Meeting Climate, Energy, and Economic Imperatives with Energy Efficiency California’s Policies for Reducing GHG Emissions ...
Governor Schwarzenegger’s  Executive Order on GHG Emissions June 1, 2005 <ul><li>CA would reduce Greenhouse Gases to </li>...
AB 32:  The Global Warming Solutions Act  of 2006
Costs of GHG Strategies McKinsey and Co. Analysis
Sources of GHG Emissions in California 2004
GHG Reductions in Electric Sector <ul><li>AB 32 directed Energy Commission and Public Utilities Commission to recommend to...
Electric Sector Context <ul><li>Sector accounts for 25% of California’s GHG emissions </li></ul><ul><li>ARB envisions sect...
Draft  Final Opinion from CEC and CPUC <ul><ul><li>Proposed strategies include- </li></ul></ul><ul><ul><ul><li>Regulatory ...
All Cost-Effective Energy Efficiency <ul><li>Expand mandatory standards </li></ul><ul><li>Enhance utility programs </li></...
Energy Efficiency Standards <ul><li>Buildings </li></ul><ul><ul><li>Continually more stringent </li></ul></ul><ul><ul><li>...
Energy Efficiency Savings GWh 10,000 20,000 30,000 40,000 50,000 1980 1990 2000 2006 Cumulative
Energy Efficiency Results
33% Renewable Energy Renewable Portfolio Standard
Contracts for New RPS Capacity
Barriers to Meeting the RPS <ul><li>Transmission </li></ul><ul><li>Contracts </li></ul><ul><li>System integration </li></u...
Other Programs for Renewables <ul><li>California Solar Initiative </li></ul><ul><li>Goal of 3,000 MW </li></ul><ul><li>Com...
Cap-and-Trade Program <ul><li>Initially, 80% allowances distributed administratively,  20% auctioned; by 2016, 100% auctio...
Allowance Allocation Summary Free Allocation Auction Allocations 2012 80% 20% 2016 0 100% Allowances Granted to: Deliverer...
Auction Revenue <ul><li>All auction revenues for purposes of AB 32 </li></ul><ul><li>Retail providers must use revenue for...
C&T Design Features <ul><li>Open, transparent trading with many participants </li></ul><ul><li>Multi-sector, regional cap-...
Conclusions <ul><li>California’s GHG program for the electric sector will likely include </li></ul><ul><ul><li>Energy effi...
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Jackalyne Pfannenstiel, CEC: Meeting Climate, Energy, and Economic Imperatives with Energy Efficiency

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Jackalyne Pfannenstiel, Chair of the California Energy Commission

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  • Jackalyne Pfannenstiel, CEC: Meeting Climate, Energy, and Economic Imperatives with Energy Efficiency

    1. 1. Meeting Climate, Energy, and Economic Imperatives with Energy Efficiency California’s Policies for Reducing GHG Emissions in the Electric Sector Alliance to Save Energy International Policy Leaders Dialogue September 25, 2008 <ul><li>Jackalyne Pfannenstiel </li></ul><ul><li>Chairman </li></ul><ul><li>California Energy Commission </li></ul>
    2. 2. Governor Schwarzenegger’s Executive Order on GHG Emissions June 1, 2005 <ul><li>CA would reduce Greenhouse Gases to </li></ul><ul><li>2000 levels by 2010 </li></ul><ul><li>1990 levels by 2020 </li></ul><ul><li>80% below 1990 levels by 2050 </li></ul>
    3. 3. AB 32: The Global Warming Solutions Act of 2006
    4. 4. Costs of GHG Strategies McKinsey and Co. Analysis
    5. 5. Sources of GHG Emissions in California 2004
    6. 6. GHG Reductions in Electric Sector <ul><li>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 </li></ul><ul><li>Commissions conducted joint proceeding: issued Draft Opinion in September; will adopt Final Opinion in October </li></ul><ul><li>ARB is final decision-maker </li></ul>
    7. 7. Electric Sector Context <ul><li>Sector accounts for 25% of California’s GHG emissions </li></ul><ul><li>ARB envisions sector contributing 40% of GHG reductions </li></ul><ul><li>Imports are 22% of electricity sold; 40-55% of electric sector emissions </li></ul>GHG Emissions
    8. 8. Draft Final Opinion from CEC and CPUC <ul><ul><li>Proposed strategies include- </li></ul></ul><ul><ul><ul><li>Regulatory Mandates </li></ul></ul></ul><ul><ul><ul><ul><li>Energy Efficiency : All cost-effective energy efficiency </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Renewable Energy : Expand mandate to 33% </li></ul></ul></ul></ul><ul><ul><ul><li>Cap and Trade : To provide future reductions </li></ul></ul></ul>Issued for Public Comment 9/12/08
    9. 9. All Cost-Effective Energy Efficiency <ul><li>Expand mandatory standards </li></ul><ul><li>Enhance utility programs </li></ul><ul><li>Market transformation </li></ul><ul><li>R&D </li></ul>
    10. 10. Energy Efficiency Standards <ul><li>Buildings </li></ul><ul><ul><li>Continually more stringent </li></ul></ul><ul><ul><li>Upgrade existing buildings </li></ul></ul><ul><ul><li>Zero energy new buildings </li></ul></ul><ul><li>Appliances </li></ul><ul><ul><li>Technically feasible and cost-effective </li></ul></ul><ul><ul><li>Home electronics </li></ul></ul><ul><ul><li>Adopt technological improvements </li></ul></ul>
    11. 11. Energy Efficiency Savings GWh 10,000 20,000 30,000 40,000 50,000 1980 1990 2000 2006 Cumulative
    12. 12. Energy Efficiency Results
    13. 13. 33% Renewable Energy Renewable Portfolio Standard
    14. 14. Contracts for New RPS Capacity
    15. 15. Barriers to Meeting the RPS <ul><li>Transmission </li></ul><ul><li>Contracts </li></ul><ul><li>System integration </li></ul><ul><li>Environmental issues </li></ul><ul><li>NIMBY </li></ul><ul><li>Federal tax credits </li></ul><ul><li>Cost? </li></ul>
    16. 16. Other Programs for Renewables <ul><li>California Solar Initiative </li></ul><ul><li>Goal of 3,000 MW </li></ul><ul><li>Combine with EE </li></ul><ul><li>Declining incentives </li></ul><ul><li>New and existing buildings </li></ul><ul><li>Homes and businesses </li></ul><ul><li>Currently about 400 MW </li></ul><ul><li>Utility Investments </li></ul><ul><li>Rate-based installations </li></ul><ul><li>Leased roof space </li></ul><ul><li>Power back to grid </li></ul><ul><li>Goals </li></ul><ul><ul><li>SCE - 250 MW </li></ul></ul><ul><ul><li>SDG&E - 80MW </li></ul></ul>
    17. 17. Cap-and-Trade Program <ul><li>Initially, 80% allowances distributed administratively, 20% auctioned; by 2016, 100% auction </li></ul><ul><li>Free allowances </li></ul><ul><ul><li>To “deliverers” </li></ul></ul><ul><ul><li>Based on energy output, weighted by fuel source </li></ul></ul><ul><ul><li>If emitters reduce carbon content of power, can sell allowances </li></ul></ul><ul><li>Auction </li></ul><ul><ul><li>Allowances to retail providers on behalf of customers </li></ul></ul><ul><ul><li>Independent, centralized auction required </li></ul></ul><ul><ul><li>Allocations initially based on historical emissions; later, sales-based </li></ul></ul>
    18. 18. 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
    19. 19. Auction Revenue <ul><li>All auction revenues for purposes of AB 32 </li></ul><ul><li>Retail providers must use revenue for </li></ul><ul><ul><ul><li>Efficiency </li></ul></ul></ul><ul><ul><ul><li>Renewable energy </li></ul></ul></ul><ul><ul><ul><li>New energy technology </li></ul></ul></ul><ul><ul><ul><li>Infrastructure </li></ul></ul></ul><ul><ul><ul><li>Low-income customers </li></ul></ul></ul><ul><li>ARB may retain small portion of allowances for statewide energy sector programs </li></ul>
    20. 20. C&T Design Features <ul><li>Open, transparent trading with many participants </li></ul><ul><li>Multi-sector, regional cap-and-trade market </li></ul><ul><li>No restrictions on market participation </li></ul><ul><li>Links to other equally-stringent cap-and-trade programs </li></ul><ul><li>Significant non-compliance penalties </li></ul><ul><li>No safety valves or price triggers </li></ul><ul><li>Offsets must be real, additional, verifiable,enforceable, permanent, certified by third parties </li></ul>
    21. 21. Conclusions <ul><li>California’s GHG program for the electric sector will likely include </li></ul><ul><ul><li>Energy efficiency </li></ul></ul><ul><ul><li>Renewable resources </li></ul></ul><ul><ul><li>Cap-and-trade </li></ul></ul><ul><li>Aggressive efficiency and renewables programs can reduce emissions to 1990 levels </li></ul><ul><li>Cap-and-trade can provide opportunities for further reductions </li></ul>

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