Pathways for Deep Decarbonization in California...Fo,rma1tions 7 Industry is the sector that is most...

Evolving Energy Realities: Adapting to What’s Next

Melanie KenderdinePrincipal, Energy Futures Initiative

Sacramento, CAAugust 15, 2019

Optionality, Flexibility & Innovation: Pathways for Deep Decarbonization in

California

ENERGY FUTURES - INITIATIVE -

1

17.7

8.0

5.0 4.03.6 3.0

2.01.7

22.0

16.0

9.1

6.3 5.9 5.9

1.4 0.7 0.4

12.8

7.2 6.75.5 4.3 4.3

3.6 3.11.0

8.4

5.13.9 3.6

4.5

0.2 0.20

5

10

15

20

25N

GCC/

CCUS

Rene

wab

les/

Up to

10-

hr S

tora

ge

Stor

age/

NGC

C H

ybrid

s

Dec

arbo

nize

d Im

ports

RNG

Use

Rene

wab

les/

5-hr

Sto

rage

H2 D

opin

g

Dem

and

Resp

onse

LDV

CAFE

LDV

LCFS

LDV

Elec

trific

atio

n

HDV

CAFE

HDV

LCFS

Low

er L

DV

VMT

Low

er H

DV V

MT

Othe

r VM

T

HDV

AFVs

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Fuel

-sw

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to H

2

Best

Man

agem

ent P

ract

ices

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mat

ion/

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tive

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ufac

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g

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-sw

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atur

al G

as

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as C

aptu

re

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Use

Low

er F

ugiti

ve E

mis

sion

s

CHP

Ener

gy E

ffici

ency

CHP

Elec

trific

atio

n

RNG

Use

Biog

as C

aptu

re

Optim

ize

Ferti

lzer

Redu

ce F

uel

Electricity Transportation Industry Buildings Agriculture

GHG

Em

issi

ons

Redu

ctio

n Po

tent

ial

(MM

TCO 2

e)

TransportationElectricity Buildings AgricultureIndustrySource: EFI analysis

GH

G E

mis

sion

s Red

uctio

n Po

tent

ial M

MT

CO2e

Electricity68.616%

Rest of Economy360.884%

Industry100.423%


Agriculture 33.88%


Buildings39.49.2%

Rest of Economy390.090.8%

Industry: 23% Transportation: 39% Electricity: 16%

Buildings: 9% Agriculture: 8%

Source: EFI using data from CARB

Sectoral Emissions in California, 2016ENERGY FUTURES - INITIATIVE -

Rest of Economy 259.97

61%

2

17.7

8.0

5.0 4.03.6 3.0

2.01.7

22.0

16.0

9.1

6.3 5.9 5.9

1.4 0.7 0.4

12.8

7.2 6.75.5 4.3 4.3

3.6 3.11.0

8.4

5.13.9 3.6

4.5

0.2 0.20

5

10

15

20

25

NGC

C/CC

US

Rene

wab

les/

Up to

10-

hr S

tora

ge

Stor

age/

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C H

ybrid

s

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arbo

nize

d Im

ports

RNG

Use

Rene

wab

les/

5-hr

Sto

rage

H2 D

opin

g

Dem

and

Resp

onse

LDV

CAFE

LDV

LCFS

LDV

Elec

trific

atio

n

HDV

CAFE

HDV

LCFS

Low

er L

DV

VMT

Low

er H

DV V

MT

Othe

r VM

T

HDV

AFVs

CCUS

Fuel

-sw

itch

to H

2

Best

Man

agem

ent P

ract

ices

Auto

mat

ion/

Addi

tive

Man

ufac

turin

g

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to N

atur

al G

as

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as C

aptu

re

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Use

Low

er F

ugiti

ve E

mis

sion

s

CHP

Ener

gy E

ffici

ency

CHP

Elec

trific

atio

n

RNG

Use

Biog

as C

aptu

re

Optim

ize

Ferti

lzer

Redu

ce F

uel

Electricity Transportation Industry Buildings Agriculture

GHG

Em

issi

ons

Redu

ctio

n Po

tent

ial

(MM

TCO 2

e)

TransportationElectricity Buildings AgricultureIndustry

Identified Emissions Reduction Potential of Sector-Specific Pathways for Meeting the 2030 Targets

Source: EFI analysisSource: EFI analysis

TransportationElectricity Buildings AgricultureIndustry

ENERGY FUTURE - INITIATIVE

3

Sectoral GHG Emissions Reductions Achieved by 2030 From Top Two Technology Pathways*

Electricity68.616%


Industry100.423%


Agriculture 33.88%


Buildings39.49.2%

Rest of Economy390.090.8%

Industry: 23%Need 40 MMT reduction by 2030

Top 2 pathways get halfway there

Transportation: 39%Need 68 MMT reduction by 2030

Top 2 pathways get 44% of way there

Electricity: 16%Need 27 MMT reduction by 2030

Top 2 pathways get 100% of target

Buildings: 9%Need 15 MMT reduction by 2030

Top 2 pathways get 93% of way there

Agriculture: 8%Need 13 MMT reduction by 2030

Top 2 pathway gets 35% of the target

*From 2016 emissions baseline, growth not assumed


Rest of Economy 259.97

61%

4

Hourly trends in solar and wind capacity factors in CA for 2017 aligned to normalized variation in hourly load relative to peak daily load

Over the course of a year large-scale dependence on both wind and solar will result in significant periods requiring very large-scale back-up options

Source: CAISO data, EFIanalysis

1 2 3 4 5 7 8 9 10 11121314 15 16 17 18 19

20 21 22 2324 2526 27 2829 30

31

323334 35 363738 39 40 4241

43 44 45 46 4748 49 50 51 53 555457

52 565958 6463 676566626160

6

687069 7271 7374 7675 78 8077 828179 83 84858687888990

Significant Challenges for Utility Scale Battery StorageChallenges with Integrating Intermittent RenewablesENERGY FUTURES - INITIATIVE -

Jan

Feb

Apr ,,......~ ..,.-

May

Jun

Jul

Aug

Sep

Oct

5

Seasonal Variation in Solar & Wind

Metered Solar Generation Wind Generation

1.5 TWh in January

3.2 TWh in June

Delta: 1.7 TWh

0.6 TWh in January

2.0 TWh in June

Delta: 1.4 TWh

Wind/Solar Seasonal Delta Between January and June, 2016

3.1 TWhSource: EFI, compiled using data from CAISO


3.5 - 2016

3.0 - - 2017

2.5 - 2018

2.0

1.5

1.0

0.5

0.0 Jan Feb Mar Apr May

2.5 - 2016

- - 2017

2.0 - 2018

1.5

1.0

0.5

Jun Ju l Aug Se May Jun Ju l Aug Sep Oct Nov Dec

6

Industry: Multiple Subsectors, Combustion and Non-Combustion Emissions Require a Range of Pathways

Industry Sector Energy Consumption by Fuel Type Potential Sequestration Sites for Industrial Facilities



Distillate Fuel Oil 5%

Petroleum Coke 4%

Asphalt & Road Oil 4%

..----- Motor Gasoline 2%

Hydrocarbon Gas Liquids

1%

Lubricants & Kerosene

1%

Other Petroleum Products

11%

+ Cement Plants • Ga,s Process,i ng Pia nts ,, O i I 1Refi1n eries

• Ui l & Gas Reservoirs Saline· Fo,rma1tions 7

Industry is the sector that is most difficult to decarbonize. Innovation

is needed in hydrogen, carbon capture, storage and utilization, and

biogas.

Expanded 45Q Tax Credit for Carbon Capture, Utilization and Storage (CCUS), AOTAENERGY FUTURES

- INITIATIVE -

Estimated and Measured First-of-a-Kind Costs for CCS Applied to Different Plants

Cement

IGCC

Natural Gas Combined Cycle

Iron & Steel

Oxyfuel

Supercritical P

So

Th Th re

Fertilizer

Biomass-to-Ethanol

. $23-33

I $21-21

■ $20-27

100

$67-119

$63-121

$60-121

$81-148

$80-160

150 $USO Per Ton of CO2

$104-194

Tax Credit Value Available for Different Sources and Uses of CO2

200 -nd indus a s. They -

0

Minimum Size of Eligible Carbon Capture Plant by Type {ktCOz/yr)

al ill~ Type of CO2 Storage/Use 1111■-■ Dedicated Geological 500 100 100 34 36 39 42

Storage

Storage via 500 100 100 22 24 26 28 31

EOR

Other Utilization 25 25 25 19 22 24 26 28 31 Processes1

1 Each CO2 source cannot be greater than 500 ktCOifyr 2 Any credit will only apply to the portion of the converted CO2 that can be shown to reduce overall emissions

8

Biogas/Renewable Gas for Decarbonizing Agriculture Sector

33.8

20.3

-4.5

0

5

10

15

20

25

30

35

2016 Emissions Biogas Capture 2030 Target

GH

G E

mis

sion

s (M

MTC

O2e

)

Utilizing agricultural residues and manure as biogas feedstocks for RNG could provide up to 46.6 Bcf/year of carbon-neutral gas by 2030…Biogas capture also could provide

emissions reductions and economic benefits to the Agriculture sector ….Diverting methane into a useable product in the form of RNG can have a significant net impact on CO2e levels—potentially reducing the Agriculture sector’s emissions 13 percent by 2030.

RNG Generation Potential in California (Mcf CH4/year) Biogas Capture Pathway and 2030 Target (MMTCO2e)

Source: EFI Analysis


RNG Generation Potential (Mcf CH4/yr) S200 201-400 40 -600

- 601-800 - >800

9

Meeting the Clean Energy Ministerial’starget of 30 million

electric vehicle sales by 2030

would require 314 kt/yr. of cobalt,

almost three times the 2017 level for all uses. At those

rates, reserves would last 23 years.

Carbonbrief.org

Lithium, Cobalt, Nickel Production/Reserves

Tesla’s global supply manager for battery metals, told

a closed-door Washington

conference of miners, regulators

and lawmakers that the automaker sees

a shortage of key EV minerals coming

in the near future…Tesla will continue to focus more on nickel, part of a plan by Chief Executive

Elon Musk to use less cobalt in

battery cathodes.Electrek, May, 2019

NOT FOR DISTRIBUTION OR CITATION

10

Lithium Production/Reserves (metric tons)

Source: USGS, 2019

Cobalt Production/Reserves (metric tons)

Nickel (metric tons)


al ia

jnshas.a)

Madagascar M o r o cco Papua New Guinea Philippines Russi a Sout h AfTica O ther countries

WDTld total 1-ounded .

New Caledoni a 1 '° Philippines Russi a South, Africa O t her countri es

WOTk:I total (1-oun ded)

40,000

14,200

800

800 869,000

w

51 000

800 500

1,1600 885 000

- . . .. . -;-a"•""Jir7"■ - - -. . . ..

1

73.000

2 .200 3.:3 1 0 4 ,600 .5,900 2 .:300

215. 366. , .214. ,

48. 1 46.000

2 , 1 60,000

90,000

2 ,300 3 ,200 4 ,600 5 ,900 2 ,200 7 .000

1 40 000

2 1 0 ,000 340,000 2 1 0 ,000

4 4,000 1 80.000

2 , :300,000

1 40.000 17.000 56.000

280,000 250.000

24.000 640,000

6 900 000

4 ,800.000 7 600 000 3 '.700:000 6 . 500.000

8'9,000,000

10

Breakthrough Technology Portfolio, Post-2030

Seasonal Storage Direct Air Capture, Large Scale Carbon Management

Source: EFI Analysis, NREL


Smart Cities

Hydrogen from Electrolysis

Seasonal Storage

Ir.

alg Building Performance Technology

~ Bioenergy

Electolyzer + H2 Storage (Power2Gas) + Fe/Generator

Seasonal Thermal

High Temp Thermal {CSP)

Building or Load shifting

Pumped Hydro

CAES

Flow Battery =::J Lead Acid Battery

Li-Ion Battery

Flywheels

Supercapacitors

Regulat ion load Following

milliseconds seconds minutes hours

Seasonal Energy Storage Options

Energy Shifting

days months

i&_ Floating Offshore Wind -0 4 Advanced Nuclear

lcAPTURE I

Dilute Sources

,1/ I

-/Q,-o 6 u~ ----- -- - -.,,.. --- --- __.._, Concentrated Sources ,..

r' r'

1111 ·~ 111111

~ Clean Cement ~fl.-◄ ► .,,.,,, ..... Advanced Photovoltaics

0 Li-ion Battery Recycling ~ Direct Air Capture

I UTILIZATION I l sroRAGE I

Products or Fuels Biological

-~ ·~ Enhanced Recovery Geologic

,. t •-r• -··· --..• • .,•·· ~ ··-•• .... ■ •·

11

Slide Number 1Slide Number 2Slide Number 3Slide Number 4Slide Number 5Slide Number 6Slide Number 7Expanded 45Q Tax Credit for Carbon Capture, Utilization and Storage (CCUS), AOTASlide Number 9Slide Number 10Slide Number 11

Pathways for Deep Decarbonization in California...Fo,rma1tions 7 Industry is the sector that is most...

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