Jackalyne Pfannenstiel, CEC: Meeting Climate, Energy, and Economic Imperatives with Energy...
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Meeting Climate, Energy, and Meeting Climate, Energy, and Economic Imperatives with Economic Imperatives with Energy Efficiency Energy Efficiency California’s Policies for Reducing GHG California’s Policies for Reducing GHG Emissions in the Electric Sector Emissions in the Electric Sector Alliance to Save Energy Alliance to Save Energy International Policy Leaders Dialogue International Policy Leaders Dialogue September 25, 2008 Jackalyne Pfannenstiel Chairman California Energy Commission
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Jackalyne Pfannenstiel, Chair of the California Energy Commission
Transcript of Jackalyne Pfannenstiel, CEC: Meeting Climate, Energy, and Economic Imperatives with Energy...
Meeting Climate, Energy, and Meeting Climate, Energy, and Economic Imperatives with Economic Imperatives with
Energy EfficiencyEnergy Efficiency
California’s Policies for Reducing GHG California’s Policies for Reducing GHG Emissions in the Electric SectorEmissions in the Electric Sector
Alliance to Save EnergyAlliance to Save EnergyInternational Policy Leaders DialogueInternational Policy Leaders Dialogue
September 25, 2008
Jackalyne Pfannenstiel
Chairman
California Energy Commission
Governor Schwarzenegger’s Executive Order on GHG Emissions
June 1, 2005CA would reduce Greenhouse Gases to
2000 levels by 2010
1990 levels by 2020
80% below 1990 levels by 2050
AB 32: The Global Warming Solutions Act of 2006
Costs of GHG StrategiesMcKinsey and Co. Analysis
Sources of GHG Emissions in California
Agriculture6%
Electricity Generation(Imports)
13%
Electricity Generation (In-State)
12%
Commercial3%
Residential 6%
Transportation38%
Industrial20%
2004
GHG Reductions in Electric Sector
AB 32 directed Energy Commission and Public Utilities Commission to recommend to Air Resources Board strategies for reducing GHG emissions in electricity and natural gas sectors
Commissions conducted joint proceeding: issued Draft Opinion in September; will adopt Final Opinion in October
ARB is final decision-maker
Electric Sector Context
Sector accounts for 25% of California’s GHG emissions
ARB envisions sector contributing 40% of GHG reductions
Imports are 22% of electricity sold; 40-55% of electric sector emissions
Agriculture6%
Electricity Generation(Imports)
13%
Electricity Generation (In-State)
12%
Commercial3%
Residential 6%
Transportation38%
Industrial20%
GHG Emissions
Draft Final Opinion from CEC and CPUC
Proposed strategies include-○ Regulatory Mandates
Energy Efficiency: All cost-effective energy efficiency
Renewable Energy: Expand mandate to 33%
○ Cap and Trade: To provide future reductions
Issued for Public Comment 9/12/08
All Cost-Effective Energy Efficiency
Expand mandatory standards
Enhance utility programs
Market transformation
R&D
Energy Efficiency Standards
BuildingsContinually more stringentUpgrade existing buildingsZero energy new buildings
AppliancesTechnically feasible and cost-effectiveHome electronicsAdopt technological improvements
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Energy Efficiency SavingsG
Wh
10,000
20,000
30,000
40,000
50,000
1980 1990 2000 2006
Cumulative
Energy Efficiency Results
Per Capita Electricity Sales (not including self-generation)(kWh/person)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
19
60
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62
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64
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66
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02
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04
United States
California
33% Renewable Energy
-
20,000
40,000
60,000
80,000
100,000
120,000
1983 1988 1993 1998 2003 2008 2013 2018
Year
Sta
tew
ide A
nn
ual
Ren
ew
ab
le G
en
era
tio
n
GW
h
(Exclu
din
g L
arg
e H
yd
ro)
20% by 2017
20% by 2010
33% by 2020
2002 11.0% Renewables (RPS begins)
2006 10.9% Renewables
Renewable Portfolio Standard
Contracts for New RPS Capacity
3,500
129
181
6
724
3,586
879
0 1000 2000 3000 4000
MW
Large Scale PV Solar Thermal GeothermalSmall Hydro Biomass BiogasWind
Barriers to Meeting the RPS
Transmission Contracts System integration Environmental
issues NIMBY Federal tax credits Cost?
Other Programs for Renewables
California Solar Initiative Goal of 3,000 MW Combine with EE Declining incentives New and existing
buildings Homes and businesses Currently about 400 MW
Utility Investments Rate-based installations Leased roof space Power back to grid Goals
SCE - 250 MWSDG&E - 80MW
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Cap-and-Trade Program
Initially,80% allowances distributed administratively, 20% auctioned; by 2016, 100% auction
Free allowancesTo “deliverers”Based on energy output, weighted by fuel source If emitters reduce carbon content of power, can sell
allowances
AuctionAllowances to retail providers on behalf of customers Independent, centralized auction requiredAllocations initially based on historical emissions; later, sales-
based
Allowance Allocation Summary
Free Allocation Auction
Allocations
2012 80% 20%
2016 0 100%
Allowances Granted to: Deliverers (Generators)
Retail Providers (Utilities)
Number Based on:
2012 Output + Fuel Source Historical Emissions
2020 NA Sales
Auction Revenue
All auction revenues for purposes of AB 32 Retail providers must use revenue for
○ Efficiency ○ Renewable energy ○ New energy technology ○ Infrastructure○ Low-income customers
ARB may retain small portion of allowances for statewide energy sector programs
C&T Design Features
Open, transparent trading with many participants
Multi-sector, regional cap-and-trade market
No restrictions on market participation Links to other equally-stringent cap-
and-trade programs Significant non-compliance penalties No safety valves or price triggers Offsets must be real, additional,
verifiable,enforceable, permanent, certified by third parties
Conclusions California’s GHG program for the electric
sector will likely includeEnergy efficiencyRenewable resourcesCap-and-trade
Aggressive efficiency and renewables programs can reduce emissions to 1990 levels
Cap-and-trade can provide opportunities for further reductions
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