Study Boosts California Push For Renewables, Biofuels To Meet GHG Target

Source: By Inside EPA • Posted: Monday, March 16, 2015

SACRAMENTO, CA — An independent study commissioned by several California agencies could help state officials justify ambitious new renewable electricity and biofuel programs policymakers are seeking as they debate ways to achieve a strict new greenhouse gas (GHG) emission reduction target for 2030.

The study, by consulting firm Energy & Environmental Economics (E3), was requested by California agencies — including the state air board and energy commission — as part of their PATHWAYS project to support setting a 2030 GHG target, which is expected to be debated by state lawmakers this year.

PATHWAYS is an economy-wide, infrastructure-based GHG and cost analysis tool, according to E3.

The report, a summary of which was obtained by InsideEPA/climate, is likely to be used by state agencies to set the 2030 GHG-reduction target and tailor existing and future GHG programs and policies to achieve the target, in a manner that also enables the state to reach its goal of cutting GHGs 80 percent by 2050.

Some sources believe that the study may also support calls for state policymakers to replace the current renewable portfolio standard after 2020 with a novel “low-carbon electricity standard” that would set an overall electricity-sector GHG-reduction target for 2030 and require state grid operators to prioritize energy efficiency, demand response and energy storage technologies to help stabilize and modernize California’s electricity grid.

To this end, Gov. Jerry Brown (D) in January called on the state to achieve by 2030 a 50 percent renewable power level, a 50 percent cut in petroleum use, and a doubling of energy efficiency in buildings.

The study, which may be supplemented with additional information in the coming months, finds that GHG reductions of 25-36 percent below 1990 levels “appears achievable in 2030 with a significant increase in GHG reduction efforts [and] mitigation of key risks,” according to a recent slide presentation the firm made at the University of California-Davis summarizing the report.

The firm assumes in its multi-scenario analysis that California will achieve a 50 to 60 percent renewable power level by 2030, featuring a “relatively diverse renewable portfolio of wind and solar across geographies; increased imports and exports of power across the state’s transmission interties; an increase in the flexibility and efficiency of natural gas generation and a phasing out of non-dispatchable fossil resources; an increase in ‘responsive loads,’ including flexible loads in buildings and industry and smart charging of electric vehicles; and either flexible production of low-carbon fuels from electricity or an increase in long-duration energy storage,” according to a summary of the report.

A renewable power industry source says the study includes details showing “that we will need at least as much wind [energy] as utility-scale solar in a cost-effective mix of renewables.”

All scenarios analyzed assume a doubling of energy efficiency achieved in buildings and industry by 2030; that over 50 percent of new sales of residential water heaters and HVAC systems for buildings will be high efficiency electric heat pumps by 2030 or over 50 percent natural gas demand is supplied with biogas by 2030; a rapid increase in near-zero and zero emission vehicles by 2030 — such as between 3 million and 8 million of these vehicles being on the road in 2030; and a significant increase in the use of sustainable biofuels, with a large share likely to be imported from out of state.

In addition, the study assumes a significant reduction in high global warming-potential gases such as methane and fluorinated gases.

The study also assesses and compares the cost implications of different 2030 GHG targets for households, evaluating a range of potential future technology costs and fossil fuel prices, according to the summary.

Under “base-case cost assumptions,” the average household direct cost is $8 per month in 2030. This estimate includes all direct effects, including changes in the average household’s cost of transportation fuel, electricity and natural gas bills as well as the incremental capital outlays on energy efficiency and low-carbon vehicles, the summary says.

If all commercial and industrial costs are assumed to be passed on to households, the average household cost impact is $12 per month in 2030 relative to current policy, according to the study.