Generation

108 TWh/ y

About PG&E and Our BusinessWhat we do:• Deliver safe, reliable, and environmentally responsible gas

and electricity to approximately 15 million Californians

Electric and gas distribution customers

5.1 MM electric 4.3 MM gas

Electric transmission and distribution lines

159,863 circuit miles

Natural gas transmission and distribution pipelines

48,580 circuit miles

Electric generation capacity

6,800 MW

PG&E’s 2008 Electric Power Mix

U.S. Average (1) 1,329

California’s Average 724

2008 641

2007 636

2006 456

2005 489

2004 566

2003 620

PG&E (2)

Greenhouse Gas Emissions (pounds of CO2 per MWh)

(1) Source: U.S. EPA eGRID 2007 Version 1.1 (updated Dec. 2008 and based on 2005 data).

(2) PG&E’s emissions rates for delivered electricity were independently verified and registered with the California Climate Action Registry. Given that a portion of the electricity that PG&E delivers comes from unspecified generation sources, the company’s total emissions, and associated emissions rates, may vary from registered figures.

CO2 emission per capita

0.0

5.0

10.0

15.0

20.0

25.0

USA California France

ton

s/c

ap

ita

Non Energy use

Comm.&Resid.

Industrial

Electricity

Transportation

Energy EfficiencyFirst to reduce CO2 emissions

CO2 in electricity:1.32 lb/kWh (USA)0.88 lb/kWh (Cal)

Consumption:12.7 MWh/cap. (USA) 7.7 MWh/cap. (Cal)

Source: EPA, Inventory of U.S. Green House Gas Emissions and Sinks 1990-2006 February, 2008CARB, Climate Change Proposed Scoping Plan, a framework for change October, 2008

McKinsey Potential Study

• U.S. can reduce energy demand by 23% by 2020

• U.S. can save $1.2 Trillion

• $520 Million investment

• 1.1 GTons CO2 reduction per year

• Re-think how we legislate

• Re-think how we do business

McKinsey Potential Study

McKinsey Potential Study

McKinsey Potential Study

Decoupling in CA

• Gas in 1978, electric in 1982

• Revenues and earnings are independent of sales.

• California’s IOUs collect the revenues authorized to run the business and provide a return to investors.

• If sales rise above forecast levels, extra revenues go back to customers.

• If sales fall below forecast levels, utilities are assured they can recover the shortfall.

• Decoupling offers the benefits of more consistent revenues, and it helps promote broad, long-term environmental goals.

Decoupling in U.S.

CA Energy Action Plan Loading Order

• Energy Efficiency & Conservation

• Demand Response

• Renewable Resources

• Distributed Generation

• Traditional Generation

Why Do Utilities Support Demand-Side Management?

• California customers want it

• Helps mitigate the impact of demand growth on infrastructure

• Less expensive than new generation

• Allows allocation of capital to other needed infrastructure projects

• It decreases CO2 emissions and impact on the environment

Energy Efficiency Numbers

Since mid 70’s, California’s energy efficiency programs have:

• Saved customers over $56 billion

• 30% reduction in per capita CO2 emissions

• California avoided building 24 power plants

• What if California had not acted?

California Invests in Energy EfficiencyCalifornia is investing $3.13 billion in energy efficiency programs between 2010-2012:

Savings Goals:• 6,965 GWh (House: 0.006 GWh/yr)• 1,537 MW • 150.3 MMTherms (House: 500 Therms/yr)• 3.07 MMTons of CO2CFLs use up to

75% less energy and last up to 10 times longer than

traditional incandescent

lamps.

CFLs use up to 75% less energy and last up to 10 times longer than

traditional incandescent

lamps.

How it works

• Funded explicitly from our customers’ bill (Public Goods Charge for Public Purpose Programs)

• De-coupling in place

• Share-holder incentive to generate profit from energy efficiency success

• Goals and budgets are defined for a 3 year period (program cycle)

CPUC Long Term Plan

• All new residential construction in California will be zero net energy by 2020

• All new commercial construction in California will be zero net energy by 2030

• HVAC will be transformed to ensure that its energy performance is optimal for California’s climate

• 100% Low income participation

• Major emphasis on workforce education and training

• www.californiaenergyefficiency.com

Go Solar California• 10 year program (2007 – 2016)

• 3,000 MW, $3.3B

• California Solar Initiative (940 MW, $2.17B)

• New Solar Homes Partnership (360 MW, $0.4B)

• Other (700 MW, $0.78B)

• Customers must perform energy efficiency audit to be eligible for CSI incentives

• www.gosolarcalifornia.org

32

MW

2008 System Load (CAISO / PG&E)

California’s Electricity Need

5,000

7,000

9,000

11,000

13,000

15,000

17,000

19,000

21,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Electric demand is highly variable, with peaks that require higher capacity during short periods.

33Source: California Independent System Operator CorporationSource: California Independent System Operator Corporation

% Time per Year% Time per Year

Last 25% of capacity needed less than 10% of

the time

California uses 5% of capacity for less than 50

hours per year!

California’s Electricity NeedSystem Load Duration Curve

MW

Capacity used to support peak demand is expensive,

inefficient and environmentally unfriendly.

Demand Response Benefits

• Reduces electrical demand during “critical peak” periods

• Rewards customers contributing to demand reduction

• Enables:• Reduced need for excess generation capacity to serve

peak loads: DR is a “virtual peaking plant”• Enhanced electric grid reliability• Lower average electric procurement costs• Lower environmental impact

DR for Home Air Conditioning

• Professionally installed and maintained at zero cost

• Web-programmable thermostat & switch

• 15 / 15 minute compressor on/off cycles during power emergencies

• Opt out any time – owner is in control

• May 1 – October 31

• Benefits: reduced outages, lower utility bills, environmental benefits, sustained comfort

• Professionally installed and maintained at zero cost

• Web-programmable thermostat & switch

• 15 / 15 minute compressor on/off cycles during power emergencies

• Opt out any time – owner is in control

• May 1 – October 31

• Benefits: reduced outages, lower utility bills, environmental benefits, sustained comfort

California’s Renewable Portfolio Standard (RPS)

California’s mandate of 20% renewable energy by 2010 is the most aggressive renewable energy goal in the U.S.

California’s Governor recently signed an Executive Order calling for 33% by 2020.

Implementers are pursuing a diverse portfolio that includes both traditional and emerging renewable technologies.

California leads the way in RPS policy

State renewable portfolio standard

State renewable portfolio goal

Source: www.dsireusa.org/ September 2009

Solar water heating eligible*†

Extra credit for solar or customer-sited renewables

Includes non-renewable alternative resources

WA: 15% by 2020*

CA: 20% by 2010

☼ NV: 25% by 2025*

☼ AZ: 15% by 2025

☼ NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops)

HI: 40% by 2030

☼ Minimum solar or customer-sited requirement

TX: 5,880 MW by 2015

UT: 20% by 2025*

☼ CO: 20% by 2020 (IOUs)10% by 2020 (co-ops & large munis)*

MT: 15% by 2015

ND: 10% by 2015

SD: 10% by 2015

IA: 105 MW

MN: 25% by 2025(Xcel: 30% by 2020)

☼ MO: 15% by 2021

WI: Varies by utility; 10% by 2015 goal

MI: 10% + 1,100 MW by 2015*

☼ OH: 25% by 2025†

ME: 30% by 2000New RE: 10% by 2017

☼ NH: 23.8% by 2025

☼ MA: 15% by 2020+ 1% annual increase(Class I Renewables)

RI: 16% by 2020

CT: 23% by 2020

☼ NY: 24% by 2013

☼ NJ: 22.5% by 2021

☼ PA: 18% by 2020†

☼ MD: 20% by 2022

☼ DE: 20% by 2019*

☼ DC: 20% by 2020

VA: 15% by 2025*

☼ NC: 12.5% by 2021 (IOUs)10% by 2018 (co-ops & munis)

VT: (1) RE meets any increase in retail sales by 2012;

(2) 20% RE & CHP by 2017

29 states & DC have an RPS; 6 additional states have goals

KS: 20% by 2020

☼ OR: 25% by 2025 (large utilities)*5% - 10% by 2025 (smaller utilities)

☼ IL: 25% by 2025

WV: 25% by 2025*†

33% by 2020

proposed

33% by 2020

proposed

Solar Thermal Technologies Under Contract

Dish Engine (SCE/SDG&E)

Compact Linear Fresnel ReflectorParabolic Trough

Power Tower (SCE) Trough/Biomass Hybrid

Power Tower

Solar PV Technologies Under Contract

Tracking Crystalline Silicon

Fixed Thin Film (Cd Tel) (SCE)

Fixed Thin Film (a-Si)

Unspecified CPV (illustrative) Concentrating PV

Other Renewable Technologies Under Contract

Biomass Energy Wind Energy

Small Hydropower (<30MW)

Geothermal Energy

BioGas Ocean Power

Humboldt WaveConnect Pilot

• Ocean wave energy (up to 5MW) pilot study to be conducted off the coast of Humboldt County, Calif.

• Wave energy converter (WEC) manufacturers can test their devices on a common site and facilitate the development of wave energy technology

• Power from the WECs for coastal community for the limited time of the pilot license.

• Most effective WEC technologies will be useed for future projects

Power Plants

Smart Grid functionality restores the balance

Hydro Power Plants

Nuclear Power Plants

Natural Gas Generators

Transmission Lines

Distribution Substations

Plug-in Electric Vehicles

Rooftop Solar

Solar Farms / Power Plants

Wind Farms

Electric Grid Customers

Building A Sustainable Electric System

Utility-scale Storage

Distributed Storage

Largest AMI Deployment in North America

Automated meter reading for all customers

• 10 million meter upgrades by mid-2012

• A communications network

• IT systems

Frequent meter reads - daily for gas, hourly or 15 minute interval for electric

Enhanced customer benefits over time

Over 3 million meters deployed to date

• Installing an average of 13,000 per day

A Smart Grid

PowerPlants

TransmissionNetworks

Substations DistributionNetworks

Consumers

Overlay with intelligence and automation

Sense Communicate Compute Control

Integrated Demand-Side Resources

On-site generation and storage

Smart charging for electric vehicles

Automated management of energy use:

• Automated demand response

• Voluntary load control

• Dynamic pricing

ClimateSmartTM

ClimateSmart™ How It Works

• Allows PG&E customers to voluntarily make their electricity and natural gas use “carbon neutral”

• Around $5 per month for average residential customer

• Customer payments are tax-deductible and will be invested in a range of innovative greenhouse gas emission reduction projects, such as conserving and restoring California’s forests

• All projects are new with independently verified emission reductions

Climate Smart Projects

Photo Courtesy Sempervirens Fund

Garcia River Forest

• The Conservation Fund• 200,000 metric tons

Photo credit: Douglas

Steakley 

Lompico Headwaters Forest

• Sempervirens Fund• 14,000 metric tons

• The Conservation Fund• 600,000 metric tons

Big River and Salmon Creek Forests

Arcata Community Forest

• City of Arcata• 40,000 metric tons

Methane Capture from Dairy

• California Bioenergy• 75,000 metric tons • Recology

• 90,750 metric tons

Methane Capture from Landfills

Pacific Energy Center

One of three PG&E “centers” (7 in CA) funded by public goods charge offering:

• Energy efficiency classes• Tool Lending Library • Technical advice and research assistance• More than 500,000 people trained since

1979 by PG&E training centers

www.pge.com/pec