California’s Energy Outlook for 2008 and Beyond · Terminator 2: Judgment Day 1991 “I say the...

California Energy Commission

California’s Energy Outlookfor 2008 and Beyond

Jeffrey D. ByronCommissioner


California Manufacturers & Technology AssociationJuly 24, 2008


Presentation Outline

California’s Energy Policy—Status andChallenges

Climate Change Mitigation will HeightenPolicy Focus on Renewables & EnergyEfficiency

Integration and Cost Challenges

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Governor’s Leadership on Climate Change

“I’ll be back.”

Arnold Schwarzenegger Terminator 2: Judgment Day 1991

“I say the debate is over.We know the science.

We see the threat.And, we know the time foraction is now.”

Governor Schwarzenegger World Environment Day San Francisco, California June 1, 2005

September 2006

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All Energy Issues Now ConsideredIn Context of GHG Reduction

California became the national leader inClimate Change with the adoption ofAssembly Bill 32

Establishes a GHG emission limit for 2020 ata level equivalent to the state’s 1990emissions

Provides the primary means to achieve theGovernor’s GHG emission reduction targets

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AB 32 Requirements Establish a statewide GHG emissions cap for 2020,

based on 1990 emissions (Jan ‘08)

Adopt mandatory reporting rules for significantsources of GHGs (Jan ‘09)

Adopt a plan for achieving emission reductions fromsignificant GHG sources via regulations, marketmechanisms, and other actions (Jan ‘09)

Adopt regulations to achieve the maximumtechnologically feasible and cost-effective reductionsin GHGs with provisions for both (Jan ‘11)• Market mechanisms• Alternative compliance mechanisms

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Greenhouse Gas Sources

Transportation41%

Ag & Forestry8%

Industrial21%

Electric Power22%

Others8%

Transportation and Electric Power sectorsproduced two-thirds of state GHG in 2004.

Source: California Energy Commission, October 2006

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Transitioning from Today’s Energy Profileto a Low Carbon Profile

Continueaggressiveenergyefficiency

Per Capita Electricity Sales (not including self-generation)

(kWh/person) (2006 to 2008 are forecast data)

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

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08

kW

h/p

ers

on

France

United States

California

Portugal

Spain

W. Europe

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CO2 Intensity ComparisonsCarbon Dioxide Intensity and Per Capita CO2 Emissions – 2001

(Fossil Fuel Combustion Only)

0.00

5.00

10.00

15.00

20.00

25.00

0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00

Intensity (tons of CO2 per 2000 US Dollar)

Tons

of C

O2 p

er p

erso

n

Canada Australia

S. Korea

California

Mexico

United States

Austria

Belgium

Denmark

France

Germany

Italy

Netherlands

New ZealandSwitzerland

Japan

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California’s CO2 Emission Reduction Strategies

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AB 32 CEC-CPUC Joint Decisionfor GHG Reduction

• Recommendations to ARB - Sept 2008

• Aggressive Energy Efficiency Goals

• Anticipate 33% Renewables Goal

• Significant role for CHP

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40

50

60

70

80

90

100

110

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140

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

Ele

ctr

icit

y s

ecto

r em

issio

ns (

MM

T C

O2e)

Total CO2e (MMT) 33% renewable energy

3,000 MW rooftop solar PV "High goals" energy efficiency

"High case" combined heat and power Natural gas only build-out

Draft Modeling Results for Electricity Sector Emission ReductionsPotential Compared to Historic Electricity Sector Emissions

Gas Build-out Reference Case Accelerated Policy Case

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Example Rate Comparison:Reference Case vs. Accelerated Case

Scenario: User Case = 33%RPS/High EE goals Scenario (Accelerated Policy Case)

Rate Change between 2020 Reference and 2020 User CasePG&E SCE SDG&E SMUD LADWP NorCal Other SoCal Other Total CA

! 2020 Ref to 2020 User Case 15.3% 12.7% 14.8% 24.7% 17.8% 10.3% 14.2% 13.8%

! 2008 to 2020 User Case 29.4% 25.3% 22.7% 32.8% 46.1% 18.8% 34.1% 28.7%

Comparison of 2008 and 2020 Rates

$-

$0.05

$0.10

$0.15

$0.20

$0.25

PG&E SCE SDG&E SMUD LADWP NorCal

Other

SoCal

Other

Total CA

Av

era

ge

Ra

tes

($

/kW

h)

2008 Rate Level

Reference 2020

User Case 2020

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California’s Sources of Energy

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California Electricity (2006)

In-State 78.03%

Natural Gas 41.5%Nuclear 12.9%Large Hydro 19.0%Coal 15.7%Renewable 10.9%

Imports 21.97%PNW 6.72%DSW 15.25%

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Henry Hub Daily Spot Price 2005-2008

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

Prepared by CEC Staff 5/21/2008

2005 2006 2007 2008

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U.S. Natural Gas Futures Prices

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

11.00

12.00

13.00

14.00

Historical & Forward NYMEX Settlements

Historical May 21, 2007 Strip April 25, 2008 Strip May 20, 2008 Strip

Prepared by CEC Staff 5/21/2008

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Heavy Reliance On Natural GasFor Electricity Production

Since 1998, licensed 62 power plants,24,000 megawatts licensed.

Through December 2007, 38 plants built,13,870 megawatts.

Licensed plants are natural gas-fired,except for two geothermal facilities.

20 plants in active review, 3 are solar-thermal. Peak demand growth projected at 1.6% per yr.

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Transitioning from Today’s Energy Profileto a Low Carbon Profile

Renewables are essential for meeting AB 32 goals 33% RPS by 2020 achievable with program

improvements: Transmission siting Dispatchability and reliability Contract assurance

Utilities not expected to meet 20% by 2010, butmay have contracted for the necessary amount.

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Source: California Energy Commission 2007 IEPR (Scenario Analysis of California's Electricity System)

Annual Electricity Use…

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Source: California Energy Commission 2007 IEPR (Scenario Analysis of California's Electricity System)

… Scenario of Possible Sources

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Generation Capacity (MW) Needed toFulfill Scenario

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CaliforniaSolar

Potential



RETI Organization: MembersCalifornia Energy Commission

Coordinating Committee– Public Utilities Commission– Energy Commission– California ISO– POUs (SCAPPA, SMUD, & NCPA delegates)

Stakeholder Steering Committee– PUC, CEC, ISO, & POUs– Transmission Providers– Load Serving Entities– Generators– Environmental and Consumers Organizations– Permitting Agencies (Federal, State, Local)– Military

Plenary Group– All Interested Stakeholders

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California Energy CommissionCalifornia Energy Commission

RETI Objectives Provide a common forum for Commissions, utilities,

and developers to examine the location and timingof new generation/transmission projects

Provide a common perspective for evaluatingdifferent technologies competing for limited systemresources

Develop tools and analysis methods to evaluaterenewables

Support and cooperate with current transmissionplanning efforts

Statewide integrated transmission planning optionsto meet policy objectives

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IEPR Overview

SB 1389 requires integrated energy policyreport every two years

Update prepared in alternate years Provides overview of major energy trends and

issues Foundation for California energy policies and

decisions Public process


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2008 IEPR Update Topics

System changes to support 33% renewables Portfolio analysis in long-term procurement Energy efficiency in demand forecast CPUC/CEC decision in AB 32 proceeding Nuclear power plant vulnerability (AB 1632) Evaluation of CPUC self-generation incentive

program (AB 2778)


The Electric System Grows “Peakier” In 2000, 72% population lived along coast. By 2040, nearly 40% of population will live inland. Need for more peaking plants or demand response measures to meet

the higher summer peaks.

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Load Duration Curve

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

55,000

Hour

Sept '05 to Sept '06

50,085 MW Peak 7/24/06

Greater than 45,000 MW 57 hours or 0.65%



Winter Peak 33,275 MW 12/14/05

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Factors That May Increase CostsTo Customers

Economy - weakening dollar; tradeimbalance; recession

Increased system “peakiness” Tight natural gas market Aging T&D infrastructure Demand growth AB 32 implementation Phase out once-through-cooling plants

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Gasoline Prices Around the World

Chevy TahoeFill-Up

$207.74

$261.30$239.98

$233.48$231.40$231.14$230.10

$228.28$226.46

$223.60$209.82

$191.88$190.06$189.80

$123.54$124.54

$132.34

$122.72$104.00

$98.54$73.84

$66.04$63.96

$45.24$15.60

$10.66$6.50

/Gallon

U.S.

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55

2002 2004 2006 2008 2010 2012 2014 2016

MP

G C

on

vert

ed

to

CA

FE

Test

Cycle

Japan

EU

China

Canada California

(Pavley)

US (1) dotted lines denote proposed standards

(2) MPG = miles per gallon

Australia

~

Comparison of Fuel Economy – PassengerVehicles

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California’s Energy Outlook for 2008 and Beyond · Terminator 2: Judgment Day 1991 “I say the...

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Transcript of California’s Energy Outlook for 2008 and Beyond · Terminator 2: Judgment Day 1991 “I say the...