SR 09-10-2019 4A
City Council
Report
City Council Meeting: September 10, 2019
Agenda Item: 4.A
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To: Mayor and City Council
From: Susan Cline, Director, Public Works, Office of Sustainability & the
Environment
Subject: Study Session on Decarbonizing Buildings Through Electrification
Recommended Action
Staff recommends that the City Council review and comment on building electrification
strategies to provide policy direction on priorities for achieving carbon emission
reductions.
Executive Summary
Local government retains an important role in regulating local land use and construction
in California communities. As a frontline leader in the fight against climate change, the
City aims to reduce communitywide carbon emissions to 80 percent below 1990 levels
by 2030. The City has outlined several strategies in the Climate Action and Adaptation
Plan (CAAP) to help achieve this goal. The most recent was joining the Clean Power
Alliance of Southern California (CPA), an electricity provider, to provide Santa Monica
residents and businesses with 100 percent green power derived from noncarbon
sources including wind and solar energy. As the electric grid supply is decarbonized, or
no longer sourced by fossil fuel power generation, natural gas use remains the last
source of carbon emissions in buildings. Building electrification (also referred to as
building decarbonization or fuel switching), another strategy included in the CAAP,
could play a key role in helping the City reduce its carbon emissions. It entails replacing
traditionally gas-fired equipment and appliances such as space heating, water heating,
cooking and drying machines with electric-powered equipment and appliances.
Decarbonizing buildings will require a host of strategies to shift the supply and demand
for all-electric equipment and installation and construction services. While some local
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governments have been active in the conversation, building electrification is still a new
field of practice and most agencies are just beginning to work on this issue.
This report will cover in detail the following strategies.
1) Local Government Leadership
a) Local Government Collaboration
b) New Municipal Construction
c) Municipal Facility Retrofits
2) Construction Codes & Policies
a) Reach Code for New Construction
b) Natural Gas Ban
c) Carbon Impact Development Fee
3) Encouraging Retrofits in Existing Buildings
a) Financial Incentives
b) Model Projects
c) Supply Chain and Workforce Development
d) Smart Grid Integration
4) Behavior Change & Marketing Campaigns
Attached to this report is a table (Attachment A) summarizing current and prospective
efforts to advance building electrification in Santa Monica. Staff request feedback and
guidance from Council to prioritize strategies and actions.
Background
In February and May of 2019, the majority of Santa Monica residents and businesses
began receiving 100% Green Power from Clean Power Alliance of Southern California
(CPA). CPA, formed by local governments, allows communities to increase the amount
of renewable electricity that supplies their buildings (customers have the ability to opt to
a lower tier of renewable electricity at lower cost, or opt out of the program entirely).
On May 28, 2019 (Attachment B), Council adopted the Climate Action & Adaptation
Plan (CAAP), which established a near term goal of reducing communitywide carbon
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emissions to 80% below 1990 levels by 2030 (80x30). The CAAP includes building
electrification as a strategy to achieve the 2030 goal. If all residents and businesses
consumed 100% Green Power, Santa Monica’s emissions could be reduced by almost
19%, which could put the City’s total emissions 35% below 1990 levels. Over a year ago
on March 27, 2018 (Attachment C), Council directed staff to pursue decarbonization by
exploring a transition to electrification.
Buildings and vehicles generate the majority of carbon emissions in Santa Monica. As
the electric grid supply is ‘decarbonized’ (no longer sourced by fossil fuel power
generation), natural gas use remains the last source of carbon emissions in
buildings. Natural gas use and vehicle fuel account for 9% and 64% of Santa Monica’s
total carbon emissions, respectively. The CAAP sets a target to reduce natural gas
emissions by 20% through electrification, which would result in a reduction of just over
10,500 metric tons of carbon dioxide equivalents. This would be roughly 1.5% of the
total emissions reductions needed to achieve the 80x30 goal.
Over the past two years, staff have been engaged with jurisdictions across the State
and the country to deepen understanding, develop strategies and coordinate efforts to
make building electrification a viable strategy.
Similarly, the State of California has signaled a desire to transition to clean electricity as
a primary fuel. Senate Bill 1477 (September 13, 2018), allocates $50 million annually in
incentives for very low emissions new buildings and for advanced clean heating
technologies. Assembly Bill 3232 (September 14, 2018), sets a tentative target of 40
percent GHG emissions reduction in California’s buildings below 1990 levels by 2030.
Past Council Actions
5/28/2019
(Attachment B)
Adopt the Final Draft of the Climate Action & Adaptation Plan
3/27/2018
(Attachment C)
Request of Mayor Winterer, Mayor Pro Tem Davis, and
Councilmember McKeown that Council direct staff to pursue
decarbonization and protect public health and safety by exploring
transition from open-flame technologies for heating and cooking
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into electrification, requiring new construction to use 100%
renewable-sourced electricity.
Discussion
Natural gas is primarily sourced from petroleum-based fossil fuels and is more than
90% methane, which is a highly potent greenhouse gas (80 times more potent than
carbon dioxide). When natural gas is burned, it creates carbon dioxide. Methane gas
must be transmitted over long distances of pipeline and stored in underground
reservoirs in order to be used in our buildings. Leaks occur throughout the system of
extraction, production, transmission and use, at a rate estimated to be between 1.4-3
percent. This unmitigated amount of methane released into the atmosphere will have
lasting impacts on the climate.
In California homes, heating and cooling combined account for 31% of total energy
use.
Fig 1. California Natural Gas End Uses by Sector
(Source: California Air Resources Board 2018 GHG Inventory; U.S. Energy Information
Administration, 2009 Residential Energy Consumption Survey and 2012 Commercial Buildings
Energy Consumption Survey)
As the City’s electricity supply becomes increasingly decarbonized from renewable
energy, eliminating the use of fossil fuels through the electrification of buildings and
vehicles becomes a key strategy to achieve carbon neutrality.
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Building Electrification
Building electrification, building decarbonization or fuel switching, entails replacing
traditionally gas-fired equipment and appliances such as space heating, water heating,
cooking and drying machines with electric-powered equipment and appliances.
Building electrification provides many benefits, including:
• Increased Efficiency: Electric heat recovery chillers, or heat pumps, are twice as
efficient as natural gas systems in providing heating and hot water.
• Cost Savings: Building electrification is becoming more cost-effective as
technologies improve and use becomes more widespread and is already economical
(in the long term, factoring in utility cost savings) in some cases. Electric heat
pumps, for example, are already cost-competitive with other technologies because
they are highly efficient and so generate utility cost savings, and because they can
replace both heating and air conditioning units. Building new all-electric single-family
homes saves in construction costs, and on utility bills. Building electrification can
also protect customers from unpredictable fluctuating and increasing fossil fuel
costs. Further, electric space and water heating can be intelligently managed to shift
energy consumption in time, aiding the cost-effective integration of large amounts of
renewable energy onto the grid.
• Environmental Benefits: Electric heating, hot water and cooling systems make use
of electricity increasingly generated by clean, renewable energy – thus generating
less air pollution and creating fewer greenhouse gas emissions than gas -fired
building systems. Electric equipment and appliances can also interact with the utility
grid, using energy during peak solar generation and conserving energy during low
solar generation.
• Health & Safety: Electric water and space heating does not come with the hazards
of gas-fired systems. Combusting natural gas generates indoor emissions, such as
carbon monoxide (CO), nitrogen oxide (NOx), fine and ultrafine particles, polycyclic
aromatic hydrocarbons (PAHs), and formaldehyde. At elevated levels, carbon
monoxide causes headaches, fatigue, queasiness, and can even be lethal. Other
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combustion pollutants can cause eye, nose, and throat irritation, and seriou s lung
disease, including cancer and other health impacts. Gas pipeline explosions have
hurt and killed people, leveling buildings and neighborhoods. The gas blowout at
Aliso Canyon storage facility lasted 118 days and released over 109,000 metric tons
of methane. The leak displaced 6,800 households and several schools. The long-
term health effects of those who were exposed may not be known for some time.
Renewable Natural Gas
SoCal Gas recently announced its vision to be the cleanest natural gas utility in North
America, by increasing the supply of renewable natural gas to 5% by 2022 and 20% by
2030 (Attachment D).
Renewable natural gas (RNG) is produced from the decay of waste in landfills,
digesters at wastewater treatment plants, dairy and agriculture operations, and other
bio-energy and synthetic options. Capturing the release of methane from these sources
is an important part of the total solutions package to California’s climate challenges.
The City currently uses renewable natural gas for its Big Blue Bus and City fleet
vehicles. The State’s Low Carbon Fuel Standard program allows for the City to generate
credits from consuming RNG that reduces the price of the fuel.
SoCal Gas recently submitted a request to the California Public Utilities Commission
(CPUC) to begin offering renewable natural gas for building use, albeit at a premium
compared to its base product. RNG is touted as a ‘drop-in fuel’ meaning that the
sustainably sourced gas is dropped into the existing pipeline network, requiring no
physical change out of building infrastructure.
RNG is scarcely available today. In 2018, less than 1% of natural gas was generated
from renewable sources compared to the 34% of electricity being supplied by renewable
energy from Southern California Edison. The potential future supply from sustainable
sources remains limited. Renewable gas is also much more expensive than fossil gas,
while renewable electricity is getting cheaper than electricity from gas power plants.
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When produced sustainably, renewable gas can play a role in reducing emissions, but
given its scarcity and high cost, it is unlikely to ever replace a large enough share of the
State’s fossil gas needs. RNG still consists largely of methane, does not resolve gas
system leakages and will not eliminate the concerns of indoor air quality or safety.
The limited supply of RNG may be better used where it is most impactful in harder-to-
decarbonize sectors, for example, in certain industrial and heavy machinery
applications.
Alternatives to Natural Gas Heating Appliances
While electric resistance heat has been a heating option for many decades, it is
inefficient and expensive to operate. Heat pumps can replace resistance heating in
many places, reducing electric consumption and customer utility bills.
Heat pumps are appliances that provide heating and cooling by moving heat from one
place to another, taking advantage of temperature differentials. Heat pumps can utilize
ambient air, refrigerants, stable ground temperatures and water to achieve this
function.
This report will focus primarily on air-sourced heat pumps (ASHP) for space heating and
cooling, and heat pump water heaters (HPWH).
An ASHP creates heat by using a refrigerant that absorbs heat from colder air and
moves that heat into a space with warmer air – much the same way that a refrigerator or
air conditioner works except that it can move heat in both directions. A cold climate
ASHP can do this even when the outdoor winter air is well below freezing. In the
summer, the process is reversed and heat is absorbed from the cooler indoor air and
moved to the warmer outdoor air.
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Since it takes far less energy to move heat than it does to create heat, air source heat
pumps are one of the most efficient home heating systems available. There are two
primary types of air source heat pumps:
1. Ductless ASHP – Each ductless system includes one outdoor unit connected to one
or more indoor units with small copper lines. These systems often come with remote
controls that allow their use for heating, cooling, dehumidification or as a ceiling fan.
Because each indoor unit can be controlled individually, you can reduce your energy
use even more by lowering the temperature in rooms that are not being
used. Ductless ASHPs are the most efficient air-source systems and are often
installed in homes and offices to supplement existing systems, usually in the most
frequently used rooms like family rooms or bedrooms or hallways that can reach
multiple rooms. Below is a diagram of a ductless system.
2. Ducted ASHP – A ducted system has an outdoor unit that is connected to a
building’s ductwork, much the same way that a furnace is connected to a home’s
ductwork. With an ASHP, the system is not creating heat, but rather moving it from
the outdoor air to the inside so that the air handler in the building’s ductwork can
circulate it throughout the building.
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A heat pump can be a great option for cooling if there is no central air conditioning,
which is typical in Santa Monica. Also, if there is a particularly cold spot or room in a
house in the winter, a single heat pump can be a very efficient space heater, while also
providing summer cooling.
The two main technologies to decarbonize domestic hot water use are heat pump water
heaters (HPWHs) and solar hot water heaters (SHWHs) with electric resistance backup.
These technologies can be used to replace fossil fuel-based water heaters, or inefficient
electric resistance heaters:
1. Electric HPWHs have become a prime candidate to help decarbonize energy use for
domestic water heating due to their high efficiency, potential use of low- or zero
carbon electricity, and cost-competitiveness. Like electric heat pumps for space
heating, HPWHs use a compression cycle to move heat from one place to another
and produce hot water. Thus, the efficiency of HPWHs is typically two to three times
more efficient than conventional electric resistance heating.
2. SHWHs can also be a viable option. While SHWHs remain expensive for a typical
unsubsidized residential-scale project, they may be cost-competitive for multifamily
buildings and other commercial facilities with large domestic hot water needs such
as hotels, hospitals, or commercial pools. Commercial sectors with the largest
savings potential from SHWHs are lodging, health, and restaurants. In these building
types, hot water energy use accounts for 20 to 60 percent of the total building
energy use. In addition, multifamily buildings, laundromats, and car washes are ideal
as they have large, constant hot water demands. The State promoted SHWHs for
the past decade through state incentives, utility programs, and federal tax credits,
and thereby increased their installation. However, high upfront capital costs remain a
major barrier: the installed costs of SHW H systems have not experienced any cost
reduction over 10 years of data collected by the California Solar Initiative (CSI)
Thermal Incentive program.
Alternatives for Cooking and Other Appliances
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Stoves and clothes dryers account for nearly all the remaining natural gas consumption
in the residential sector. Cooking appliances account for 4 percent of residential
electricity consumption, and 7 percent of natural gas consumption.
Both stoves and clothes dryers are large, expensive appliances with limited turnover.
The biggest opportunity for switching to more efficient appliances is at the time of initial
construction or during home renovations. Equipment replacement may also be
accompanied by kitchen renovation, which provides an opportunity to wire for electric
appliances.
Electric induction cooktops and convection ovens can meet customers’ performance
expectations while also increasing efficiency and lowering carbon emissions.
Glass ceramic cooktops, which generate heat through electric resistance, do not
provide the efficiency benefit of induction, but do provide an affordable alternative to
gas. Induction cooktops are different than traditional electric cooktops in that the surface
element heats the pot through an electromagnetic field rather than through radiant heat.
(The oven on an induction range is the same as other electric ovens.) The induction
process is faster and inherently more efficient, with 90 percent of the energy consumed
transferred to the food, compared to 74 percent for traditional electric and 40 percent for
gas stoves.1 Consumer Reports found induction cooktops to consistently perform as
well or better than other electric units, ranking induction cooktops among some of the
highest scoring ranges and cooktops.2 As with other electric cooktop options, induction
cooktops produce no combustion gases in the kitchen, improving indoor air quality.
Clothes dryers (combined with washers) account for 4 percent of residential electricity
consumption and 3 percent of residential natural gas consumption in California. While
dryers only account for a small portion of total annual electricity consumed in California,
they do have a high power draw. This means they have an outsized impact on the
electricity system when used during peak hours.
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There are three main types of clothes dryers that are commercially available in the
United States: electric (resistance) dryers, gas dryers, and heat pump electric dryers.
A traditional electric resistance clothes dryer operates by heating cool air, blowing it into
the drum chamber where the wet clothes are, and then venting moist hot air out of the
building. A heat pump electric clothes dryer uses a dehumidifier to condense water out
of the circulated air. Hybrid heat pump dryers have an electric element to increase
drying speed and are typically vented the same as conventional dryers. Heat pump only
dryers do not have an exhaust vent as all moisture is condensed and captured. Heat
pump electric clothes dryers use 55 percent less electricity than traditional electric
resistance clothes dryers and 30 to 40 percent less electricity than efficient ENERGY
STAR-rated electric resistance clothes dryers.
Customer savings can be magnified when paired with a high efficiency clothes washer,
which extracts more moisture from the clothes than a traditional washing machine,
reducing drying time and total laundry energy use. Some heat pump clothes dryers are
ventless, meaning that the building seal does not need to be penetrated to vent the
dryer and the dryer does not blow conditioned air out of the building. Heat pump dryers
are also slightly gentler on clothes because they operate at a lower temperature, placing
less strain on fabrics.
As with stoves, there is limited pace of equipment turnover with clothes dryers. The
average life of a clothes dryer is 13 years for both gas and electric units. Replacement
decisions are generally driven by machine quality and cost, where energy use and
savings can be an important consideration.
Costs and Benefits
Within the past year, there have been several studies on the costs and benefits of
electrification. The studies have been commissioned by various actors with their own
interests, making comparisons and generalities challenging.
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The studies show that there is a wide range of costs and variables when it comes to the
design and construction of all-electric homes and retrofitting of homes to all electric.
New homes lacking natural gas service avoid the cost of gas mains, services, and
meters not needed in all-electric construction. However, space heating and cooling
systems and water heaters require more electrical capacity than their fossil fuel
counterparts, potentially exceeding any existing building’s total electrical capacity when
retrofitting. Electrifying buildings requires not only replacing the equipment, but the
supply of energy to the equipment. Retrofits will need to address the existing building
electrical panel in order to safely support increased electricity demand. The tables
below summarize two scenarios modeled in each of the studies: s ingle family new
construction; and retrofit to all electric.
Generally, new construction saves on upfront costs and yields lifetime savings or
marginal cost increases when compared to natural gas. Retrofits can be cost effective, if
compared to a replacement of an AC unit and natural gas furnace that is already
needed. Retrofits that add new functionality for heating and cooling will increase cost
and all situations may increase costs from electrical infrastructure requirements.
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Table 1. Comparison of Electrification Studies
(Single Family New Construction All Electric vs. Mixed Fuel)
Study sponsor /
Consultant
Scenario
Location / Utility
Incremental
Capital Cost
(Negative value
equals savings)
Annual Cost
(Negative
value equals
savings)
Net Lifecycle
Costs
(Negative value
equals savings)
Negative value equals savings
California Energy
Commission / Energy
Environmental
Economics1
SoCal / SCE +
SoCal Gas
Lifecycle savings of an all-electric
home are driven by the capital
cost difference relative to a
mixed-fuel home
Low: -$200/yr
High: -$350/yr
Natural Resources
Defense Council /
Synapse Energy
Economics, Inc2
LA Basin / SCE +
SoCal Gas
Low: -$5,500
High: -$1,200
Low: -$185
High: $300
Low: -$3,461
High: -$4,802
Rocky Mountain
Institute3 Oakland / PG&E -$2,700 $400 -$2,300
California Building
Industry Association /
Navigant Consulting4
San Diego /
SDG&E
High: $468
Low: $235 $199 $230/yr
Table Notes:
1. Values estimated from Figure 3-27 of Residential Building Electrification in California:
Consumer Economics, Greenhouse Gases and Grid Impacts
2. Table 8. and estimated values from Figure 9 of Decarbonization of Heating Energy Use in
California Buildings Technology, Markets, Impacts, and Policy Solutions
3. Values estimated from Figure 14 of The Economics of Electrifying Buildings: How Electric
Space and Water Heating Supports Decarbonization of Residential Buildings
4. Table B-4 and B-14 from Impacts of Residential Appliance Electrification
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Table 2. Comparison of Electrification Studies
(Single Family Retrofit to All Electric Compared to Replacement of AC + Natural Gas Furnace)
Study Sponsor /
Consultant
Scenario
Location / Utility
Incremental
Capital Cost
Annual
Incremental
Energy Bill
Cost
Net Lifecycle
Costs
Negative value equals savings
California Energy
Commission / Energy
Environmental
Economics1
SoCal / SCE +
SoCal Gas
Lifecycle savings of an all-electric
home are driven by the capital
cost difference relative to a
mixed-fuel home
Low: -$50/yr
High: $75/yr
Natural Resources
Defense Council /
Synapse Energy
Economics, Inc2
LA Basin / SCE +
SoCal Gas
Low: -$1,500
High: $9,000
Low: -$50
High: $250
Low: -$1,281
High: $6,882
Rocky Mountain
Institute3 Oakland / PG&E -$1,200 $0 -$1,200
California Building
Industry Association /
Navigant Consulting4
San Diego /
SDG&E $7,345 Low: -$91
High: $387 $616/yr
Table Notes:
1. Values estimated from Figure 3-27 of “Residential Building Electrification in California:
Consumer Economics, Greenhouse Gases and Grid Impacts”
2. Table 8. and estimated values from Figure 9 of “Decarbonization of Heating Energy Use in
California Buildings Technology, Markets, Impacts, and Policy Solutions”
3. Values estimated from Figure 14 of “The Economics of Electrifying Buildings: How Electric
Space and Water Heating Supports Decarbonization of Residential Buildings”
4. Table B-3 and B-14 from “Impacts of Residential Appliance Electrification”
Promoting Electrification
Heat pumps for space and water heating have a small market share today; many
homes need additional electrical work to accommodate them; consumer awareness of
this heating technology option is low; and there are limited providers of installation and
repair services.
Decarbonizing buildings will require a host of strategies to shift the supply and demand
for all-electric equipment and installation and construction services. Staff have
considered various strategies and are actively working on several initiatives. Some
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measures were approved in the recently adopted Climate Action & Adaptation Plan
(CAAP). This report will cover in detail the following strategies.
1) Local Government Leadership
a) Local Government Collaboration
b) New Municipal Construction
c) Municipal Facility Retrofits
2) New Construction Codes & Policies
a) Reach Code for New Construction
b) Natural Gas Ban
c) Carbon Impact Development Fee
3) Encouraging Retrofits in Existing Buildings
a) Financial Incentives
b) Model Projects
c) Supply Chain and Workforce Development
d) Smart Grid Integration
4) Behavior Change & Marketing Campaigns
Attached to this report is a table (Attachment A) summarizing current and prospective
efforts to advance building electrification in Santa Monica.
Local Government Leadership
Local Government Collaboration
While some local governments have been active in the conversation, building
electrification is still a relatively new field of practice and most are just beginning to work
on the issue. Since late 2017, staff have participated in several workshops,
presentations and working groups with other jurisdictions across California and the
nation seeking to advance the field. These include:
• Green Cities California – A statewide membership-based organization that
hosted a 2-day workshop on decarbonization challenges and opportunities . At
the moment, this organization is not actively supporting decarbonization efforts.
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• Local Government Sustainable Energy Coalition – A statewide membership-
based organization that represents local governments before the California
Energy Commission and the California Public Utilities Commission. This
organization is actively monitoring proceedings that would impact the ability of
utilities to incentivize fuel-switching.
• Urban Sustainability Directors Network – A nationwide membership-based
organization that offers networking and peer-support groups on specific issue
areas, decarbonization/electrification being one of them. The organization’s staff
are actively engaged in working groups seeking to develop game-changing
solutions to accelerate acceptance and adoption of all-electric technologies and
systems.
• Building Decarbonization Coalition – A statewide membership-based
organization that is leading a campaign to support local jurisdictions in adopting
local energy reach codes that either require or strongly prefer all-electric
construction
Participating in these collaborations has helped staff to learn about new opportunities
and approaches to accelerating the adoption of all-electric buildings. Staff recommend
continuing participation in these low-cost activities.
New Municipal Construction
Natural gas use in City municipal facilities contributes approximately 4% of the City’s
municipal carbon emissions. The largest gas users are the Santa Monica College Swim
Center, Public Safety Facility, Big Blue Bus Maintenance Facility and the Main Branch
Library.
Requiring that newly constructed facilities do not increase the use of natural gas is
important to ensuring that the City is no longer investing in fossil fuel technology and
infrastructure.
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In July 2017, the City Manager authorized Administrative Instruction II-4-24 Sustainable
Building to require all new municipal construction projects over 10,000 square feet to
achieve Gold Certification under LEED v4 and meet Zero Energy Building Certification,
as defined by the International Living Future Institute. In order to achieve LEED v4 Gold
Certification from an energy perspective, a project:
• Must meet the minimum energy performance above the prescriptive baseline code
• May increase energy performance beyond the prescriptive baseline code
LEED v4 does not give credit to avoiding fossil fuel-based energy systems, but does
utilize kBtu (thousand British thermal units) as a metric for efficiency points. Natural gas
is more intensive by kBtu than electricity, thus electric construction could be more
favorable using this metric and rating system.
In order to achieve Zero Energy Building Certification, as defined by the International
Living Future Institute, a project:
• Must demonstrate that one hundred percent of the building’s energy needs on a net
annual basis will be supplied by on-site renewable energy. No combustion is
allowed.
This requirement ensures that the City’s larger, new municipal projects avoid natural
gas combustion entirely. The forthcoming City Services Building (CSB) served as a
model for the Administrative Instruction. The CSB is being designed and constructed to
achieve full Living Building Challenge Certification, including the Zero Energy Building
Certification. There will be no fossil fuel based systems or equipment serving this
facility.
Once completed, the CSB will become a global showcase of advanced environmental
design and construction and will achieve zero net carbon. This project will demonstrate
to the community that large commercial buildings can be designed and constructed to
be all electric.
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Municipal Facility Retrofits
In tandem with the construction of the CSB, the historic City Hall will also be undergoing
renovations. Over time, the City Hall’s rooftop air conditioning package units have been
replaced with heat pump split systems. The water heating needs are already met with
electric based instant hot water heaters. By 2021, the final rooftop unit will be
replaced, fully eliminating fossil fuels in City Hall.
Staff are seeking to identify other retrofit opportunities. Smaller heating, ventilation and
cooling (HVAC) units are relatively easy to replace in facilities like the branch libraries
and park facilities. Most of the projects could be completed by City staff or contractors
with maintenance funds. Larger facilities like the Ken Edwards Center, Public Safety
Facility and swimming facilities will need technical analysis and capital budgeting in
order to be implemented.
Once retrofitted, these municipal facilities can be used as case studies for the
community to understand the technologies and directly experience the performance and
comfort they provide.
Construction Codes & Policies
Local Energy Reach Code
Advancing sustainable technology and design has always been the focus of State
building and energy codes and the local energy reach codes enacted in Santa Monica.
In 2017, Santa Monica was the first city in the world to require zero net energy for low-
rise residential construction. This required low-rise residential projects to design an
energy efficient home (that may include gas) and offset the value of energy consumed
with an equivalent amount of rooftop solar. As the State code will change in 2020
requiring mandatory solar and encouraging zero net energy (but not requiring it), staff is
proposing a new reach code that continues to seek energy efficiency beyond the State
requirements. That proposed reach code will be presented to the Council for first
reading following the building decarbonization study session.
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In order to adopt a local reach code, the City must conduct a cost effectiven ess study
on the measures and equipment to be required and submit its proposed code and study
to the California Energy Commission (CEC). Staff have engaged with the statewide
Codes & Standards program to prepare a cost-effectiveness study and completed
stakeholder engagement on the proposed reach code. A pro-electrification coalition led
by the Building Decarbonization Coalition, Sierra Club and the Natural Resources
Defense Council have been encouraging local jurisdictions to adopt electrification -
friendly climate action plans and building codes.
Other Code Considerations
Heat pump appliances require access to a sufficient volume of air, which means they
must either be installed in a large enough room (such as a basement, large laundry
room, or garage) or be ducted to the outside. This complicates replacement, in
particular, if existing dryers or water heaters are not located within spaces that allow for
sufficient air volume. This can increase cost or otherwise complicate installation. Also,
heat pumps cool the space they are in, which can result in increased heating load in the
winter, if located indoors.
This presents a nexus for the City to develop and adopt a local building code that would
require the design and construction of spaces that can accommodate the space and
ventilation needs of HPWHs.
For existing buildings, the City would need to utilize a trigger that would require the
replacement of certain equipment with electric-based systems. Retrofit-upon-sale has
been utilized to reduce water consumption by requiring efficient toilets to be installed.
The seismic safety ordinance is a time-based trigger that requires all covered buildings
to comply by a specific time.
Natural Gas Ban
Several local governments are considering a ‘ban’ on natural gas infrastructure in new
construction. The Building Decarbonization Coalition (BDC) sponsored legal analysis
considering the potential options to restrict new natural gas demand. The analysis
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suggested that local jurisdictions have the authority to restrict natural gas through
several mechanisms:
1. Prohibit building permits for piping and/or appurtenances in buildings between
meter and appliances
2. Ban natural gas appliances, require all electric
3. Implement a carbon mitigation fee
4. Require mitigation of significant impacts through electrification (CEQA)
5. Establish indoor air pollution emissions limits
The City of Berkeley recently banned natural gas construction in new low rise residential
buildings by restricting permits for gas infrastructure based on health an d safety
implications. This approach is untested and may be subject to legal challenges.
Carbon Impact Development Fee
The recently adopted CAAP proposed assessing a development fee on new
construction and major renovations for the carbon emissions associated with the
construction and operation of buildings and facilities. Similar to the Water Neutrality
Ordinance, a carbon impact development fee could essentially mitigate all new carbon
emissions from a project. The revenue generated from the fee could then be used for
carbon reducing measures elsewhere in the City. This would require further study and
work to determine its viability and implementation.
Encouraging Retrofits in Existing Buildings
According to RMI, heat pump water heaters make up less than 1% of water heater sales
today, and their unsubsidized purchase prices are two or more times those of natural
gas water heaters. Given the current immaturity of the market for these products, and
the potential for significant economies of scale with increasing market share, their costs
are likely to decline in the future.
For newly constructed homes, heat pumps are usually the lowest -cost option,
particularly since a heat pump provides both heating and air conditioning, and these
homes avoid the cost of both furnaces and air conditioners. For retrofits of existing
21 of 29
homes, heat pumps can be lower cost than replacing both a furnace and air conditioner
separately. For homes currently using natural gas heating and only needing to replace a
gas furnace, it is usually more expensive to electrify than to continue using gas.
Financial Incentives
Financial resources, in the form of rebates and incentives, have historically fallen into
two buckets of renewable energy and energy efficiency. To date, there are no statewide
programs that support building electrification or fuel-switching. The California Public
Utilities Commission (CPUC) requires that all measures funded (by rebate or incentive)
must meet what is known as the three-prong test.
The Three-Prong Test is a set of requirements for energy efficiency programs. For
example, if a utility wants to provide rebates to customers who replace old gas water
heaters with super-efficient electric heat pumps, it must demonstrate that it will:
1) reduce energy use; 2) benefit the environment; and 3) be cost-effective. The motives
of the test are sensible. However, the test’s confusing structure and lack of clarity
regarding what exactly it takes to “pass” have meant that utilities have chosen to stay
away from any fuel-switching programs.
The CPUC has recently considered re-evaluating this test and the benefits of
electrification. Until that test is modified or removed, incentives likely would have to be
financed from local sources.
Electrification provides a unique opportunity for Southern California Edison (SCE) and
Clean Power Alliance (CPA), the City’s investor owned utility and community choice
aggregation (CCA) provider (respectively). Both operate exclusively in the electric utility
space (in contrast to Pacific Gas & Electric, Southern California Gas Company and San
Diego Gas & Electric) and have a natural interest in increasing electric demand through
electrification of buildings and vehicles.
22 of 29
SCE has announced its intentions to support electrificatio n through its Clean Power and
Electrification Pathway white paper (Attachment E) but has not yet submitted any
funding requests or program details to the CPUC.
Some examples of local incentive programs include:
• Sonoma Clean Power, a northern California CCA, is currently offering its residential
customers and recent wildfire victims up to $17,500 in incentives, in collaboration
with Pacific Gas & Electric and the Bay Area Air Quality Management District, to
encourage all-electric construction.
• Sacramento Municipal Utility District’s electrification rebate packages are worth up to
$5,000 for new homes and up to $13,750 for gas-to-electric conversions in existing
homes.
In the absence of local incentive programs, the City could offer modest incentives to fill
in the funding gap and to start building awareness and interest in the concept of
electrification. Staff are currently administering a pilot rebate program for electric vehicle
charging for multifamily buildings with a modest budget ($15,000 for pilot program;
$45,000 for the expansion). This program helps to fill a gap currently not filled by any
funding program by the State, regional agencies, utility or CCA. The Office of
Sustainability & the Environment has some funds available to pilot an incentive
program. The use of funds for this type of measure would have to be evaluated against
other measures for cost effectiveness in reducing carbon emissions.
As discussed above, the CAAP calls for a carbon impact development fee to be
assessed on new construction and major renovation projects. The fee would be
assessed based on the estimated carbon emissions from building energy use and fossil
fuel vehicle trips. Additional fees could be assessed on permits involving gas appliances
and building systems. The fees collected could be used to reduce carbon emissions
from existing gas uses in public or private facilities. As noted above, further study and
work would be required to determine the viability and implementation of any such fees.
23 of 29
The City could also encourage all-electric construction and retrofits by waiving or
reducing fees associated with plan check and permitting. The City has supported
renewable energy, energy storage and electric vehicles through streamlined permitting
and reduced fees. Fees for Building and Safety services are currently waived for
installation of:
• Gray water reuse systems
• Electric vehicle charging equipment
• Solar photovoltaic and solar-thermal heating systems
• Solar pool heating equipment
• Associated electrical service or panel upgrades dedicated to serve qualifying
equipment
Fees associated with electrical panel upgrades can be a significant added cost and
barrier to further electrification projects. Staff recommend waiving plan review and
permitting fees for all applicable City Department/Divisions services for the following
building systems:
• Electric-based water heating
• Electric-based cooking
• Electric-based space heating, ventilation and cooling
• Battery energy storage systems
• Any electrical panel or subpanel upgrades as a result of the above listed projects,
and the existing waivers
Staff believe reducing soft costs of advanced energy systems is in the public interest by
supporting further decarbonization. However, while waived or reduced fees benefit the
applicant and property owner, the City still bears the burden of staff time necessary to
review each project in addition to the lost revenue. In the present financial climate
where the City is projecting increasing budget shortfalls in the coming years, any
additional fee reductions or waivers would need to be accompanied by either
expenditure decreases or alternative revenue increases. Waived or reduced fees
provided incentives, particularly for voluntary measures by early adopters. However, as
24 of 29
measures like solar and electric vehicle charging become mandatory for certain project
categories, it may be appropriate to consider reintroducing fees to recover staff costs.
Model Projects
Electrification of buildings will require a cultural acceptance of technologies and
behavior change. Property owners are likely to be reluctant to embrace an all-electric
building without a strong familiarity, understanding and comfort level with the
technology, occupant comfort, lifestyle changes and costs. Like test -driving a vehicle,
offering a hands-on experience could encourage greater acceptance and comfort for
property owners.
Electric equipment and appliances do not provide identical amenities to their fossil fuel
counterparts, which may cause consumers to avoid them even if the economics are
favorable. For example, some people prefer to cook with natural gas; others prefer the
more even heat of electric stoves. While natural gas heat is faster and more controllable
than traditional electric ranges, electric induction heating is faster than gas and just as
controllable – though it requires different cooking habits and different cookware.
The City could potentially support model residential projects with modest financial
incentives, conduct outreach to highlight their benefits, and promote the buildings and
their property owners. These projects could serve as neighborhood information centers
for curious property owners.
The Office of Sustainability & the Environment (OSE) is currently piloting a project with
Community Corporation of Santa Monica (CCSM). CCSM is implementing a zero net
energy retrofit for a 19-unit affordable housing project. With the additional funds from
OSE, the project will be all-electric, and feature a solar and battery storage system.
The Office of Sustainability & the Environment has some funds available to pilot a grant
program. The use of funds for this type of measure would have to be evaluated against
other measures for cost effectiveness in reducing carbon emissions.
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Supply Chain and Workforce Development
The latent demand for heat pump equipment also reveals a market gap in qualified
contractors and suppliers with readily available equipment. Many property owners
replace their HVAC and water heating units only when the older system has broken
down and are in immediate need of a replacement. Heat pump equipment is not
typically available off the shelf or off the truck. This means that property owners are not
likely to consider an electric replacement during an emergency, especially if it is not
offered or promoted by the contractor.
The City could engage with local plumbers, HVAC technicians, and building contractors
to build awareness and identify barriers and opportunities. Building industry training on
how to build and maintain low-carbon buildings is a promising candidate for public-
private partnerships. Such training aligns the City’s interest in emissions reduction and
safe and comfortable buildings, the building trades’ interest in quality installations with
high customer satisfaction, and equipment suppliers’ interest in having their products
installed correctly in homes and businesses.
The City could partner with other cities and regional entities to prepare the local
workforce and shift the marketplace. The CAAP suggests partnering with Santa Monica
College and Clean Power Alliance to provide workforce training and development
opportunities in the clean energy economy.
Smart Grid Integration
Electrification of buildings will have impacts on the electric grid and electric utility,
especially when pursued in concert with transportation electrification. The impacts on
the grid from this increase in electricity consumption are highly dependent on the timing
of the demand. If electrification results in greater electricity consumption during peak
hours, it could exacerbate existing grid constraints and require additional generation
and delivery infrastructure. Additional peak demand could also increase electric sector
emissions as fossil fueled resources rise to meet the peak. On the other hand, if the
additional load is concentrated during off-peak hours, it would more efficiently utilize
existing grid infrastructure and could absorb energy during periods of surplus
26 of 29
generation, thereby reducing system costs, and putting downward pressure on
electricity rates for all customers.
Water heating electrification has parallels with vehicle electrification, because the
appliance has built-in energy storage and can be used as a grid resource. By
preheating water during hours when demand on the grid is low, electric load can be
shifted from peak hours to off-peak hours. In California, this could mean shifting
electricity demand from the evening hours to the midday hours when plenty of clean,
low-cost solar energy is available.
To some degree, homes and businesses can be pre-heated in order to shift space
heating load off of peak hours as well. This strategy is most effective in efficient
buildings with significant thermal inertia and can easily be implemented with smart
thermostats. Another option that may become increasingly available to customers is the
use of on-site battery storage to shift grid consumption to off -peak hours. As time-of-use
electric rates become more widespread in California, we expect the prevalence of on -
site storage to increase, particularly for customers with rooftop solar. These customers
can use batteries to store energy for export to the grid during the evening peak hours.
When confronted with higher peak prices, many customers may simply choose to alter
their energy usage patterns. This has been shown to be an effective strategy for
managing electric vehicle charging demand.
With California’s increasing renewable electricity sources, there is a growing need for
grid-responsive load that can help balance variable renewable sources. To that end,
energy efficiency programs could evolve to include customer-sited demand flexibility.
Electrification should include the best cost-effective control technology that will allow
grid operators to conduct California’s increasingly complex orchestra of local energy
resources, including customers’ heat pump space and water heaters.
Sonoma Clean Power, a northern California CCA program, is incentivizing smart home
grid technology like thermostats, heat pump space and water heaters, and electric
vehicle charging stations. The CAAP calls for expanding the use of distributed energy
27 of 29
resources, such as these, but the City has limited capabilities and resources to develop
and optimize such a program. The City could advocate to the Clean Power Alliance to
develop smart grid programs that include electric equipment and appliances.
Behavior Change & Marketing Campaigns
Aside from invasive and costly retrofits, residents can start – and are likely already –
using plug in electric appliances today. Such appliances include toaster ovens, pressure
cookers, hot water kettles, slow cookers, electric griddles, air fryers, induction cook
tops, portable heaters and fans.
Some appliances like air fryers, Instant Pot and induction cook tops are gaining in
popularity due to their simplicity, performance and novelty. These appliances are much
lower cost relative to the cost of replacing stoves and HVAC equipment and work well
for small dwellings, like apartments.
No analysis has been done to assess the reductio n of natural gas use as a result of
these devices, but it could be assumed that they would have a modest impact. Plug-in
space heating and cooling devices are likely adding functionality that was not
preexisting – meaning that the home probably did not have central heating and cooling
before obtaining a plug-in space heater or fan – therefore resulting in no gas use
reduction.
On November 2, 2019, the Office of Sustainability & the Environment will host the 14 th
Annual AltCar Expo. This year, staff will include displays and programming that raise
awareness about electric appliances and building electrification. Beyond education
campaigns, the City could provide incentives or offer plug-in trial appliances that
displace natural gas use as a means to encourage an all-electric lifestyle. The financial
impact to the City would be modest as most plug-in devices are relatively low cost. This
could be implemented with existing financial resources.
28 of 29
Next Steps
The strategies and technologies to reduce carbon emissions from the electricity and
transportation sectors are largely clear. The emissions from natural gas – despite being
smaller – are much more challenging to eliminate or replace. Time is of the essence to
deliver as much reductions as possible to avoid worsened climate change impacts.
Council input on the Strategies, Actions and Next Steps listed in Attachment C and
summarized above, including input on the City's desired level of engagement and
leadership on these issues, would help to guide next steps . Each effort could be
worthwhile but would also be above and beyond the existing work of staff. Prioritization
will help staff to allocate appropriate time and resources.
Financial Impacts and Budget Actions
There is no immediate financial impact or budget action necessary as a result of this
study session’s policy discussion. However, continuing to waive plan check and permit
fees for decarbonization projects does result in lost revenues. As stated previously,
pursuing building decarbonization involves a shift of capital and staff resources. Staff
will use comments received at this study session to inform priorities for decarbonization-
related projects and allocation of staff resources and return to Council as specific
budget actions are required in the future.
Prepared By: Drew Lowell, Sustainability Analyst
Approved
Forwarded to Council
Attachments:
A. Proposed Decarbonization Strategies Table
29 of 29
B. May 28, 2019 City Council Meeting (Web Link)
C. March 27, 2018 City Council Meeting (W eb Link)
D. SCE Clean Power & Electrification Pathway
E. SoCal Gas Company California's Clean Energy Future
F. Written Comment
G. PowerPoint Presentation
Proposed Decarbonization Strategies
Local Government Leadership
Action Status Potential Next Steps Impact (High, Med,
Low)
Implementation
Capacity
Local
Government
Collaboration
City staff are actively
liaising with other
jurisdictions collaborate,
learn and share tools to
advance policies, provide
incentives and transform
the market.
• Continue to lead and liaise with
the Buildling Decarbonization
Coalition, Green Cities California,
Local Government Sustainable
Energy Coalition, Urban
Sustainability Directors Network
• High
• Leverages collective
efforts and
accelerates field of
practice
• Within staff capacity
• Staff are already
engaged in these
networks
New
Construction
Administrative Instruction
(AI) virtually eliminates
fossil fuels in new
municipal projects over
10,000 sq ft
• Evaluate AI to identify loopholes
or other opportunities
• Low
• City projects are
relatively few/small
• Within staff capacity
•
Retrofits
Small HVAC
replacements will be heat
pumps going forward;
staff will identify early
replacement
opportunities
• Conduct technical analysis for
feasibility of retrofitting larger
facilities
• Medium
• Retrofits will
illuminate challenges
and opportunities
and offer showcase
to community
• Within staff capacity
• Within financial
resources: retrofits to
be undertaken with
existing maintenance
funds
Local Codes & Policies
Action Status Potential Next Steps Impact (High, Med,
Low)
Implementation
Capacity
Local Energy
Reach Code
Cost effectiveness study
has been completed for
all-electric construction
• Continue community outreach to
develop and adopt all-electric
reach code
• High
• Impacts all new
construction and
renovations; sends
signals to industry
and community
• Within staff capacity
• 2020 code adoption
imminent
Natural Gas
Ban
City of Berkeley adopted
a prohibition on natural
gas infrastructure in
buildings (July 2019)
• Observe legal strength of
Berkeley’s ban and potentially
others
• Assess feasibility of
implementing a ban and develop
ordinance for Council adoption
• High
• Could impact
hundreds of new
projects within a few
years
• Within staff capacity
Carbon Impact
Development
Fee
No action has been
taken yet
• Issue an RFP to select a
consultant to prepare a nexus
study that would justify the
• High
• Could impact
hundreds of new
projects within a few
years
• Within staff capacity
• Limited financial
resources: funds have
not yet been allocated
to this initiative
Encouraging Retrofits in Existing Buildings
Action Status Potential Next Steps Impact (High, Med,
Low)
Implementation
Capacity
Financial
Incentives
Fees currently waived for
solar PV, electric vehicle
charging stations
and associated panel
upgrades
Local incentive program:
No action has been
taken yet
• Waive fees
for building electrification projects
and associated panel upgrades
• Develop pilot program to
incentivize heat pump
replacements. Target low-income
populations
• Advocate to CPA to develop
building electrification incentives
• Medium
• Would target early
adopters – who may
have other
motivations and not
require incentives
• Beyond staff capacity:
developing and
administering an
incentive program
• Limited financial
resources: funds
allocated would come
at the expense of
other efforts
Model
Projects
One CCSM retrofit
project underway with
City funding
• Develop pilot program to
incentivize all-electric
construction or retrofit as a
community showcase.
• Low
• Requires an
inordinate amount
or resources for one
project
• Beyond staff capacity
• Requires a unique
process to select
projects and then
create community
showcase program
• Limited financial
resources: funds
allocated would come
at the expense of
other efforts
Supply Chain
& Workforce
Development
No action has been
taken yet
• Partner with local agencies to
develop workforce development
strategy
• Low/Unknown
• Supply chain
development may
not increase market
demand
• Beyond staff capacity:
intensive to develop
educational program;
staff recommend
leveraging partners
like SMC and CPA
• Would not require
expenditure of funds
Smart Grid
Integration
No action has been
taken yet
• Advocate to CPA to develop
building electrification incentives
• Issues a Request for Information
or Qualifications to identify
technologies and services for the
community
• High
• Utility-scale incentive
program would kick
off market demand
• Within staff capacity
Behavior Change & Marketing Campaigns
Action Status Potential Next Steps Impact (High, Med,
Low)
Implementation
Capacity
Kitchen
Appliance
Promotion
No action has been
taken yet
• Develop campaigns and
promotions to encourage the
adoption and use of kitchen
appliances; coordinate with
sustainable food programming
• Low/Unknown
• Cultural acceptance
is challenging to
track
• Within staff capacity
Climate change and air pollution pose serious threats. Climate change effects, such as sea level rise and
longer, more intense heat waves, are now occurring. In California, while significant progress has been made,
too many communities continue to experience asthma and other air-quality-related health issues.
California continues its leadership in addressing climate change and air pollution. The state’s greenhouse gas
(GHG) goals call for a 40 percent reduction in GHG emissions from 1990 levels by 2030 and an 80 percent
reduction by 2050 (Figure 1). Air quality goals include a 90 percent reduction in emissions of nitrogen oxides
from 2010 levels in some of the state’s most polluted areas by 2032. Meeting these ambitious clean energy
and clean air goals requires fundamental changes over the next 12 years and beyond.
The electric sector is at the forefront of the fight against climate change in California and today accounts for
only 19 percent of the state’s GHG emissions. The transportation sector (including fuel refining) and fossil
fuels used in space and water heating now produce almost three times as many GHG emissions as the
electric sector and more than 80 percent of the air pollution in California.
The Clean Power and Electrification Pathway is an integrated approach to reduce GHG emissions and air
pollution by taking action in three California economic sectors: electricity, transportation and buildings. It
builds on existing state policies and uses a combination of measures to produce the most cost-effective and
feasible path forward among the options studied.
The Pathway will help California achieve its climate goals and significantly reduce today’s health-harming air
pollution in local communities. It also has strong potential to create highly-skilled, middle-income jobs.
By 2030, it calls for:
•an electric grid supplied by 80 percent carbon-free energy;
•more than 7 million electric vehicles on California roads; and
•using electricity to power nearly one-third of space and water heaters, in increasingly energy-efficient
buildings.
(Continued)
The Clean Power and Electrification Pathway
Realizing California’s Environmental Goals
November 2017
Figure 1: Meeting California’s GHG Reduction Goals (Source: California Air Resources Board [CARB])
This paper presents Southern California Edison’s integrated blueprint for California to reduce
greenhouse gas emissions and air pollutants. Realizing the blueprint will reduce the threat of
climate change and improve public health related to air quality. It is a systematic approach
and each measure is integrated with — and depends upon — the success of the others. To
be successful, California must approach implementation as an integrated package, applying
resources across the board where most effective.
Executive Summary
2
The Clean Power and Electrification Pathway
(Continued - Executive Summary)
These electrified technologies will use zero-emission resources like solar and
wind to provide most of their power, and can in turn support the electric grid by
balancing electricity demand with supply.
The private and public sectors must work together to support customer adoption,
while ensuring electricity remains reliable and affordable, and that end-use
technologies are increasingly energy efficient. Public policy can enable the Clean
Power and Electrification Pathway through comprehensive integrated resource
planning that includes consideration of end uses of fossil fuels, through investing
cap-and-trade revenues thoughtfully, and through supporting electrification in
transportation, homes and businesses.
Southern California Edison is proud to be a long-standing partner with the state,
customers and our communities on important climate change and air quality
efforts. We look forward to continuing this broad-based partnership to pursue
practical, cost-effective approaches to achieving a bold, clean energy future.
Figure 2: Change in California GHG Emissions (Source: CARB)
Successive California policies supporting GHG emissions reductions1
1. SB 1078 (2002), SB 107 (2006), and SB X1-2 (2011) established a Renewables Portfolio
Standard (RPS), 20% by 2010 and then 33% by 2020.
2.Executive Order S-3-05 (2005) established a target of reducing GHG emissions 80% below
1990 levels by 2050.
3. AB 32 (2006) codified a GHG emissions target of 1990 levels by 2020 and created an
economy-wide cap-and-trade program.
4. SB 350 (2015) established an RPS of 50% by 2030 and added new requirements for doubling
energy efficiency and for wide scale transportation electrification deployment.
5. SB 32 (2016) codified a GHG target of reducing emissions 40% below 1990 levels by 2030.
6. AB 398 (2017) extended cap-and-trade program to 2030 and defined new offset levels.
7. CARB Proposed Scoping Plan (2017) identifies policies and tools to achieve the 2030 GHG
target.
Additional major policy measures include the Low Carbon Fuel Standard, the Zero Emission
Vehicle Program and Sustainable Community Planning.
3Southern California Edison, November 2017
Introduction
California is committed to reducing
its greenhouse gas (GHG) emissions,
improving local air quality and
supporting continued economic
growth. The state set goals to reduce
GHG emissions by 40 percent
from 1990 levels by 2030 and 80
percent from the same baseline
by 2050 (Figure 1).2 State and local
air quality plans call for substantial
improvements, such as reducing
smog-causing nitrogen oxides (NOx)
90 percent below 2010 levels by
2032 in the most polluted areas of
the state.3 Meeting environmental
goals of this magnitude will require
fundamental changes to infrastructure
and transportation and, at the same
time, can help the California economy
by creating jobs. These policy goals
cannot be achieved by the electric
sector alone.4
The Urgency of Meeting Climate
Change and Air Quality Goals
Meeting California’s pressing 2030
climate and air quality goals requires
timely, proactive decision-making by
policymakers and leaders throughout
the state. Stakeholders must quickly
align on the near-term programs
and market transformation activities
required to meet this ambitious
schedule. A systematic approach that
integrates these programs and market
activities provides the best chance of
achieving shared goals at the lowest
cost to customers and the economy.
The electric sector has provided the
majority of emissions reductions in
California (Figure 2) through energy
efficiency, the phasing out of coal,
and integration of new renewable
resources. We are ahead of pace
to reach a 50 percent renewables
portfolio standard (RPS) by 2030.5
For California to meet its 2030 GHG
target, significant emission reductions
will be required from consumers of
liquid and gas fuels — primarily in the
transportation and building sectors.
The transportation sector contributes
nearly 40 percent of California’s GHG
emissions (approximately 45 percent
when oil refining is included) and 80
percent of California’s smog-forming
NOx emissions.6 The residential,
commercial, and industrial sectors
combined contribute approximately
30 percent of the state’s GHG
emissions (Figure 3). These emissions,
as opposed to the emissions from the
electric sector, have risen by more
than 10 percent since 1990.7
A systematic
approach that
integrates these
programs and
market activities
provides the best
chance of achieving
shared goals at
the lowest cost to
customers and the
economy.
Figure 3: California GHG
Emissions by Sector in
2015 (Source: CARB)
4
The Clean Power and Electrification Pathway
Clean Power and Electrification Pathway
California has taken concrete steps to move toward a clean energy future. Market-
based policies such as the GHG cap-and-trade program and the low-carbon fuel
standard provide a solid foundation by putting a price on carbon to encourage
the most cost-effective actions to reduce or avoid GHGs. There are multiple
pathways to meet California’s 2030 climate goals, with varying levels of difficulty
and costs. Some pathways are better than others in positioning the state to
achieve 2050’s deeper carbon reduction goals. SCE explored three alternatives
(Table 1) and found that a clean power and electrification path is the most
affordable and feasible approach to reaching California’s climate and air quality
goals. This pathway also will contribute to a strong state economy and can be an
engine for creating highly-skilled, middle-income jobs.8
Table 1: Comparing 2030 Decarbonization Pathways (Source: SCE Internal
Analysis using E3 Pathways Model. Available at sce.com/pathwayto2030)Preferred Pathway
Clean Power and
Electrification
• 80% carbon-free
electricity supported by
energy storage
•At least 24% of light-duty
vehicles are EVs (7MM)
• 15% of medium-duty and
6% of heavy-duty vehicles
are electrified
•Up to 30% efficient
electrification of
commercial and
residential space and
water heating
•Dependent on broad
adoption of electrified
technologies
•Most feasible pathway
because technology
already exists
Incremental abatement cost
(last 36 MMT)*
$79/ton
Renewable Natural Gas
(RNG)
•60% carbon-free
electricity
•24% of light-duty vehicles
are EVs (7MM)
•12% of medium- and
heavy-duty vehicles use
compressed natural gas
•42% of natural gas
replaced by RNG
Hydrogen (H2)
•80% carbon-free
electricity
•22% zero-emission light-
duty vehicles (4MM H2,
2MM EV)
•4% of heavy-duty vehicles
use H2
•7% natural gas replaced
by hydrogen
•Power-to-gas not yet
commercially available
•A large biogas market
requires expensive
imports
Incremental abatement cost
(last 36 MMT)
$137/ton
•Most expensive pathway
•Requires significant H2
adoption outside of CA
•Lack of sufficient delivery
infrastructure
Incremental abatement cost
(last 36 MMT)
$262/ton
*The pathways analyzed include measures to achieve the full 2030 GHG abatement (180 MMT), such as existing state policies and
programs included in CARB’s Proposed Scoping Plan and additional measures. 36 MMT represents the last 20 percent of GHG
abatement needed to meet the 2030 target after offsets are used. This incremental abatement is incentivized by the cap-and-trade
market.
5Southern California Edison, November 2017
Figure 4: GHG Reductions Across Sectors to Reach 2030 Goals
The Vision for Clean Power
and Electrification
The Clean Power and Electrification
Pathway is an integrated approach
that builds on existing state programs
and policies to achieve California’s
climate and air quality goals, while
ensuring that an economy-wide
transformation happens in an efficient
and — importantly — affordable
way. Using existing technologies,
the Pathway calls for an electric grid
with more carbon-free energy, which
is used to clean other sectors of
the economy. As the electric supply
becomes cleaner, every electric vehicle
and electric space or water heater
becomes cleaner over its lifespan.
The Clean Power and Electrification
Pathway to 2030 is defined by three
measures. Each measure is integrated
with — and depends upon — the
success of the other and should be
pursued in concert:
1.Continue carbon reduction
in the electric sector: increase
energy efficiency, provide 80
percent carbon-free energy
through large-scale resources and
use distributed solar.
2.Accelerate electrification of the
transportation sector, including
placing at least 7 million light-duty
passenger vehicles on the roads
and supporting a transition to
zero-emission trucks and transit.
3.Increase electrification of
buildings: electrify nearly one-
third of residential and commercial
space and water heaters.
Continue Carbon Reduction in the
Electric Sector
Electric sector measures, including
providing 80 percent carbon-free
energy from large-scale resources,
and leveraging energy efficiency
and distributed solar will lower GHG
emissions from 84 to 28 million
metric tons (MMT)/year (Figure 4). This
represents 31 percent of the 2030
GHG reduction goal and aligns with
California’s pillars for carbon reduction
and decades of state energy policy.9
Large-scale renewable energy is
likely to be the most significant and
affordable means of decarbonizing
the electric supply. The transmission
grid can provide 80 percent carbon-
free energy from a combination
of renewable resources including
wind, solar and large hydroelectric
The Clean Power
and Electrification
Pathway...builds
on existing state
programs and
policies to achieve
California’s climate
and air quality
goals...
6
The Clean Power and Electrification Pathway
generators. This will require the
development of up to 30 gigawatts
(GW) of additional renewable capacity.
California’s electric system can
incorporate a high penetration of
large-scale renewable resources by
having a renewables portfolio that is
diverse in geography and resource
availability, increasing transmission
capacity, and enhancing integration
across the western grid.
Using a system that relies so heavily on
variable resources like wind and solar
will require up to 10 additional GW of
energy storage from fixed and mobile
sources to even out hourly, daily and
seasonal energy imbalances (the
differences between energy supply
and usage).
Even at today’s levels of renewables,
these energy imbalances can result
in California’s infamous “duck curve”
— the timing imbalance that exists
between solar generation and daily
peak load.10 This creates two significant
problems for today’s electric grid:
•the excess supply of solar at
midday, which can lead to shutting
down large-scale renewable
resources or paying other states
to take our power; and
•the significant fast ramp-up
in generation to reliably cover
the late afternoon and evening
electricity need as the sun sets,
solar generation fades and
customer energy demands peak.
The extremes of the duck curve
can be mitigated by the addition
of energy storage at scale. Flexible
electric vehicle charging could also
provide beneficial load shifting —
effectively a form of mobile energy
storage — that could make electric
fueling more affordable. Nonetheless,
the magnitude of the duck curve
issues is expected to increase as
more renewables are added to the
system, and some amount of gas-fired
generation will be needed for service
reliability.
Reducing or avoiding carbon in
the electric sector also requires
advances to integrate the clean
energy resources that customers
are adopting. These resources on
the distribution grid are expected to
include increased energy efficiency
(consistent with SB350’s mandate to
double energy efficiency), rooftop and
community solar, and electric vehicles.
Modernizing the distribution grid with
available and evolving technologies
will allow these distributed energy
resources to be better integrated
and optimized, will improve system
reliability and safety, and will support
our customers’ desire to participate
in the clean energy future by making
their own energy choices.
Accelerate Electrification of the
Transportation Sector
The GHG reduction potential of
the Clean Power and Electrification
Pathway hinges on aggressive
electrification of light-duty vehicles,
i.e., the passenger cars, SUVs and
pickup trucks that currently contribute
one-quarter of California’s GHG
emissions.11 The Pathway calls for at
least 24 percent of these vehicles — 7
million — to be electrified by 2030.
EVs charging from an increasingly
clean electric grid can help reduce
transportation sector GHG emissions
from 169 to 111 MMT/year, one-third
of the 2030 goal. Reduced gasoline
demand will also provide the benefit
of reducing industrial emissions from
refineries.
Electrification of the transportation
sector will greatly improve local air
quality — an urgent community need
across California and particularly
Modernizing the
distribution grid
with available
and evolving
technologies
will...support our
customers’ desire
to participate in
the clean energy
future by making
their own energy
choices.
7Southern California Edison, November 2017
Figure 5: Battery/Partial Hybrid Electric Vehicle Models
(Sources: U.S. Department of Energy/Consumer Reports)
in Southern California. Many
communities, particularly DACs*, are
situated near heavily traveled freight
corridors, where the concentration of
air pollutants often exceeds health-
based standards.†
Medium- and heavy-duty vehicles
contribute to GHG emissions and are
the largest mobile source of smog-
forming emissions across the state.
The Pathway calls for electrifying
15 percent of medium-duty and 6
percent of heavy-duty vehicles in the
state by 2030, supporting needed
GHG reductions and improvements
in air quality. This will help California
position itself for the 2050 GHG goal,
which will require the elimination of
virtually all vehicle emissions from
fossil fuels.12
While these vehicle growth targets are
ambitious, they are not far outside
forecasts of rapid growth in the EV
market.13 Growing customer interest,
increasing availability and variety of EV
models (Figure 5), and the favorable
economics of using EVs for ridesharing
and autonomous vehicles have made
a high-EV future more plausible than
ever. Nations such as the United
Kingdom, France, Norway, India and
China have announced plans to phase
out internal combustion vehicles
within coming decades. Manufacturers
are responding; GM recently indicated
that it expects the company’s entire
model lineup to run on electricity
in the future, and Volvo committed
to eliminating traditional internal
combustion engines in favor of an
electric and hybrid fleet as early as
2019.14
Expanding transportation
electrification will require sustainable
policies and collaboration between
vehicle manufacturers, charging
companies, policymakers and electric
utilities on issues such as charging
standards and consumer awareness.15
*CalEPA uses the designation Disadvantaged Community (DAC); DACs represent the 25% highest scoring census tracts in CalEnviroScreen 3.0, along
with other areas with high amounts of pollution and low-income populations.
†Electrification in areas such as the I-710 corridor between Long Beach and Los Angeles promotes environmental justice by insuring that climate
investments provide near-term air quality benefits to a broad set of communities.
Expanding transportation
electrification will require
sustainable policies and
collaboration between
vehicle manufacturers,
charging companies,
policymakers and electric
utilities on issues such as
charging standards and
consumer awareness.
8
The Clean Power and Electrification Pathway
Current codes
and standards
are based on
the 20th century
power-generation
supply framework
dominated by fossil
fuels.
Continued price incentives, funded
by the cap-and-trade and low carbo
fuel standard programs, help to low
up-front purchase costs and will
help drive additional adoption, as wil
increased selection and EV availabilit
In order to support at least 7 million
electric cars by 2030, California will
need to have over one million away-
from-home charging ports.16 The
state’s investor-owned and public
utilities have initiated charging
infrastructure pilots*17, but these pil
alone will not meet the expected sca
of light-duty EV adoption. Funding
will be needed to enable utilities and
charging companies to rapidly deplo
more infrastructure and chargers.
For medium- and heavy-duty vehicle
in urban areas with lower daily
mileage, such as buses, delivery
vehicles and intermodal freight
trucks, electrification is already being
deployed and can significantly reduc
GHG emissions and improve air
quality. Larger plug-in electric and
plug-in hybrid electric trucks are in
development18 and will play a greate
role in achieving California’s 2050
climate and air quality goals. Early
deployments must coincide with the
development of adequate charging
infrastructure to support this critical
clean-transportation opportunity.
n
er
l
y.
ots
le
y
s
e
r
Increase Electrification of
Buildings
Space and water heating currently
contributes more than two-thirds
of total residential and commercial
building GHG emissions. Electrifying
nearly one-third of residential and
commercial space and water heaters,
in addition to increased energy
efficiency and strong building codes
and standards, could reduce GHG
emissions from this sector from 49 to
37 MMT/year, or 7 percent of the 2030
goal.
Expanding electrification of residential
and commercial buildings will
require new policies and support.
Collaboration between manufacturers,
repair service providers and
policymakers is needed to raise
awareness and increase availability
of clean, efficient options for electric
space and water heating in new
building construction and retrofits.
Current building codes and standards
are based on the 20th-century
framework of power generation
supply dominated by fossil fuels.
This framework should be updated
to account for an increasingly
decarbonized electric grid.
Updated codes and standards can
advance the use of clean electric
appliances in new buildings, and
incentives can encourage adoption of
clean technologies through appliance
replacement. For instance, controllable
electric space and water heating, which
draws from carbon-free electricity
powered by solar in the middle of the
day, could be an evolution of the Zero
Net Energy (ZNE) framework toward
more carbon-focused principles for
new home construction.19
Reaching Our Goals Within
12 Years
While the Clean Energy and
Electrification Pathway is feasible,
meeting the 2030 climate goal
and also achieving significant
improvements in air quality is an
urgent challenge, requiring focused
efforts and purposeful actions across
multiple sectors of the economy
(Figure 6). Many of the needed
approvals, programs, and market
transformations require compromise
and consensus among stakeholders
with diverse agendas and priorities.
Customer adoption is also key to
success — and that adoption requires
that electricity remains an affordable
alternative to fossil fuels.
*For instance, SCE’s Charge Ready program is a $22 million pilot to increase charging infrastructure throughout the SCE service territory. The program
provides the electrical infrastructure necessary for EV charging, as well as rebates to help pay for charging stations.
9Southern California Edison, November 2017
SCE’s Clean Power and Electrification
Pathway calls for integrated actions,
programs and policies across
all sectors of the economy and
strongly links grid decarbonization
with electrification right from the
start. Planning for 2030 reduction
targets now provides a starting point
for important, necessary policies,
programs and actions needed to meet
the even more transformational 2050
climate goals.
Putting millions of electric vehicles on
California’s roads requires overcoming
current barriers, such as vehicle
affordability, customer awareness
and EV charging accessibility. Durable,
predictable incentives that lower EV
purchase prices will encourage buyers
to choose plug-in models at the end
of their gasoline-powered vehicles’
11- year life cycles. Healthier incentives
will also be needed to encourage
commercial enterprises to switch
to electricity as a fuel for buses and
delivery and intermodal trucks with
18-year average life spans. In addition,
charging station networks will need to
expand rapidly to ensure availability at
workplaces, multifamily units and along
heavily traveled corridors.
An electric system upgrade can take
as long as a decade to site, license,
build and commission. Planning often
involves a consensus-driven process
that rarely results in a quick decision.
Given this timeline, for the majority of
electric power in California to come
from renewable and distributed
energy resources by 2030, the
planning process for additional
transmission capacity, new renewable
energy development projects, grid
modernization and large-scale energy
storage investments must start now.
California’s Building Energy Efficiency
Standards are updated every three
years, at the culmination of a multi-
year planning process. Development
of the 2019 standards is nearing
completion, and planning for 2022
standards is an opportunity for
strategic discussions. Waiting until the
2025 cycle could cost California the
opportunity to decarbonize hundreds
of thousands of new homes through
electrified space and water heating, at
a lower cost than later retrofits.
Supporting the Pathway
through California Policy
Integrated Resource Planning
California has begun integrated
resource planning — a comprehensive
planning process to meet forecasted
electricity needs and GHG targets
for the electricity sector. Planning a
decarbonized grid in a cost-effective
manner requires strong coordination
and balanced trade-offs for the good
of the overall system. Provided that
its scope includes consideration of
Figure 6: Planning and Life Cycle Timeline (Source: SCE Internal Analysis)
10
The Clean Power and Electrification Pathway
the end uses of fossil fuels, this new
process has the potential for more
efficient planning decisions across
economic sectors and electric sector
technologies. This kind of planning
would include large-scale and
customer-sited renewable resources,
energy efficiency, electric vehicles,
energy storage and more.
GHG Cap-and-Trade
California’s market-based, GHG cap-
and-trade program is a critical enabler
of the Clean Power and Electrification
Pathway. Setting a price on GHG
emissions with limited offsets creates
opportunities to optimize spending
in areas that most cost-effectively
reduce or avoid GHG emissions.
The continued, direct allocation of
emissions allowances to utilities helps
ensure electricity remains affordable
and competitive with fossil fuels during
the transition to the clean energy
future.
Market-based programs could be
bolstered by new flexible policy
tools and significant funding to
spur customer choice for clean
electrification. California policymakers
should allocate additional cap-
and-trade revenues to programs
that encourage consumers to
adopt transportation and building
electrification.
Transportation Electrification
New or refreshed policies could be
enacted to smooth the pathway to
broad customer adoption of electric
vehicles. These policies could include
support for continued and expanded
consumer education, continued
incentives for EV purchases, adequate
charging infrastructure, and pricing
that keeps electric fueling costs
competitive with gasoline and diesel.
Efforts are also needed to ensure the
affordability of, and access to EVs for
mid- and low-income Californians.
Building Electrification
California’s 2022 Building Energy
Efficiency Standards could include
establishing new building standards
to promote the clean electrification
of space and water heating in homes
and businesses, as well as to require
collecting more data on fossil fuel end
uses. In addition, energy efficiency
programs could be optimized to
include a focus on their ability to
support GHG emissions reductions.
Keeping Clean Electricity
Affordable
A key consideration for many
consumers is, and will remain, the cost
of electricity. The success of the Clean
Power and Electrification Pathway
rests on implementing an integrated
package of measures that contribute
to a strong California economy and
maintain affordable electricity for all
customers.
The price of electricity and who pays
the costs must reflect the services
provided to customers. All users
of the electric grid must pay their
share to support a reliable and
increasingly clean electric system.
Policies that ensure this fairness will
help to keep electricity affordable,
which will support customer adoption
of the electrified solutions in the
transportation and building sectors.
Creating Jobs That Support the
Clean Energy Economy
A clean energy future benefits the
California economy. Many studies
suggest that the clean energy and
electrification measures described
in the Pathway will lead to higher
statewide gross product, real output,
state revenue and employment.20
Highly skilled, middle-income jobs will
be created to introduce and service
new technologies. The Clean Power
and Electrification Pathway can be a
double win — both more prosperous
and healthier — for California’s
residents.
Planning a
decarbonized grid
in a cost-effective
manner requires
strong central
coordination and
balanced trade-offs
across many parties
for the good of the
overall system.
11Southern California Edison, November 2017
Conclusion
Because of California’s size and economic complexity, it will be a major
undertaking for the state to meet its GHG goal in just 12 years. It is similarly
difficult to meet our air quality targets. As the world’s sixth largest economy,
California has a unique opportunity to create a blueprint that others can follow
for an affordable clean energy economy that improves air quality for our
communities and mitigates impacts of climate change through greenhouse gas
reductions across all energy sectors: electricity, fuels and gases.
Electric utilities are uniquely positioned to facilitate the transformation to a clean
energy economy. They have the size, scope and infrastructure assets to deliver
clean energy and support electrification for all customers. They also have the
capacity to finance prudent investments to maintain and modernize the grid,
with regulatory approval. But, they cannot do it alone. Broad decarbonization
and electrification of the economy require comprehensive policy to guide the
transformations across our economy — not just in the electric sector.
Everyone who lives, works, drives or invests in California is a stakeholder in this
effort. The results will be a new energy paradigm that will address the enormous
challenge of global climate change through the reduction of GHG emissions,
improved air quality and human health — providing access to clean energy for all
consumers.
Broad decarbonization
and electrification of
the economy requires
comprehensive
policy to guide the
transformations across
our economy — not
just in the electric
sector.
Acronyms
AB Assembly bill (California State
Assembly)
BEV battery-powered electric vehicle
CAISO California Independent System
Operator
CARB California Air Resources Board
CNG compressed natural gas
EV electric vehicle
GHG greenhouse gas
GW gigawatt
H2 hydrogen
HDV heavy-duty vehicle
MDV medium-duty vehicle
MM million
MMT million metric tons
NOx nitrogen oxide
PHEV plug-in hybrid electric vehicle
RNG renewable natural gas
RPS Renewables Portfolio Standard
SB Senate bill (California State Senate)
SCE Southern California Edison
ZNE zero net energy
Southern California Edison, November 2017
References
1.For more information on these policies, see Appendix at sce.com/pathwayto2030
2.Edmund G. Brown, Matt Rodriquez, Mary D. Nichols and Richard W. Corey, “First Update to the Climate Change Scoping Plan: Building on the Framework Pursuant to AB 32, The California Global Warming Solution of 2006,” California Air Resources Board, last modified May, 2014, accessed Sept 13, 2017. https://www.arb.ca.gov/cc/scopingplan/2013_update/first_update_climate_change_scoping_plan.pdf
3.“Vision for Clean Air: A Framework for Air Quality and Climate Planning - Public Review Draft June 27, 2012,” p. 10, California Air Resources Board, last modified June 27, 2012, accessed Oct 12, 2017. https://www.arb.ca.gov/planning/vision/docs/vision_for_clean_air_public_review_draft.pdf
4.“California Greenhouse Gas Inventory for 2000-2015 - by Sector and Activity,” California Air Resources Board, last modified June 6, 2017, accessed Sept 13, 2017. https://www.arb.ca.gov/cc/inventory/data/tables/ghg_inventory_sector_sum_2000-15.pdf
5.“California Renewables Portfolio Standard (RPS): Current Renewable Procurement Status,” California Public Utilities Commission, accessed Oct 6, 2017. http://www.cpuc.ca.gov/RPS_Homepage/
6.California Greenhouse Gas Inventory
- “Mobile Source Strategy,” p. 5, California Air Resources Board, last modified May, 2016, accessed Sept 25, 2017. https://www.arb.ca.gov/planning/sip/2016sip/2016mobsrc.pdf
7.California Greenhouse Gas Inventory
8.For more information on job creation, see Appendix at sce.com/pathwayto2030
9.The Governor’s Climate Change Pillars: 2030 Greenhouse Gas Reduction Goals, California Air Resources Board, last modified Sept 20, 2016, accessed Sept 13, 2017. https://www.arb.ca.gov/cc/pillars/pillars.htm
10.“What the duck curve tells us about managing a green grid,” California Independent System Operator, last modified 2016, accessed Sept 20, 2017. https://www.caiso.com/Documents/FlexibleResourcesHelpRenewables_FastFacts.pdf
11.California Greenhouse Gas Emission Inventory - 2017 Edition: Data Links - Download the Entire Inventory - Economic Sector Categorization [Excel-496 KB], California Air Resources Board, accessed Sept 13, 2017. https://www.arb.ca.gov/cc/inventory/data/data.htm
12.James H. Williams, Benjamin Haley, Fredrich Kahrl, Jack Moore, Andrew D. Jones, Margaret S. Torn and Haewon McJeon, “US 2050 Report: pathways to deep decarbonization in the United States,” Sustainable Development Solutions Network - A Global Institute for the United Nations, last modified Nov, 2014, accessed Sept 28, 2017. http://unsdsn.org/wp-content/uploads/2014/09/US-Deep-Decarbonization-Report.pdf
13.Adam Cooper and Kellen Schefer, “Plug-in Electric Vehicles Sales Forecast Through 2025 and the Charging Infrastructure Required,” The Edison Foundation - Institute for Electric Innovation, last modified June, 2017, accessed Sept 27, 2017. http://www.edisonfoundation.net/iei/publications/Documents/IEI_EEI%20PEV%20Sales%20and%20Infrastructure%20thru%202025_FINAL%20%282%29.pdf
14.Jack Ewing, “Volvo, Betting on Electric, Moves to Phase Out Conventional Engines,” nytimes.com, last modified July 5, 2017, accessed Sept 13, 2017. https://www.nytimes.com/2017/07/05/business/energy-environment/volvo-hybrid-electric-car.html
- “GM Outlines All-Electric Path to Zero Emissions,” General Motor Co., last modified Oct 2, 2017, accessed Oct 12, 2017. http://www.gm.com/mol/m-2017-oct-1002-electric.html
15.“Transportation Electrification: Reducing Emissions, Driving Innovation,” pp. 8-9, Southern California Edison, last modified Jan 2017, accessed Oct 12, 2017. https://www.edison.com/content/dam/eix/documents/our-perspective/201701- transportation-electrification-reducing-emissions-driving%20-innovation.pdf
16.Marc Melaina, Brian Bush, Joshua Eichman, Eric Wood, Dana Stringht, Venkat Krishnan, David Keyser, Trieu Mai, and Joyce McLaren, “National Economic Value Assessment of Plug-In Electric Vehicles Volume I,” National Renewable Energy Laboratory, last modified Dec 2016, accessed Oct 12, 2017. https://www.nrel.gov/docs/fy17osti/66980.pdf
17.“Zero-Emission Vehicles,” California Public Utilities Commission, accessed Oct 5, 2017. http://www.cpuc.ca.gov/General.aspx?id=5597
18.Marc Vartabedian, “Exclusive: Tesla’s ‘long-haul’ electric truck aims for 200 to 300 miles on a charge,” reuters.com, last modified Aug 24, 2017, accessed Oct 12, 2017. http://www.reuters.com/article/us-tesla-trucking-exclusive/exclusive-teslas-long-haul-electric-truck-aims-for-200-to-300-miles-on-a-charge-idUSKCN1B42GC
- “VW to develop electric trucks in $1.7 billion technology drive,” reuters.com, last modified Oct 11, 2017, accessed Oct 12, 2017. https://www.reuters.com/article/us-autos-trucks-volkswagen-electric/vw-to-develop-electric-trucks-in-1-7-billion-technology-drive-idUSKBN1CG1VF
19.“New Residential Zero Net Energy Action Plan Vision Framework,” 2020 Planning and Information for California ZNE Homes, accessed Oct 6, 2017. http://www.californiaznehomes.com/framework
20.For more information on job creation, see Appendix at sce.com/pathwayto2030
Electronic copies of this white paper and its
appendices are available at sce.com/pathwayto2030
1
Imagine the Possibilities
California’s Clean Energy Future
2 3
What’s Inside
Section 01
Introduction .............................................................................. 4-5
Section 02
California’s Energy Landscape ................................................ 6-11
Section 03
Achieving Environmental Goals 2030 and Beyond ................. 12-13
Section 04
Reducing Our Waste ............................................................... 14-19
Section 05
Utilizing Current Infrastructure ................................................. 20-27
Section 06
Capturing and Using Carbon ................................................... 28-29
Section 07
A Vision for the Future ............................................................. 30-35
References ............................................................................. 36-38
32
4 5
Introduction
California has led the way in setting goals to reduce greenhouse
gas (GHG) emissions and in getting consumers to be more energy
efficient. In fact, California’s energy efficiency efforts—which began
in the 1970s—have been a significant factor in the state’s per capita
electricity use remaining relatively flat over the last 40 years.
Landmark legislation passed in 2006, known as AB 32, set into law
requirements for California to reduce its GHG emissions, mandating
the state reduce its GHG emissions to 1990 levels by 2020.
California accomplished this goal four years ahead of schedule in
large part because of investments in wind and solar technologies,
aggressive energy efficiency goals, and the movement away from
coal to natural gas.
In the fall of 2018, California set its sights on achieving an even
more ambitious goal: carbon neutrality and 100 percent clean
energy by 2045. Making this vision a reality will not be easy. As
Governor Brown put it, 100 percent clean energy and carbon
neutrality by 2045: “[puts] California on a path to meet the goals of
Paris [Climate Accord] and beyond. It will not be easy. It will not be
immediate. But it must be done.”
For many, California is a test case to determine whether it’s
possible to drastically cut GHG emissions while still enjoying robust
economic growth. It’s a venture on which California is staking its
leadership, and other states are watching closely to inform future
policy decisions. To have any meaningful impact on global GHG
emissions, California—which emits less than 1 percent of global
GHG emissions—will need to develop scalable solutions that can
work and are likely to be adopted by California energy consumers,
as well as other regions of the country and around the world.
There is no clear path today to reach California’s carbon neutral
vision. The state’s investment in solar and wind technologies has
made them price competitive and is a proof point of renewable
energy innovation. Similar policies and investments have led to
advances and adoptability in battery technology. But solar, wind,
and batteries alone will not get California where it wants to go.
A more inclusive approach is going to be needed—one that
is technology-neutral, welcomes all ideas, considers all forms
of energy, and that encourages and allows for innovation. Any
energy solution will also need to factor in cost: for people to be
able to work and live here and businesses to remain, California
must find a way to achieve the state’s ambitious climate goals that
is affordable.
Such an approach requires California to think more broadly about
other forms of renewable energy, such as renewable natural gas
(RNG). We will also need to learn from and collaborate with others
in the U.S. and abroad to advance other forms of energy, such
as hydrogen, to further “decarbonize” our energy streams. These
ideas, along with technology-neutral policies that allow for the
advancement of nascent and future innovations, are what will be
needed for California to realize its carbon-neutral vision.
California has set its
boldest goal yet.
4
SoCalGas is focused on
becoming the cleanest
natural gas utility in North
America, and is committed
to 20% RNG being delivered
in our system by 2030.
6 7
This energy waste is expected to grow: CAISO estimates that by
2025, California will be wasting between 3,300 to 7,800 GWh/
year generated by solar and wind due to storage constraints.
That equates to 4 percent to 11 percent of all the electricity used
in Los Angeles County every year.16 Put in another context,
that’s enough energy to power L.A. County for more than a
month.
As the RPS requirement climbs to 50 percent and above,
these curtailments are likely to increase even more sharply.
Renewable storage is the foundation of our 2045 goal to source
all of the state’s electricity from renewable sources. Batteries,
while a part of the solution, cannot solve the intermittency
challenge alone. Batteries only hold and discharge energy for
short periods (four to six hours).
Answering Three Fundamental Questions
California’s Energy Landscape
Energy policy directly relates to many of these costs and
presents state policymakers with a challenge of addressing
competing (although not mutually exclusive) priorities—
environmental leadership, economic growth at the macro level
and the cost of living for average California families.
Extending California’s Leadership
Today, the state is looking to expand its leadership—
accelerating its climate goals by mandating emissions
reductions to 40 percent below 1990 levels by 2030 (SB 32),
committing to achieve 100 percent clean energy by 2045 (SB
100) and aspiring to achieve economy-wide carbon neutrality in
the same timeframe (Executive Order B-55-18).
For many, California is a test case for the rest of the country—an
experiment to determine whether it’s possible to drastically cut
GHG emissions while still enjoying robust economic growth. It’s
a venture on which California is staking its leadership, and other
states are watching closely to inform their future policy decisions
Success will depend on addressing three fundamental
challenges to expanding the state’s use of renewable energy:
How will we store it?
Addressing intermittency
The solution to California’s renewable future is not as simple
as generating more solar and wind power and adding them to
the grid. Wind and solar are intermittent forms of energy—they
do not provide a reliable, continuous power supply—and, most
importantly, the power they generate is not always available
when people need it most.
In fact, California today produces excess wind and solar power
that cannot be used. To avoid overloading the grid, California
either pays other states to take the excess renewable electricity
or curtails production—exactly when wind and solar are most
available. California is wasting a lot of energy. The California
Independent System Operator (CAISO), which is responsible for
managing the state’s electricity grid, reported curtailments of the
state’s solar and wind generation more than doubled from 2015
to 2017.15
California has reduced its GHG emissions by 11 percent1 since
the passage of the landmark Global Warming Solutions Act of
2006 (AB 32). These results were fueled by innovation on a
number of fronts:
Energy Efficiency
The state pioneered demand response and energy efficiency
as a central strategy to reduce its carbon footprint. Per capita
energy use has remained flat since the 1970s due to California’s
energy efficiency programs. Energy use in the rest of the U.S.,
by contrast, has increased by about 33 percent.2 Legislation
passed in 2015, known as the Clean Energy and Pollution
Reduction Act (SB 350), set California on an even more
ambitious path, requiring the state to double its energy efficiency
savings by 2030—a mandate equivalent to avoiding the annual
electricity use of 12 million households and the natural gas
consumption of more than 3 million homes.3
Renewable Electric Generation
The Renewable Portfolio Standard (RPS), along with the use of
natural gas instead of coal as a base fuel, has helped to reduce
the GHG footprint of California’s electricity sector. From 2007
to 2015, California’s consumption of coal-generated electric
power dropped 96 percent—the steepest percentage decrease
of any state.4 Still, coal has not yet been eliminated as a source
of electricity in the state. California also has reduced its use of
nuclear power. The state’s last operating nuclear power plant is
slated to close in August 2025.
Through policies, investments and incentives, the state has
built the largest solar market in the nation. Wind energy projects
totaling at least 5,454 megawatts (MW) of capacity are operating
in California today5, providing enough electricity to power more
than 2 million California households.6 This represents more than
a tripling of wind energy capacity since California’s RPS law was
adopted in 2002. Today, 20 percent of California’s total in-state
generation comes from solar and wind.
Natural gas has enabled the growth in renewable generation
by addressing intermittency issues and ensuring a continuous
power supply when renewable sources go down. For long-term
reliability, most policymakers understand that natural gas will
need to continue to play a role.
Transportation
The transportation sector continues to be California’s biggest
emissions challenge and opportunity. Since 2006, the state
has reduced emissions from the sector by nearly 10 percent.7
California introduced the Low Carbon Fuel Standard (LCFS)
during the same period, establishing the most stringent fuel
standards in the U.S. Despite these efforts, emissions from the
transportation sector increased 2 percent from 2015 to 2016, in
line with post-recession economic growth.8
Much of the state’s strategy to reduce on-road emissions has
centered on the transition to electric vehicles, but consumer
adoption has been slower than anticipated. As of May 2017,
only 300,000 zero emissions vehicles (ZEVs) and plug-in
hybrids (PHEVs) had been sold in California.9 Governor Brown
challenged California to do more, by issuing Executive Order
B-48-18. It set a target of 5 million ZEVs on California roads
by 2030, supported by a network of new electric charging and
hydrogen fueling stations.
On the economic front, California’s Gross Domestic Product
(GDP) during this same period increased by almost 16.5
percent, from $1.97 trillion to $2.3 trillion.10 Californians,
however, have not reaped all of the benefits. By a number of
other important measures, quality of life in California is not
keeping pace with the state’s GDP: Housing prices continue to
climb—with only 3 in 10 Californians able to afford a median-
priced home.11 Rent prices have increased 18 percent since
2006—with California renters paying almost 50 percent more
than the U.S. median price.12 Even with California’s leading
efficiency efforts, residents in the state still pay some of the
highest electricity rates in the nation. In November 2018,
households in the South Coast Basin paid 18.4 cents/kWh for
electricity—37 percent more than the national average.13
Californians are also experiencing a growing chasm in income
disparity, according to the U.S. Census Bureau’s 2017 American
Community Survey. California has the fourth highest level of
income inequality in the nation and ranks second in terms of the
rate in which income inequality is growing.14
To achieve dramatic
GHG reductions, we
must dramatically shift
our thinking and foster
an environment that
fuels breakthrough
innovation.
01
8 9
California for All
Enacting energy policy that works for
every Californian.
California’s high cost of living is the most important
issue facing the state, according to a public poll
conducted by the University of Southern California’s
(USC) Dornsife Center for Economic and Social Research
and the Los Angeles Times.23 It is also one of the primary
reasons people are leaving the state.24 The state’s GDP
growth paints a picture of financial stability, however, it
presents a misleading view. Today, many Californians
are struggling to make ends meet—escalating costs for
housing, healthcare, education, utilities and food are
making it difficult for them to cover the costs of their most
basic needs.
As California’s leaders look to the future and set policy to
reach the 2045 climate goals, it is critical to look beyond
the limited economic indicator of GDP and consider
affordability as a key factor in policy decisions. For
Californians on a fixed income, an increase in a monthly
utility bill could literally put them out of house and home.
Achievement of the state’s environmental goals should
not come at the price of deepening the state’s affordability
crisis and widening income disparity levels. Developing
a clean, renewable and affordable energy system should
guide California’s policies to meet the 2045 climate goals.
If California is an unaffordable place to live, we not only
burden our residents, but we are limiting our future and
our ability to keep the California dream alive.
How will we pay for it?
Addressing affordability
Expanding renewable energy in any form will be more
expensive than relying solely on traditional energy sources.
California will need to make smart decisions so that the pursuit
of the state’s climate goals does not undermine efforts to
address another important priority—namely, affordable living.
The real cost of living is already too high for too many
Californians. According to The United Way’s 2018 The
Real Cost of Living Report, nearly 40 percent of California
households are rent burdened and spend more than 30 percent
of their income on housing. After housing, utility bills are
Californians’ next biggest financial concern. This is particularly
an issue for low-income families, who spend 20 percent or
more of their monthly income on energy costs.17
It is true that the state’s investments in the wind and solar
markets have driven down the costs of wind turbines and solar
panels. Between 2009 and 2017, the price of solar panels per
watt declined by 75 percent18 while the price of wind turbines per
watt declined by 50 percent.19 That, however, has not equated to
lower electricity costs: During roughly that same period, the price
of electricity in California increased 24 percent.20
California is not an anomaly. The price of electricity soared
in other places where significant quantities of renewables
were deployed—a 51 percent increase in Germany during its
expansion of solar and wind energy from 2006 to 2016;21 and
more than a 100 percent price jump in Denmark since it began
deploying renewables (mostly wind) in 1995.22
A large portion of the future cost challenge ties back to storage.
A recent Black & Veatch analysis, found that without gas-fired
generation or significant curtailment, achieving 100 percent
renewable electricity in California will require about 25,000
GWh of capacity to store energy for weeks or months. Current
technologies are not able to store energy for extended periods
at this scale. The cost of battery storage in California will likely
be very high—$2.5 trillion by one estimate.
California’s Affordability Crisis: Why Energy
Policy Cannot Be Addressed in a Vacuum
It fluctuates, but Californians pay up
to 45% more for their electricity than
other states29
Low-income families spend 20%
of their income or more on energy
costs30
Californians pay the 2nd-highest
gasoline prices in the nation.31
On a given night, 130,000
Californians are homeless36
California accounts for 25% of the
entire nation’s homeless population37
Since 2016, California experienced
a larger increase in homelessness
than any other state38
In 2016, health spending grew
1.5 percentage points faster than
the economy33
People spent 12% more on health-
related costs in 2018 than 201634
Health spending is projected to
grow at a rate of 5.5% per year
from 2017-202635
Nearly 40% of California
households are rent burdened26
75% of Californians cannot afford
to buy a typical home in Los
Angeles County27
1 in 5 Californians pay more than
half of their income on housing28
1/3 of California households can’t
pay for their basic needs25
California has the highest effective
poverty rate in the nation32
9
02
13.1
Electricity prices in
California rose five
times more than in
the rest of the U.S.
U.S. Average
(excluding California)
California
Source: U.S. Energy Information
Administration, 2017 2011
17
15
13
10
8
201720162015201420132012
9.7 9.6
13.5
9.8
14.3
10.1
15.2
10.0
15.4
9.9
15.3
10.1
16.2
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These aren’t merely policy problems, they are
moral imperatives. And so long as they persist,
each and every one of us is diminished.”
Gavin Newsom,
Inaugural Address; January 7, 2019
10 11
With a path to 2030 in sight, the road to California’s 2045 goals
is less clear. The total expense of reaching the 2045 target,
as well as the full implications to California’s consumers, is
unknown. What is certain is that the decisions California makes
today will have far-reaching consequences across many facets
of Californians’ daily lives. Success will depend on remaining
open to all technologies and resources that can help create a
realistic and affordable path to carbon neutrality.
How will we get people to adopt it?
Addressing consumer behavior
To meet the 2045 goals, California must change consumer
thinking and behavior to increase energy conservation, shift
energy use to different times of the day and embrace clean
vehicles.
To date, California’s Clean Vehicle Rebate Project has
distributed nearly $525 million in rebates for electric vehicles.39
Despite policy efforts and investments, emissions from cars
and trucks, already California’s biggest source of GHGs, have
increased over the last several years.
The increase in vehicle emissions has been attributed to a
combination of low gas prices, a growing economy, consumers’
preference for roomier, less-efficient vehicles and a slower-than-
anticipated transition to electric models.40 As of May 2017, only
300,000 ZEVs and plug-in hybrids (PHEVs) have been sold in
California.41 That number represents just over 1 percent of the
nearly 25.5 million automobiles on California’s roads.42
One lesson from the slow adoption of ZEVs in the transportation
sector is that the more California’s GHG reduction targets rely
on consumer behavior change, the more these targets are
at risk. Preserving choice, providing affordable options and
minimizing disruption to people’s daily lives are all important
strategies to inspire consumer adoption.
How we
innovate matters.
As California policymakers set the path to achieve carbon
neutrality in less than three decades, storage, affordability
and consumer adoption should weigh significantly in the
conversation. California has the fifth-largest economy in the
world,43 even though its carbon footprint is quite small (less than
1 percent of global GHG emissions44). To lead on the global
stage—beyond setting an example—California will need to
develop scalable solutions that can work and are likely to be
adopted both here in California and elsewhere.
03
A Cautionary Tale:
Germany’s Rush to
Renewables
Germany is considered in many ways to be a leader
in addressing climate change and reducing harmful
emissions. In 2010, German leaders made the bold
declaration that they would dramatically increase
renewable energy sources with the country’s
Energiewende policy. The aggressive move to have
renewable energy sources represent 80 percent of
gross electricity consumption by 2050 went well beyond
legislation passed by the European Union.
Why is it then that GHG emissions in Germany
have not decreased for the last nine years and
emissions from the transportation sector have not
fallen since 1990?
The short answer is the government decided to
shut down all nuclear power in the country by 2022
and moved to a renewable energy future before its
infrastructure was ready.45
With renewable sources such as wind and solar, spikes
of supply and demand are often out of sync. On a
sunny or windy day, more than enough energy may be
produced when most people are away at work or school,
but by the time families return home and turn on their
lights, dishwasher and air conditioning, the sun has
set, the wind has died down and the energy generated
during the day has not been stored.
In these instances, Germany has had to turn to coal
plants to provide reliability. In fact, more than one-third
of the country’s energy supply in 2017 came from coal.
The situation is likely to be exacerbated as the country
phases out nuclear power.
Despite spending more than $600 billion on green
energy subsidies and infrastructure investments (costs
which have passed on to residential customers who
pay the highest electricity rates in the EU—about 130
percent more than California consumers pay today),
Germany is going to miss its 2020 target of reducing
CO2 emissions by 40 percent over 1990s values.
Officials admit the country will reach 32 percent at best.
11
12 13
California’s carbon-neutral future depends on leaders in
the private and public sectors embracing and developing
diverse technology solutions, bolstered by policies that foster
innovation. If California limits its options, it limits its future.
Creating an integrated, multi-faceted strategy will provide the
innovation necessary to realize California’s bold vision and
facilitate national and global adoption.
A more integrated energy system will be needed, where the
natural gas and electric systems work together to achieve
maximum emissions reductions and reliability. It will also need
to draw on the collective power of natural gas, renewable
natural gas, wind, solar, hydroelectricity, batteries, and Power-
to-Gas—as well as yet-to-be-developed technologies—to meet
the state’s energy demands, while reducing GHG emissions
and minimizing disruption and costs for Californians.
Today, there are technologies that have been tested and
proven in other parts of the world that are untapped here in
California. Complementing the state’s robust build-out of wind
and solar generation, these technologies will help maintain a
reliable, resilient and renewable energy system. They also do
not require consumers to change out existing infrastructure.
Leaders in the private
and public sectors
have the opportunity
to work together and
re-imagine how our
energy infrastructure
can operate as one
integrated system.
Achieving Environmental Goals 2030 and Beyond
13
Achieving carbon neutrality in less than three decades will require:
• Building a reliable and resilient infrastructure with utility-scale, seasonal storage
for wind and solar power;
• Inspiring rapid consumer adoption with scalable and affordable energy options;
• Setting technology-neutral policies that will drive innovation to reduce GHG emissions.
14 15
Natural gas is essentially methane (CH4)—an organic, naturally
occurring gas that comes from decomposing matter. You can
procure natural gas from the ground through drilling under-
ground (thermogenic) sources or, like electricity, you can
generate it from renewable, above-ground (biogenic) sources.
Methane is a natural byproduct of our farms, our kitchens, and
our toilets. In other words, you produce methane every day.
The largest sources of methane emissions in California—more
than 80 percent—come from agriculture, dairies, landfills and
waste water.48 We can capture those emissions, prevent them
from going into our atmosphere, and convert them to renewable
natural gas to fuel our homes and vehicles.
RNG is created by re-purposing the methane that otherwise
would be escaping into the atmosphere. This means its overall
impact on the climate is carbon-neutral or even carbon-negative.
For example, when a clean heavy-duty truck is fueled with
RNG created from a dairy, more carbon is removed from the
atmosphere than is emitted from the tailpipe.49
In addition to reducing the carbon content of our natural
gas supply, RNG gives us a clear and practical path to help
California achieve the goals set in the Short-Lived Climate
Pollutants Reduction Plan (SB 1383), by targeting the state’s
largest methane emitters. Reducing methane emissions
represents a significant portion of the California Air Resources
Board’s Scoping Plan to achieve the state’s GHG reduction
goals.50
Reducing Our Waste
Renewable Natural Gas (RNG)
For every methane molecule we take out of the atmosphere, it’s the equivalent of
removing 25 molecules of carbon dioxide (CO2) .46 Today, more than 80 percent of
California’s methane emissions come from daily human life activities that create waste.47
Renewable natural gas gives us a way to mitigate and reduce emissions from the
state’s largest methane emitters.
Capture waste
from dairies, farms
and landfills
Convert it into
biogas, using
anaerobic digestion
Process the biogas to
make it pipeline-ready
(biomethane)
Inject the biomethane
into the pipeline for
future use
Use it to fuel clean
trucks, our homes,
businesses and meet
other natural gas needs
Here’s How RNG Works
Driving Down
Emissions Through
Efficient, Distributed
Generation
Electricity is an inefficient form of energy—it loses power
as it travels over distance. Most of California’s solar
fields, wind farms and power plants are located far from
major population centers. We end up having to generate
a lot more electricity to make up for the power that is lost
over transmission and distribution lines.
Distributed generation helps to address this challenge—
it is small-scale electric generation located in the
community where the energy is used. The most familiar
example of distributed generation is rooftop solar panels
(photovoltaic systems).
Twenty years ago, opponents of solar claimed it would
never be viable in California—that the costs would be
too prohibitive. After the state invested and created
incentives, California finds itself in the situation where
distributed solar generation is a growing and critical
part of the state’s energy mix. California has similar
opportunity with other forms of distributed generation.
In fact, these technologies can enable renewable
generation and make cleaner electricity:
Fuel Cells - A battery stores electricity, but a fuel
cell can generate it. Similar to a battery, a fuel cell is
comprised of many individual cells that are grouped
together to form a fuel cell stack. When a hydrogen-rich
fuel such as clean natural gas or renewable natural gas
enters the fuel cell stack, it reacts electrochemically with
oxygen (i.e. ambient air) to produce electric current, heat
and water. While a typical battery has a fixed supply of
energy, fuel cells continuously generate electricity as
long as fuel is supplied. Fuel cells can help to mitigate
California’s fire risk as well—by supplying power in
backcountry locations using natural gas where available,
or hydrogen created through power-to-gas technology.
Combined Heat and Power (Co-Generation) -
Distributed co-generation sources use steam turbines,
natural gas-fired fuel cells, micro turbines or reciprocating
engines to turn generators. The hot exhaust is then used
for space or water heating, or to drive an absorptive
chiller for cooling such as air-conditioning. The
technology can run on renewable natural gas or low-
carbon fuels to further reduce emissions.
Waste-to-Energy - When municipal solid waste and
natural waste such as sewage sludge, food waste and
animal manure decompose, they discharge a methane-
containing gas that can be collected and used as fuel in
gas turbines or micro turbines to produce electricity as a
distributed energy resource. This power can be used in
lieu of grid power at the waste source (a treatment plant,
farm or dairy).
15
16 17
Some state leaders are pushing to transition California’s energy
supply to a single source: renewable electricity. This strategy is
perhaps most prominent in discussions around decarbonizing
California’s building sector, which receives a disproportionate
amount of attention given that the sector represents 12 percent
of the state’s total emissions,51 and that it would require replacing
existing infrastructure in millions of California homes and
businesses. But that doesn’t need to happen.
A 2018 study by Navigant Consulting shows that there is no need
to electrify California’s building sector to meet state climate goals.
The study concludes that California “should address the role of
renewable gas as part of its low-carbon building strategy.”
Adding less than 20 percent renewable gas to California’s gas
supply by 2030 can achieve the same outcome as electrifying the
entire building sector; while continuing to allow consumer choice
to meet their energy needs, as well as avoiding future building and
appliance change-out mandates.
Importantly, the study finds that reducing the carbon content of the
gas supply by adding renewable gas to displace traditional gas
can be significantly less costly, and is far more cost effective in
reducing GHGs, than building electrification.
A balanced mix of both in- and out-of-state resources (reflecting
today’s reality with both renewable electricity and renewable gas)
is three times more cost effective in reducing GHGs than any
electrification pathway.
Achieve the same GHG reductions as overhauling
100 percent of California’s buildings to all
electricity with
<20% RNG
Sourced from the likely mix of in- and out-of-state
feedstocks,
RNG is significantly more cost effective
Source: Analysis conducted by Navigant Consulting based on its 2018 report, “Gas
Strategies for a Low-Carbon California Future.” The analysis from the original published
report has been updated to reflect the 2030 60 percent RPS goal established in SB 100.
Focusing Our Efforts
Understanding the opportunities to reduce California’s carbon footprint begins with understanding the overall landscape of
the state’s GHG emissions. The transportation sector is the largest contributor to California’s GHG emissions, contributing 41
percent of the total. Next is the industrial sector at 23 percent, followed by electricity at 16 percent, and several sectors with
relatively smaller contributions, including residential buildings and commercial buildings at 7 percent and 5 percent respectively.
23%Industrial
10%Electricity In State
6%Electricity Imports
8%Agriculture
7%Residential
5%Commercial <1%Not Specified
429.4
MMTCO2e
2016 Total
CA Emissions
41%Transportation
Source: California Air Resources Board, 2018 Greenhouse Gases
Emissions Inventory, 2016 Methane Emissions.
Cost Effectiveness,
2018-2030
RNG Is More Cost-Effective
A new study demonstrates how California can reduce building sector emissions
without significant disruption to consumers.52
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Renewable
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$260
Renewable
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$251
Renewable
Gas
(Out-of-State
Supply)
$46
Renewable
Gas (Mixed In-
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Out-of-State)
$99
Electrification
(ROB, IEPR
Rates, incl.
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$472
Electrification
(ROB, High
Rates, incl.
Upgrades)
$602
Electrification
(ROB, IEPR
Rates, w/o
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$392
Electrification
(ROB, IEPR
Rates, Low
HPWH Cost, w/o
Upgrades)
$311
CR&R, one of the largest waste and recycling companies
in Southern California, has successfully put RNG to work.
They’ve built what is believed to be the world’s largest and most
automated anaerobic digester, which allows them to produce
RNG from organic waste.
The RNG CR&R produces is injected into the SoCalGas
system and used to fuel approximately 400 of their waste
hauling trucks. Converting just one of CR&R’s trash trucks from
diesel to natural gas is the pollution reduction equivalent of
taking 325 cars off the road, which means CR&R’s fleet of RNG
trucks is reducing GHG emissions by the same amount as taking
approximately 130,000 cars off the road!
This story is one example of the 40 RNG projects occurring right
now in California. RNG also allows for waste products to be
converted into new revenue streams, boosting the economy of
regions of the state—like the San Joaquin Valley—where there
are feedstock opportunities.
Near-zero-emissions natural gas engines reduce NOx
emissions up to 90 percent and GHG emissions up to
80 percent compared to diesel.53
CR&R’s RNG is fueling 400 waste trucks. That’s the
equivalent of taking 130,000 cars off the road.54
Reducing Emissions Today
CR&R Environmental provides a view into what’s possible.
ROB = Replace on Burnout IEPR = Integrated Energy Policy Report HPWH = Heat Pump Water Heater
18 19
RNG as a transportation fuel
has a negative carbon intensity
Source: California Air Resources Board (ARB), LCFS Fuel Pathways Table, February 2017. Adjusted for heavy-duty truck applications.
• By switching to renewable natural gas, we can reduce
vehicle GHG emissions by 80 percent.55
• Renewable natural gas gives us a way to prevent
emissions from biogenic sources from going into the
atmosphere, by capturing and converting them into a
renewable fuel to power our vehicles.
• Renewable natural gas produced from food and green
waste has a negative carbon intensity. That means it’s not
just carbon-neutral, it actually takes carbon out of the air.56
Carbon Intensity
Rating of Key
Transportation
Fuels
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The natural gas truck will meet California’s
ambitious 2045 targets decades before
any other technology.
Decarbonizing Agriculture:
RNG – From Poop to Power
the methane produced from the manure of more than 75,000
cows, preventing about 130,000 tons of GHGs from entering
the atmosphere each year—the annual equivalent of taking
more than 25,000 passenger cars off the road. SoCalGas will
be capable of adding up to 2.26 billion cubic feet of renewable
natural gas each year to its pipeline system from the facility.
These are examples of the many renewable natural gas projects
happening across the country. With current regulation and
incentives, it’s estimated that California has about 100 billion
cubic feet (Bcf) of renewable natural gas supply.60 Outside of
California’s borders, the U.S. is producing 1 trillion cubic feet (Tcf)
of renewable natural gas. That number is expected to increase
tenfold by 2030.61
By investing in in-state renewable natural gas projects and
expanding feedstocks to include out-of-state sources, California
can make significant progress in achieving the goals set in the
Air Resource Board’s Short-Lived Climate Pollutants Plan. It
will also provide California residents with a cost-effective way to
power their homes, businesses and cars with a clean-burning,
renewable fuel.
In one succinct statement, Microsoft founder Bill Gates57
illustrated the scope of the environmental challenge and
opportunity to reduce emissions from animal agriculture. In
California alone, livestock and dairies represent 8 percent of the
state’s GHG emissions, and more than half—55 percent—of the
state’s methane emissions.58
In October 2018, Renewable Dairy Fuels opened the nation’s
largest dairy renewable natural gas plant, in Jasper County,
Indiana. The operation collects dairy waste from 16,000 milking
cows on four farms, turning 945 tons of cow manure each day into
fuel for transportation, delivered through Northern Indiana Public
Service Company‘s (NIPSCO) natural gas pipeline system.59
In early 2019, renewable natural gas produced at a digester
facility built by Calgren Dairy Fuels in Pixley, California began
flowing into SoCalGas pipelines. Calgren’s facility, known as a
dairy digester pipeline cluster, will eventually collect biogas from
anaerobic digesters at 12 Tulare County dairies, then clean it to
produce pipeline-quality renewable natural gas. This is the first
such dairy digester pipeline cluster in California, and is expected
to be the largest dairy biogas operation in the U.S. when Calgren
adds nine additional dairies later in 2019. The facility will capture
If cows were a country, they would be
in the top five emitters in the world.”
20 21
Power-to-Gas works by taking excess electricity generated
from solar and wind, combining it with a small amount of water
and running it through electrolysis. The electrolysis process
converts the electrical energy into chemical energy and splits
the molecules into pure hydrogen and oxygen.
The oxygen can be sold and used for other applications—
such as healthcare. The hydrogen gas can be used as a fuel
or some of it can be stored in existing pipelines. Additionally,
the hydrogen can be combined with CO2 and run through the
process of methanation to create renewable methane. The
clean, renewable methane produced through the Power-to-Gas
process can be stored in the existing pipeline system for use
when people need it. That means infrastructure is already in
place to store and deliver the renewable energy at any time of
day, during any season.
We can use the hydrogen produced through electrolysis in the
Power-to-Gas process to fuel power plants and for other industrial
applications, such as metal refining and fertilizer production.
Hydrogen is also a zero-emissions fuel that can help reduce
emissions from the millions of cars and trucks on California’s
roads. Some percentage of hydrogen also can be injected into
the natural gas stream to further reduce the carbon content of the
natural gas supply.
The renewable gas produced through methanation in the Power-
to-Gas process can be delivered to Californians through the
existing pipeline infrastructure and used for cooking, as well as
for space and water heating. And, as a fuel for mobile generators,
renewable gas supports system reliability during emergency
situations. It can also be used as a transportation fuel.
Excess
renewable
energy
Combined with a small
amount of water and goes
through electrolysis, which
splits the molecule
Hydrogen & carbon combine
through methanation
Carbon captured from
factories and plants
Methane can be stored in the
pipeline for future use
Here’s How P2G Works
Utilizing Current Infrastructure
Power-to-Gas (P2G) Technology
Today, when excess electricity is generated from solar and wind, California either
has to dump it or pay other states like Arizona to take it from us. While batteries can
help store some of this excess energy, they will not solve the storage problem alone,
especially for long-term storage needs.
Rather than wasting the energy batteries cannot store, we can convert it into
renewable gases using a process called “Power-to-Gas.” Through this process, we
can use our existing natural gas infrastructure to store the renewable energy and
make it available where and when people need it.
Comparing Storage Technologies
Power-to-Gas provides large-scale, multi-day and seasonal grid storage.
Batteries Hours
Days
Months
P2G Hydrogen
P2G Methane
Hydrogen is a scalable solution to
address long-term energy storage needs
and help meet the goals set in SB 100.
1
30
21
22 23
Reality Check:
The Real Impact of
100% Renewable
Electricity
When SB 100 was signed by Governor Brown, it
challenged the California Energy System to transform
to 100 percent clean energy by 2045. To date, state
leaders have focused on electrification to achieve this
transformation—policies aimed at transitioning home
appliances, equipment and vehicles to electricity, and
decarbonizing electricity sources through increased wind
and solar power generation. Implementation of SB 100,
however, could create unintended economic hardships
and actually increase GHG emissions.
An analysis conducted by Black & Veatch underscores
the potential impact of 100 percent renewable electricity
on California, based on several scenarios with high-
level assumptions to facilitate qualitative discussions.
The findings indicated a significant cost elevation and
technical challenges associated with 100 percent
renewable electricity.
All scenarios in the analysis indicate that 100 percent
renewable electricity requires a significant increase
in renewable capacity, storage and transmission
build-out beyond California’s current infrastructure.
When specifically looking at wind, solar and energy
storage, California needs nearly a six-fold increase
beyond current wind and solar capacity at a cost of
approximately $135 billion. Additionally, there are land
availability issues associated with battery storage.
Assuming a horizontal build-out, land required for
energy storage and solar panels would be approximately
1,600 square miles, which is four times the size of the
City of Los Angeles. Cost and land availability are only
two variables; we must also look at the technological
aspects. Current battery storage technology is limited,
only allowing for a few weeks of storage. Extended
storage capability is needed to ensure reliability and
resiliency to meet variable demand loads at various
times of day and across seasons.
The analysis also warns of potential unintended
consequences of an all-electric strategy. The
electrification-only pathway will increase the cost
of electricity, which will in turn increase the cost of
electrical vehicle (EV) ownership. The increased EV
cost will drive up the sales of gasoline vehicles based on
affordability, which will likely increase emissions from the
transportation sector.
This reality check on the unintended consequences
of using a single source for energy generation
highlights the importance and the need for a robust
balanced energy policy in California. If infrastructure
cost combined with increased residential usage costs
occur because of electrification, we may solve one
problem, but create another: that is, making energy
costs unaffordable for many Californian residents and
businesses.
22
Comparison of Energy
Storage Alternatives
10 GW
1 GW
100 MW
10 MW
1 MW
100 KW
10 KW
1 KW
Mi
n
u
t
e
Ho
u
r
Da
y
We
e
k
Se
a
s
o
n
Discharge Duration
Ca
p
a
c
i
t
y
Hydrogen Storage*
Pumped Hydro
Compressed Air
Ba
t
t
e
r
y
Fl
y
w
h
e
e
l
Su
p
e
r
C
a
p
a
c
i
t
o
r
*As hydrogen or synthetic methane
Source: IEA Energy Technology Roadmap, Hydrogen and Fuel Cells
24 25
Announced in November 2018 and backed by Ofgem’s Network
Innovation Competition, the £7 million project is being led by gas
network Cadent, in partnership with Northern Gas Networks,
Keele University and a consortium of technical experts.
A groundbreaking trial that could help Britain dramatically cut its
carbon emissions and open the door to a low-carbon hydrogen
economy was recently approved by the Health & Safety
Executive (HSE).62 The United Kingdom’s HyDeploy project will
inject hydrogen into an existing natural gas network.
In a year-long pilot due to start in 2019, HyDeploy will blend up to
20 percent of hydrogen (by volume) with the normal gas supply in
part of Keele University’s gas network. Customers will continue to
use gas as they do today, without any changes to gas appliances
or pipework. Energy storage and clean fuel company ITM Power
is supplying the electrolyzer system.
ITM Power CEO Graham Cooley said, “The significance of this
announcement, allowing up to 20 percent green hydrogen to
be injected into a UK gas network, is hard to overstate. Power-
to-Gas in the UK is under active consideration by all gas grid
operators and its significance as an energy storage technique is
growing globally. This announcement is an important advance.”
The UK’s First Practical
Demonstration of Hydrogen
Britain explores Power-to-Gas and green hydrogen to reduce emissions.
Battery storage may feel like a headline act in the transition. But ultimately it will play second fiddle to hydrogen.”
25
Francis O’Sullivan,
Head of Research at the MIT Energy Initiative
Network
Mobility
Heat
Hydrogen
Storing
Renewable
Energy
26 2726
UC Leads the Way to
Carbon Neutrality
The University of California recently announced ambitious
plans to be carbon neutral by 2025—and renewable natural
gas and hydrogen will play a significant role in achieving its
goal.
As part of its strategy, UC has set a target for at least 40
percent of the natural gas combusted on-site at each campus
and health location to be fueled by biogas by 2025.63
The UC system is already a consumer of biogas at multiple
campuses. For example, UC San Diego purchases biogas
credits from a sewage treatment plant on Point Loma,
about ten miles away. Biogas from the plant is injected
into the natural gas pipeline system on Point Loma where
it displaces conventional gas; UC San Diego then draws
conventional gas to power a fuel cell. The credits allow the
fuel cell to qualify as a renewable energy source, earning
valuable financial treatment under California policy.
UC also is a leader in pioneering Power-to-Gas technology.
Research conducted at the University of California Irvine
(UCI) and funded by SoCalGas demonstrated in 2017
that the campus micro-grid could increase the portion of
renewable energy it uses, from 3.5 percent to 35 percent,
by implementing a Power-to-Gas strategy.64
Using Power-to-Gas, UCI demonstrated
it could increase its renewable energy
use from 3.5 percent to 35 percent.
The study used data from the UCI campus micro-grid, which
includes solar panels that produce about 4 megawatts of
peak power. Simulations showed that by storing excess
solar power on sunny days and using an electrolyzer to
produce renewable hydrogen, the micro-grid could support
an additional 30 megawatts of solar panels.
“The ability to increase the mix of renewables on campus
by tenfold is truly significant,” said Jack Brouwer, professor
of mechanical & aerospace engineering and civil &
environmental engineering at UCI and associate director
of the Advanced Power & Energy Program (APEP). “With
Power-to-Gas technology, you don’t need to stop renewable
power generation when demand is low. Instead, the excess
electricity can be used to make hydrogen that can be
integrated into existing natural gas pipeline infrastructure
and stored for later use. The Southern California Gas
Company system alone is made up of over 100,000 miles
of pipeline. This study suggests that we could leverage that
installed infrastructure for storage and significantly increase
the amount of renewable power generation deployed in
California.”
27
28 29
Initiative, the market for products made from CO2 could be more
than $800 billion and use 7 billion metric tons of CO2 per year
by 2030—the equivalent of approximately 15 percent of current
annual global CO2 emissions.
CCU technologies follow the sustainability principles of reduce,
repurpose and recycle—they simply recycle the carbon in fossil
fuels: Once the fuel releases energy, the waste is saved to
be reused where it is needed, and the use of fossil carbon is
reduced. CCU will become an increasingly important strategy for
California to achieve carbon neutrality.
CCU is a simple concept: Gas and particle waste produced
from industrial sources like power plants, steel making or
other factories is first captured. The carbon from that waste
is then extracted using chemical processes and reused as
the raw material for new products. Reusing this carbon not
only decreases CO2 emissions into the atmosphere, but also
decreases fossil fuel use.
Many CCU technology companies are beyond the development
stage and in the market growing their businesses. One California-
based company is making plastics from captured carbon instead
of petroleum. A Canadian company is using carbon captured from
power plants to make stronger concrete. And a German company
uses waste CO2 to make polymers. According to the Global CO2
Capturing and Using Carbon
Here’s How CCU Works
Energy Crops
High biomass yield
Extensive availability
Biomass residues
Capture
compression
transport
CO2
CO2
Saline aquifers
Depleted oil and gas fields
Fuel upgrading:
gas cleaning,
liquefaction
Combustion
Fermentation
Aerobic digestion
Gasification
Heat
Biohydration
Biomethane
Synthetic biofuels
Electricity
Geological
storage
Energy
Products
Non-energy
byproducts
Carbon Capture and Utilization (CCU)
Carbon is the building block of life. Many of the products we use every day—our computers and
smart phones, our cars and the plastic Tupperware in our kitchens—are made with carbon.
With CCU, we can take the carbon dioxide (CO2) released from industrial processes, capture it
and recycle it as a raw material to produce these products. The carbon can also be combined
with hydrogen to form renewable gas to fuel homes, businesses and vehicles.
Carbon to Value
An innovative process technology is producing
clean hydrogen and solid carbon.
The potential of hydrogen as a transportation fuel is great,
based on its ability to power zero-emission fuel cell electric
vehicles (FCEVs), its fast filling time and high efficiency.
But sourcing the hydrogen has been a barrier to the
market really taking off.
Today, almost all of the world’s hydrogen is produced
from natural gas through the process of steam methane
reforming—in this process, methane reacts with steam
under pressure in the presence of a catalyst to produce
hydrogen and carbon dioxide (CO2), a greenhouse gas.
John Hu, West Virginia University’s Statler Chair
Engineering Professor, recently invented a technology
to convert natural gas into CO2-free hydrogen and solid
carbon. A commercialization team has received funding
from the U.S. Department of Energy to further develop the
innovative new process technology.
The objective of the team—which includes, C4-MCP, LLC
(C4), a Santa Monica-based technology start-up, West
Virginia University, Pacific Northwest National Laboratory,
and SoCalGas—is to bring to market cost-effective ways to
drive down emissions from hydrogen production, ultimately
making hydrogen fueled cars and trucks cost-competitive
with conventional gasoline and diesel vehicles.
In addition to CO2-free hydrogen, the other by-product of
the innovative process technology is solid carbon, which
can be used as a raw material to manufacture a number
of products we use every day, from the batteries in our
computers, to the tires on our cars, to the inks in our
printers.
“The research will lead to transformative advancement in
science and engineering, in addressing not only climate
change issues but also energy inefficiency issues in
natural gas conversion to value-added products,” said Hu.
It’s just one example of many research projects underway
today that showcase the tremendous environmental and
economic potential of CCU technologies.
29
30 31
United Kingdom
Cadent and Northern Gas Network’s
HyDeploy pilot will kick off in 2019,
blending to 20 percent of hydrogen (by
volume) with the normal gas supply in
part of Keele University’s gas network.
United States
Renewable Dairy Fuels (RDF) is producing
renewable natural gas from dairy waste and
delivering renewable natural gas into the
NIPSCO natural gas pipeline system to be used
as transportation fuel. The facility is located in
Jasper County, Indiana, and is now the largest
dairy project of its kind in the country.
France
• Construction on France’s first industrial-
scale Power-to-Gas demonstrator, Jupiter
1000, began last year at Fos-sur-Mer. Led by
GRTgaz, the project is designed to convert
surplus electricity generated by wind farms in
the surrounding region into green hydrogen
and methane syngas. The demonstrator
will have a total generating capacity of 1
Megawatt electric (MWe).
• The “Les Hauts de France” project, an
ambitious Power-to-Gas project, aims to build
five massive hydrogen production units (100
MW each) over a five-year period.
• French hydrogen specialist HDF Energy has
launched the Centrale électrique de l’Ouest
guyanais (CEOG) project, which promises
to be one of the world’s largest solar-plus-
storage power plants.
• French utility Engie plans to switch all of
its gas operations to biogas and renewable
hydrogen by 2050, making it 100 percent green.
Canada
2018 marked the opening of North America’s
first Power-to-Gas energy storage facility using
hydrogen. The Markham Energy Storage Facility
is now providing regulation services under contract
to the Independent Electricity System Operator
(IESO) of Ontario, Canada.
30
It’s Time to Put
California on the Map
Countries around the world are embracing an inclusive energy
strategy that uses all resources available to reduce emissions,
increase renewable energy and solve intermittency issues with
long-term storage through Power-to-Gas technologies.
Denmark
Denmark could be the first European country
to become independent of natural gas and
cover its consumption entirely through gas
produced from food waste, industrial waste
and agricultural by-products.
India
India plans to build 5,000 compressed biogas
plants over the next four years to curb oil
imports and improve farm incomes. The move is
in line with the government’s target of reducing
crude oil imports by 10 percent by 2022.
Australia
The Australian government is providing half the
funding for the country’s largest facility to produce
hydrogen using solar and wind energy. The project is
being run by gas pipeline company Jemena, which
plans to build a 500 kilowatt electrolyzer in western
Sydney that will use solar and wind power to split
water into hydrogen and oxygen.
Germany
• The German grid operators TenneT, Gasunie
Deutschland and Thyssengas have put forward
detailed plans for coupling the electricity and gas
grids and advancing the energy transition. The three
grid operators are planning to build a power-to-gas
pilot plant in Lower Saxony. With an output of 100
megawatts, it will be the largest of its kind in Germany.
• Major German power and gas grid firms Amprion and
Open Grid Europe (OGE) are jointly building large
Power-to-Gas plants in the next decade.
31
Africa
The Africa Biogas Partnership Programme (ABPP)—a
partnership between Hivos and SNV—is working to
construct 100,000 biogas plants in Ethiopia, Kenya,
Tanzania, Uganda, and Burkina Faso providing about half a
million people access to a sustainable source of energy.
32 33
The Case for An Integrated Approach
Preserves
Consumer Choice
Today, Californians enjoy a choice of energy sources for
their homes and businesses, including gas, electricity and
propane. Millions of Californians use natural gas in their
homes. In SoCalGas’ service territory, roughly 90 percent of
the homes use natural gas because it’s an efficient, reliable
and affordable option for home and water heating, drying
clothes and cooking.65 Energy users should have a choice
of which appliances and energy to use in their daily lives,
especially if it can be done in an environmentally friendly
way.
Promotes
System Resiliency
Resiliency in the energy system is critical. By maintaining
a diverse energy portfolio, California can minimize
interruptions in energy supply caused by climate change
impacts, such as increased wildfires. Communities over-
reliant on the electric grid risk losing critical tools needed
for emergency response. Natural gas gives communities
the resiliency to respond to nature’s worst disasters.
Minimizes
Disruption & Cost
An inclusive, integrated pathway that includes natural gas and
renewable natural gas as a continuing source of energy to meet
the state’s energy needs is minimally disruptive to consumers.
By replacing less than 20 percent of California’s natural gas
supply with renewable natural gas, California can achieve the
same GHG reductions as electrifying 100 percent of the state’s
buildings.66 The implications are profound: consumers do not
need do anything—no mandates to switch out appliances, no
need for costly upgrades to homeowners’ electrical panels.
Mandating electrification would require millions of people to
retrofit their homes and replace their natural gas appliances,
costing the average family $19,000.67
Strengthens
California’s Economy
The Los Angeles area is the largest manufacturing region in the
United States. Many industrial processes, from manufacturing
steel to producing fertilizer, cannot be electrified. If those jobs
are to remain in the state, California will need to create policies
that allow energy options for these businesses and industries.
An inclusive approach that does not limit current energy options,
is technology neutral, expands nascent technologies, allows for
innovation and factors in costs will help keep these industries
and their associated jobs in the state.
32
90%
of homes in SoCalGas’
service territory use
natural gas
<10%
of voters would choose
an all-electric home
80%
of voters oppose
prohibiting the use
of gas appliances
2/3
of voters oppose
eliminating natural gas
Sources: California Energy Commission (2009) “California Residential Appliance Saturation Study.”
Navigant Consulting (2018) “Gas Strategies for a Low-Carbon California Future.”
California Building Industry Association (2018) and Navigant Consulting, “The Cost of Residential Appliance Electrification.”
33
34 3534
Working together, we can create measurable progress toward a carbon-neutral future To achieve a dramatic decrease in GHG emissions, leaders in
California’s private and public sectors must dramatically shift their
thinking and foster an environment that will fuel breakthrough
innovation. We need to use all technologies available to us today and
should not close the door on potential technology pathways that may
lead to exponential emissions reductions in the future.
Creating a clean, decarbonized and sustainable energy future requires
an inclusive technology strategy if California is going to meet its
climate goals and maintain system resiliency. Implementing a balanced
energy approach allows California to minimize disruption, manage cost
and preserve consumer choice.
2022
5% RNG
being delivered
in our system
To become the cleanest natural gas utility
in North America
2030
20% RNG
being delivered
in our system
Our Commitments
Our Vision
35
36 37
References
1. California Air Resources Board (ARB), 2018 Greenhouse Gas Emissions Inventory, with emissions data from 2000-2016. The inventory reports the state’s overall GHG
emissions decreased from 482.7 MMTCO2e in 2006 to 429.4 MMTCO2e in 2016.
2. California Public Utilities Commission (CPUC), Energy Efficiency Reports (http://www.cpuc.ca.gov/energyefficiency/).
3. Chhabra, Mohit, “California Establishes a Path to an Energy Efficient Future,” Natural Resources Defense Council (NRDC). November 27, 2018.
4. U.S. Energy Information Administration, Electric Power Annual, “Electric Power Consumption of Coal by State, 2007 and 20015.”
5. Data compiled by CalWEA from the U.S. Wind Turbine Database. See https://eerscmap.usgs.gov/uswtdb/ (accessed on May 15, 2018). Tule Wind Project capacity
added to total for San Diego County based on public reports. Note that the U.S. Wind Turbine Database does not include capacity data for some pre-1990 wind projects,
which could add a few hundred megawatts.
6. Calculated by CalWEA based on California Energy Commission data.
7. California Air Resources Board (ARB), 2018 Greenhouse Gas Emissions Inventory, with emissions data from 2000-2016. The inventory reports GHG emissions from the
transportation sector decreased from 193.47 MMTCO2e in 2006 to 174.01 MMTCO2e in 2016.
8. California Air Resources Board (ARB), “California Greenhouse Gas Emissions for 2000 to 2016: Trends of Emissions and Other Indicators – Executive Summary,” 2018
9. California Energy Commission (CEC), “Zero-Emission Vehicle and Infrastructure: Tracking Progress,” July 5, 2017.
10. U.S. Department of Commerce, Bureau of Economic Analysis, 2018.
11. California Association of Realtors, “California Housing Affordability Update: Traditional Housing Affordability Index, Q3-2018.”
12. United States Census Bureau, “American Community Survey,” 2017 Data Release.
13. U.S. Bureau of Labor Statistics, “Average Energy Prices, Los Angeles-Long Beach-Anaheim—November 2018.” It is important to note that while Californians pay more
for their electricity, they use less of it. The lower monthly usage stats contribute to Californians having relatively lower monthly electricity bills than residents in other
states (a function of usage, not wholesale cost).
14. Martin, Emmie, “US States with the Highest Levels of Income Inequality,” CNBC, March 12, 2018.
15. California Independent System Operator (CAISO), Curtailment Fast Facts and Wind & Solar Curtailment Report. In 2015, California curtailed more than 187 Gigawatt
hours (GWh) of solar and wind generation. In 2016, curtailment increased to more than 308 GWh. In 2017, curtailment increased again to 380 GWh of solar and wind
generation. The increase from 187 GWh to 380 GWh represents a 103 percent jump.
16. Ibid.
17. Adam Chandler, “Where the Poor Spend More Than 10 Percent of Income on Energy,” 2016.
18. National Renewable Energy Laboratory, “U.S. Solar Photovoltaic System Cost Benchmark: Q1 2017.”
19. BloombergNEF, “Wind Turbine Prices in U.S. Plummet Faster Than Globally,” October 3, 2017.
20. U.S. Energy Information Administration, 2017.
21. Environmental Progress, “Clean Energy in Crisis,” (http://environmentalprogress.org/germany/), April 2018.
22. Danish Energy Association (http://www.pfbach.dk/firma_pfb/pfb_skyrocketing_electricity_cost_2014.pdf)
23. Statewide, online poll conducted by USC Dornsife Center for Economic and Social Research/LA Times Poll among 1,504 Californians Oct. 27-Nov 6. The poll’s margin of
sampling error is plus or minus 3 percentage points for all eligible voters, and plus or minus 4 percentage points among registered voters. Results are among registered
voters, unless otherwise indicated.
24. U.S. Census Bureau data. From July 2016- July 2017, California saw a net loss of just over 138,000 people. See also Public Policy Institute of California: “Over the past
20 years, California has experienced its slowest rates of growth ever recorded and an unprecedented migration of residents to other states. From 2006 to 2016, 1.2
million more people left California for other states than came to California from other states.”
25. The United Way, “The Real Cost of Living Report,” 2018.
26. Ibid.
27. California Association of Realtors, Housing Affordability Index. The typical Los Angeles County home is priced at $553,330. Figuring in the costs of property taxes and
insurance, the average mortgage payment equates to $2,790/month, requiring an annual income of $111,730—an amount 25 percent of the state’s population earns.
28. California Budget & Policy Center, sourcing data from Budget Center analysis of US Census Bureau, American Community Survey Data, September 2017.
29. U.S. Bureau of Labor Statistics, “Average Energy Prices, Los Angeles-Long Beach-Anaheim—November 2018.” It is important to note that while Californians pay more
for their electricity, they use less of it. The lower monthly usage stats contribute to Californians having relatively lower monthly electricity bills than residents in other
states (a function of usage, not wholesale cost).
30. Adam Chandler, “Where the Poor Spend More Than 10 Percent of Income on Energy,” (2016)
31. U.S. Energy Information Administration, Retail Prices for Gasoline, 2018.
32. The United Way, “The Real Cost of Living Report,” 2018.
33. National Health Expenditure (www.cms.gov)
34. Ibid.
35. Ibid.
36. CALMatters, citing data from the U.S. Department of Housing and Urban Development. June 27, 2018.
37. Ibid.
38. Ibid.
39. California Air Resources Board (ARB), Public Workshop on the Fiscal Year 2018-19 Funding Plan for Clean Transportation Incentives, June 15. 2018.
40. Barboza, T. and Lange, J., “California hit its climate goal early — but its biggest source of pollution keeps rising,” Los Angeles Times, July 23, 2018.
41. California Energy Commission (CEC), “Zero-Emission Vehicle and Infrastructure: Tracking Progress,” July 5, 2017.
42. State of California, Department of Motor Vehicles, Statistics for Publication, January through December 2017. Registered automobiles state-wide.
43. Segarra, Lisa Marie, “California’s Economy Is Now Bigger Than All of the U.K.” Fortune, May 15, 2018.
44. Fridrich, Ge, Pickens, “Explore the World’s Greenhouse Gas Emissions,” World Resources Institute, April 7, 2017. Based on data from online data visualization tool on
the Climate Watch Platform.
45. Germany: Nikolewski, Rob, “Is California going the way of Germany when it comes to energy?” The San Diego Union-Tribune, November 11, 2018.
46. U.S. Environmental Protection Agency (EPA), 2017.
47. California Air Resources Board (ARB), 2018 Greenhouse Gases Emissions Inventory, 2016 Methane Emissions.
48. Ibid.
49. Bioenergy Association of California, “Decarbonizing The Gas Sector: Why California Needs A Renewable Gas Standard,” November 2014.
50. California Air Resources Board (ARB), “California’s 2017 Climate Change Scoping Plan: The Strategy for Achieving California’s 2030 Greenhouse Gas Target,”
November 2017.
51. California Air Resources Board (ARB), 2018 Greenhouse Gases Emissions Inventory, 2016 Emissions.
52. Navigant Consulting, “Gas Strategies for a Low-Carbon California Future,” 2018. California Building Industry Association (CBIA) and Navigant Consulting, “The Cost of
Residential Appliance Electrification,” 2018. Navigant’s analysis was based on a 50 percent RPS goal for 2030. Additional, preliminary analysis based on the 60 percent
RPS goal established by SB100 indicates: California can achieve a 30 percent emissions reduction in the building sector by 2030 with approximately 6 percent RNG
throughput; and with approximately 18 percent RNG throughput, can achieve the same GHG emissions as electrifying all of California’s buildings. Cost effectiveness
measures under the new 60 percent RPS goal indicate RNG is still at least twice as cost-effective as building electrification.
53. The Cummins-Westport 2018 ISX12N engine is certified to the California Air Resources Board (CARB) and Environmental Protection Agency’s (EPA) Optional Low NOx
emissions standard of 0.02 g/bhp-hr and has 90% fewer NOx emissions than the current North American EPA standard. Cummins-Westport ultra-low-NOx trucks are
virtually GHG emissions-free when fueled with renewable natural gas.
54. PRNewswire, “Renewable Natural Gas Produced in California by CR&R Flows into SoCalGas Pipelines for First Time,” July 2, 2018. The cars equivalence number was
figured using the U.S. Environmental Protection Agency’s (EPA) Greenhouse Gas Equivalencies Calculator.
55. The Cummins-Westport 2018 ISX12N engine is certified to the California Air Resources Board (CARB) and Environmental Protection Agency’s (EPA) Optional Low NOx
emissions standard of 0.02 g/bhp-hr and has 90% fewer NOx emissions than the current North American EPA standard. Cummins-Westport ultra-low-NOx trucks are
38 39
virtually GHG emissions-free when fueled with renewable natural gas.
56. Bioenergy Association of California, “Decarbonizing The Gas Sector: Why California Needs A Renewable Gas Standard,” November 2014.
57. Bill Gates, Stanford Global Energy Forum, November 2018.
58. California Air Resources Board (ARB), 2018 Greenhouse Gases Emissions Inventory, 2016 Methane Emissions.
59. Pete, Joseph S., “Nation’s Largest Dairy Renewable Natural Gas Project Launched in Jasper County,” NWI Times, October 26, 2018.
60. ICF Study, “Re-Assessment of Renewable Natural Gas,” 2016.
61. U.S. Department of Energy (2016). 2016 Billion-Ton Report: Advancing Domestic Resources for a Thriving Bioeconomy, Volume 1: Economic Availability of Feedstocks.
Oak Ridge National Laboratory, Oak Ridge, TN.
62. Sampson, Joanna, “First-of-its-kind UK hydrogen trial gets the green light,” Gas World, November 6, 2018.
63. University of California – Policy on Sustainable Practices, January 30, 2018.
64. University of California Irvine (UCI) and SoCalGas research presented at UCI’s International Colloquium on Environmentally Preferred Advanced Generation (ICEPAG)
on March 30, 2017.
65. California Energy Commission (CEC), “2009 California Residential Appliance Saturation Study: Executive Summary,” Table ES-3: Natural Gas UEC and Appliance
Saturation Summaries by Utility, October 2010.
66. Navigant Consulting, “Gas Strategies for a Low-Carbon California Future,” 2018. California Building Industry Association (CBIA) and Navigant Consulting, “The Cost of
Residential Appliance Electrification,” 2018. Navigant’s analysis was based on a 50 percent RPS goal for 2030. Additional, preliminary analysis based on the 60 percent
RPS goal established by SB100 indicates: California can achieve a 30 percent emissions reduction in the building sector by 2030 with approximately 6 percent RNG
throughput; and with approximately 18 percent RNG throughput, can achieve the same GHG emissions as electrifying all of California’s buildings. Cost effectiveness
measures under the new 60 percent RPS goal indicate RNG is still at least twice as cost-effective as building electrification.
67. Ibid.
40
1
Vernice Hankins
From:Scott Shell <Scott.Shell@ehdd.com>
Sent:Friday, September 6, 2019 10:59 AM
To:councilmtgitems
Subject:Building Electrification
Attachments:190821 Cost effectiveness of all electric buildings.pptx
Dear City Council,
I am writing in support of requiring all new construction projects be fully electric with no natural gas.
Our 65 person architectural firm has been designing all electric buildings since 2001, and can attest that it is affordable,
reliable, and a good solution for our clients. Please see the attached slide deck showing lots of examples of all‐electric
buildings from our firm and many others.
Our largest client is the University of California which now prohibits gas for heating or hot water on all new buildings on
all ten of their campuses for all building types including academic, student housing, office, labs, etc.
A slightly higher efficiency for a mixed fuel building will not be a strong incentive, so I’m encouraging you to support an
all‐electric requirement.
Many large clients have standard policies that architects and engineers must beat the California energy code by some
percentage. The University of California requires 20%, and CSU systems 10%, many other clients have similar targets
and these are routinely met by hundreds of design teams. These modest improvements are simply not difficult and will
not lead to wide spread electrification.
The City of Menlo Park cited this same reason in their staff report to council on why they are requiring all‐electric (with
exceptions).
Here is the excerpt:
“Sonoma Clean Power offered significant rebates to electrify the rebuild of homes after the 2017 wildfires. Permit
applicants could choose between higher energy efficiency standards for a $7,500 rebate or all‐electric standard for a
$12,500 rebate. In addition to the all‐electric rebate, a homeowner would save on upfront construction costs by not
installing natural gas infrastructure. As a result of the rebate program, only one‐third of permit applicants or
homeowners choose the all‐electric home. It showed that incentive type regulations based on cost savings fall short on
achieving the desired outcome.”
https://www.menlopark.org/DocumentCenter/View/22645/H4‐‐‐20190827‐Reach‐codes‐CC
So Menlo Park decided to require electric for everything but allowed exceptions for gas stoves and fireplaces in single
family. They do require these exceptions are pre‐wired so the home is fully electric
ready. https://www.mercurynews.com/2019/08/28/menlo‐park‐opts‐for‐a‐natural‐gas‐ban‐almost‐as‐restrictive‐as‐
berkeley/
I believe these exceptions are not needed, and Berkeley, Windsor, and other cities are passing policies without
exceptions. That is up to the Council.
In multifamily buildings it is already standard practice to have electric stoves and to not run gas piping to each unit due
to the cost. Customer acceptance has been high.
Menlo Park also made an exception for Life Science Research Labs for heating only based on one developers advocacy,
and the Council put in place an appeals process for cases that they could not foresee. Only one person spoke in
opposition at the council meeting.
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2
When electrification reach codes started to be discussed, I reached out to seven leading mechanical engineering firms
we work with and asked if the building industry as a whole was ready for all electric buildings and if it was cost
effective. Their answer was YES. I’ve attached a slide deck summarizing their comments.
So I encourage you to support an all‐electric requirement.
Sincerely,
Scott Shell
Scott Shell FAIA, LEED® AP BD+C, CPHC®
Principal
Pier 1 The Embarcadero, Bay 2
San Francisco, CA 94111
+1 415-214-7277
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The Cost Effectiveness of Building Electrification
Comments from Bay Area Architects & Engineers
August 21, 2019
Scott Shell, FAIA, Principal
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Casa Adelante, 2060 Folsom, San Francisco
Maceo May Veterans Apartments, Treasure Island
Balboa Upper Yard Family Apts, San Francisco
Malcolm Harris, Principal
We have a number of all-electric multifamily housing projects.
I’m a huge, huge fan of this change to all-electric multifamily housing.
It is better in every way, a great simplification of the system.
Less expensive, higher performance, less maintenance, more sustainable.
It is a major cost saving move that pays for a lot of other upgrades.
At Maceo May we saw big savings from eliminating gas fired hydronic
heating, the gas connection, and the solar thermal required by T24.
The savings paid for continuous exterior insulation, energy recovery
ventilators (eliminating Z-ducts), electric resistance heat, and PVs.With
these upgrades we are beating Title 24 by 20%, getting more Green Points,
and lower GHGs on a grid that’s getting cleaner.
The occupants get better indoor air quality benefits from the energy
recovery ventilators.
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Hunters Point Shipyard Block 52, San Francisco
Hunters Point Shipyard Block 54, San Francisco
681 Florida, San Francisco
Malcolm Harris, Principal
Overall the system is just much simpler—there is just one energy
system —electrical, rather than two.
The gas fired boiler & hydronic systems are very problematic at every
step from design to construction to maintenance.During construction
there are often leaks.Commissioning is a constant challenge, and there
are lots of tenant complaints in first few months.Operations is
challenging as maintenance staff are not equipped to operate the digital
BMS system.
Casa Adelante 127 residential Units, 9 stories, under construction. Developers: TNDC/CCDC, Architect:
Mithun & YA Studio.
Maceo May 105 residential units, in permitting. Chinatown Community Development Center, Swords to
Plowshares.
Balboa Upper Yard Family Apts 120 residential units, in design development. Developer Mission Housing
Development & Related California.
Hunters Point Shipyard Block 52 136 residential units total, Design Development. Developer McCormack,
Baron, Salazar.
Hunters Point Shipyard Block 54 136 residential units total, Design Development. Developer McCormack,
Baron, Salazar.
681 Florida 136 residential units total, In Design Development. Developers: TNDC & MEDA
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Santana Row Lot 11
UC Davis Webster Hall Replacement
American Geophysical Union
Hormoz Janssens, Principal
Almost all our projects are all-electric, I have only been using gas systems
where required by the client.
Electric is almost always less expensive or cost neutral. Very rarely is it
more expensive. Often it is our value engineering option.
Most project types work just fine. We are doing a 500,000 sf all electric
office for Microsoft, with major cost savings using heat pumps vs a
central plant.
We do lots of detailed cost analysis with developers to find the most
cost-effective solution. For example, at Bay Meadows our all electric
design for 1 million sf of development was significantly less expensive
than a traditional rooftop package unit + boiler + reheat system.
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UC Santa Cruz Student Housing West
270 Brannan, San Francisco
Chatam University Dining Commons
Hormoz Janssens, Principal
The space requirements are smaller for all-electric, instead of having two
to three separate systems for space heating, cooling, and hot water, we
can do it with a single heat pump system, that space can be used for
other things or the building made smaller for more savings.
Maintenance is less than most conventional systems because you have
just one system. Maintenance is just like an air-conditioning system, it’s
the same thing in reverse, and you eliminate the boiler.
A huge benefit for heat pumps is reducing water use. Using an air source
heat pump for cooling rather than a cooling tower has large water
savings.
We’ve done several all electric commercial food service projects that
have been very successful. The Chef’s quite skeptical at the beginning,
but now say they will never go back to cooking on gas.
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UC Santa Cruz Student Housing West
UC Irvine Student Housing West, Developer ACC
UC Riverside Dundee Residence Hall, Developer ACC
David Phillips, Associate Vice President for Energy & Sustainability
UC Office of the President
The University of California has committed to carbon neutrality by 2025.
We are prioritizing all-electric new buildings (required starting June
2019), and then electrifying existing buildings & systems over time.
Our studies show that all electric mechanical equipment capital costs are
comparable for academic & lab buildings, and the costs are lower for
residential buildings. Twenty year life cycle costs are comparable for
Academic and labs buildings, and lower for residential buildings.
UC has many all-electric housing projects, office buildings, and
laboratories now in place and many more in design.
UC’s carbon neutrality strategies are pragmatic: don’t allow growth to
increase carbon emissions; and then transition existing buildings and
systems off fossil fuels over time.
Decarbonizing Your Campus thru Electrification, SCUP 2019
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Exploratorium, San Francisco
Packard Foundation, Los Altos
Marin Country Day School, Corte Madera
Scott Shell, Principal
We have completed a dozen or so all electric buildings. 10-15 years ago it
was not common in California, and we saw some cost premium on those
early projects.
In the last 5-7 years all-electric has become much more common on our
projects which are primarily commercial and educational. It is now
generally cost neutral or less expensive. There are more manufacturers
providing equipment, and the subcontractors are more familiar with
installing it.
Last year we had an all-electric project go to bid and the total cost came
back higher than expected. In an attempt to reduce cost, we asked the
mechanical contactors to price a standard gas heating system instead.
They came back with no cost savings between gas and all electric, so the
client decided to stay with the preferred all-electric option.
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Mark Day School, San Rafael
Boulder Commons
Lick Wilmerding High School, San Francisco
Scott Shell, Principal
When the University of California, one of our largest clients, decided to
prohibit gas in new projects that really got our attention. It now seems
irresponsible to recommend gas to our clients who may then have to
retrofit them before that equipment reaches the end of its life in order to
meet their carbon goals or local mandates to decarbonize. We don’t want
to be saddling our clients with stranded assets.
Last year I interviewed seven leading mechanical engineers that we work
with asking if the building industry is ready to go all electric. They agreed
that the vast majority of buildings can go all-electric, and the cost is
competitive with a few exceptions.
Most of our all electric projects also include PVs, it is LESS expensive for
our clients to get their electricity from PV than from their utility. With a
power purchase agreement there is no out of pocket cost. Some clients
decided to fund the PVs themselves since it provides a favorable financial
return. Ten years ago solar was seen as an expensive solution for projects
with big budgets. It is amazing to see how quickly that has flipped.
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Batik Apartments, Seattle
Cascade Apartments, Seattle
4700 Brooklyn Ave NE, Seattle
Shawn Oram , Principal
Ecotope has completed 26 central heat
pump water heating projects since 2008,
mostly 100-500 unit projects. Partial list:
1200 NE 45th, Seattle
August Apartments, Seattle
Jackson Apartments, Seattle
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Coliseum Place, Oakland
Peter Waller, Principal
We have several current all-electric multi-family projects. In our
experience it has been indispensable to have a knowledgeable
energy/Title 24 consultant on the team to help guide both analysis and
design.
It is critical to share information about best practices and lessons learned.
By sharing best practices we can reduce mistakes.
We work with both non-profit and for-profit housing developers that own
and operate lots of buildings. It is important to make sure everyone is
aware of the potential challenges that come with new technology.
The life span of the current generation of heat pump water heaters may
be less than the traditional gas fired boilers, depending on operating
conditions.We expect the life span will increase as the market becomes
deeper and more sophisticated,but we try to be open about this reality
with our clients.With that in mind provide access for maintenance and
future replacement down the road.
.
Altamira Family Apartments, Sonoma
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Quetzal Gardens, San Jose
Valley Glen, Dixon
Plaza Point, Arcata
Sean Armstrong, Redwood Energy
All-electric construction consistently reduces construction costs and
ongoing utility bills.
It saves between $2,500 and $5,000 per residence for the developer to
not plumb gas. When infrastructure and appliance costs are added up, a
recent study done by Rocky Mountain Institute found a median
increased cost of $8,800 more per house for gas infrastructure, piping,
purchasing appliances and venting
Only education is preventing developers from profiting from the
technological innovations available in the all-electric domain.
Developers have been choosing all electric construction because it cost
less to build and that trend has been going on for 24 years now.
New construction is easy technically and financially and because the
construction cost savings justify going all-electric.
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Cloverdale, Corporation for Better Housing
Colonial House Apartments, Oxnard
Atascadero, Corporation for Better Housing
Sean Armstrong, Redwood Energy
New construction is easy technically and financially and because the
construction cost savings justify going all-electric.
Because an all-electric building can achieve higher mechanical system
efficiency than a gas burning building, it is lower cost for developers
building all-electric to comply with the Title 24 Energy Code. We
documented this is our report A Zero Emissions All-Electric Multi-family
Construction Guide, see the graphic on page 7.
https://fossilfreebuildings.org/ElectricMFGuide.pdf
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152 N. 3rd, San Jose
Peter Rumsey, Principal
There are great examples of all electric buildings for virtually every
building type that are cost effective. It is very easy for our firm to design
these systems, we are very familiar with them.
For Multifamily projects we are seeing a lot of developers use electric
heating with high levels of insulation in apartments that don’t need
cooling.
All electric air-cooled VRF heat pumps are very common on multifamily
projects up to ten stories where cooling is needed; this is very cost
effective.
Developers are using VRF systems on small to medium sized commercial
buildings. Production home builders have been using central heat pump
heating and cooling units for many years. And we are seeing a surge in the
use of larger heat pumps for generating hot water systems. Central hot
water systems can have a cost premium, but it is very small as a
percentage of the building cost.
The Tidelands Housing, San Francisco
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The Exploratorium, San Francisco
Pier 70, Building 12
Peter Rumsey, Principal
Large 20 story multifamily high-rise require a water source heat pump and
that equipment still has a cost premium.
Cooking remains a hard sell in many cases, a lot of people are very
skeptical of giving up gas. Technically this isn’t a problem, the experts at
the Food Service Technology Center in San Ramon say an electric fryer
provides better and more even heat than gas. Induction ranges are
excellent.
The market for all electric buildings and heat pumps has been making
significant inroads in California, and this had gotten the attention of
manufacturers. General Contractors and mechanical subcontractors are
getting more familiar with this approach as well.
Title 24 used to discourage electric heating of all types and is now more
neutral on the issue. I understand that future versions of title 24 are going
to be more encouraging of some types of electric heating.
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Alexander Valley Medical Center
Goldman School of Public Policy + Housing
SMUD Office & Operations Building, Sacramento
Ted Tiffany, Principal
We have designed quite a few all electric buildings. The Goldman School
of Public Policy is as designed all-electric and construction cost compared
favorably to gas. This also allowed for individually metered apartments so
tenants paid their own utility bills.
The UCOP did a robust cost analysis of various building types and in almost
all cases it found lower life cycle costs with all-electric buildings. It is
important to manage TOU rates. First cost savings are partly dependent
on if you can eliminate the gas service, which in most cases you can; if you
do this generally makes the construction cost less than mixed fuel
buildings.
https://www.ucop.edu/sustainability/_files/Carbon%20Neutral%20New
%20Building%20Cost%20Study%20FinalReport.pdf
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Ted Tiffany, Principal
For most building types and sizes, there is no technical reason preventing
the industry from shifting to all-electric buildings.
Laboratories and Hospitals can be more of a challenge as all electric due to
the high outside air loads, demands for sterilization, and high hot water
loads.They are possible, but more challenging.
Sonoma Clean Power
Silver Oak Winery
Albany High School
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J. Craig Venter Institute Lab, San Diego
SFO Consolidated Admin Facility
Integrated Genomics Lab, LBNL
Eric Solrain, Principal
Integral currently has dozens of all-electric buildings recently complete, in
construction, and in design. There has been a big sea change in recent
years towards all-electric. Around 50% of our work is currently electric.
There is lot of momentum in Multi-family Residential and in Commercial
projects moving to electric systems.
Comparing the construction cost of all-electric to gas depends on what
you are comparing it to. If comparing to a high-performance design such
as LEED Gold then all-electric is cheaper. If comparing to moderate
performance building then all-electric is cost neutral. If comparing to the
most basic design, there may be a small cost premium.
There are some significant code changes in California energy code in 2019
that will make all electric even more cost competitive, especially for
multifamily.
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435 Indio, Sunnyvale
415 Mathilda, Sunnyvale
380 N. Pastoria, Mountain View
Eric Solrain, Principal
All electric has several big advantages:
•Electric equipment takes up significantly less space and that space can
be used for other things. At 1700 Webster the gas option filled the roof
with equipment, while the heat pump option had much less equipment
so they were able to put a nice deck and pool on the roof.
•Getting gas service to the equipment, and a flue out through the
building can be challenging problems and cost money. Getting make-
up air to gas boilers can be challenging.
•For large multi-family projects heat-pump dryers avoid all the problems
associate with venting.
•There have been good advances in heat pump choices in recent years.
Aermec and Climacool make excellent equipment, that can heat and
cool simultaneously with robust controls.
•There are huge climate benefits to shifting from gas to electric. London
is completely redoing it’s 10 year old decarbonization plan which was
drafted when they had a dirty electric grid. Their grid is much cleaner
now so they are quickly revising the plan to promote electrification.
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Edwina Benner, Sunnyvale
Stoddard Housing, Napa
Casa Adelante, San Francisco
Nick Young
In multifamily buildings with individual heating and hot water systems
for each unit it’s a no-brainer to go all-electric, from a cost, modeling,
technology, and code compliance perspective. All-electric should be the
standard design for these projects.
For Multifamily buildings with central domestic hot water there are also
excellent options using electric heat pumps. We are seeing these
projects go with Sanden, Colmac, and Nyle heat pumps.
A significant challenge is that Title 24 doesn’t have a modeling pathway
for central hot water systems. The CEC is working on fixing this, targeting
the 2019 code cycle.
Our all-electric multi-family projects include: Edwina Benner Plaza in
Sunnyvale, 2437 Eagle Ave in Alameda, St Paul’s Commons in Walnut
Creek, Stoddard Housing in Napa, Casa Adelante in San Francisco, and
Maceo May in San Francisco.
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Los Angeles County Business Federation / 6055 E. Washington Blvd. #1005, Commerce, California 90040 / T: 323.889.4348 / www.bizfed.org
September 10th, 2019
Mayor Gleam Davis
City Councilmembers
City of Santa Monica
1685 Main St.
Santa Monica, CA 90401
Re: Item #4A, Study Session on Decarbonizing Buildings Through Electrification
Mayor Davis and Councilmembers:
We are contacting you on behalf of BizFed, the Los Angeles County Business Federation. We
are an alliance of 180 business associations who represent over 400,000 employers with 3.5
million employees in Los Angeles County. We are writing to address item #4A on the Santa
Monica City Council agenda, September 10th.
BizFed supports an all-the-above approach to our energy needs. While we believe finding
ways to decarbonize buildings is important – we would like to reiterate that sustainability is
not just about the environment. It is also about sustainability of jobs, sustainability of
communities, and sustainability of the economy. We would respectfully ask that as the city
looks towards decarbonization, you continue to take a balanced approach that allows for
multiple technologies and multiple fuels to compete while keeping in mind the costs involved
for all businesses and residents.
Many businesses operate on a razor thin profit margin. Any increased costs will inevitably go
to the consumer or worse – cause the business to move elsewhere. It is important as the
cost-effectiveness is studied, that it is done accurately with input from stakeholders. We ask
that you keep business as part of the process so they can help you make an informed
decision before you move forward with any sort of mandate.
Thank you for your consideration of our letter. If you have any questions, please contact
sarah.wiltfong@bizfed.org.
Sincerely,
Steve Bullock David Fleming Tracy Hernandez
BizFed Chair BizFed Founding Chair BizFed Founding CEO
Cerrell Associates IMPOWER, Inc.
Los Angeles County Business Federation / 6055 E. Washington Blvd. #1005, Commerce, California 90040 / T: 323.889.4348 / www.bizfed.org
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Board Members, Cont.
Stephanie Harris
Carlthorp School
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JW Marriott Santa Monica
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Jeff Jarow
PAR Commercial
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Spin PR
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Harding Larmore Kutcher &
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Shutters on the Beach
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Pacific Park on the
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Rustic Canyon Family of
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MSD Hospitality LLC
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Cedars Sinai
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Avery, Craftsman Bar &
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RAND Corporation
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LAcarGUY
Judi Barker
Barker Hangar
Josh Bradburn
Charles Schwab & Co.
Ted Braun
UCLA Medical Center,
Santa Monica
Dr. Ben Drati
SMMUSD
Jeffrey Fritz
Coldwell Banker
Annie Goeke
Earth Rights Institute
Paul Graves
Morley Builders
September 10, 2019
Santa Monica City Council
City Hall
1685 Main Street
Santa Monica, CA 90401
Dear Mayor Davis and Council Members,
The Santa Monica Chamber of Commerce has a long record
of supporting environmentally progressive legislation in this
city. We have honored sustainable businesses for more than
two decades at the Sustainable Quality Awards and we have
supported the City’s greening initiatives, including the recent
disposable food ware ordinance.
As you consider the topic of building decarbonization during
tonight’s study session, I ask that you remember the unique
challenges and needs of our local restaurants.
Most professional chefs have historically preferred cooking
with gas cooktops. They offer several advantages over
traditional electric ranges and are more affordable and
simpler than their induction counterparts.
Any move to prohibit natural gas could present burdensome
costs for existing local, non-chain restaurants or dissuade
new restaurants entirely from opening in the City.
We are so proud that Chamber board member Rustic Canyon
was one of two Santa Monica restaurants to earn a coveted
Michelin star this year. Local and international visitors expect
the highest quality from our restaurants, and we ask that you
keep this in mind as you move forward with your admirable
environmental initiatives.
Best,
Laurel Rosen
President / CEO
Santa Monica Chamber
City Council St udy Session
Building Decarbonization
September 10, 2019
Decarbonization = Electrification of Transpor tation & Buildings
St ate’s Leadership
SB100
•50% renewable electricity by 2025, 60% by 2030, 100% by 2045
AB3232
•Assess how to reduce GHG emissions from buildings to 40% below 1990 levels by 2030
SB1477
•Provides $50M in annual incentives to jumpstart market for low-emission heating tech
2019 CA Building Standards Code “Title 24”
•Increased efficiency, all-electric pathways, and solar PV required for low-rise residential
SoCal Gas Clean Energy Vision:Re newable Natural Gas
SCE Clean Energy Pathway
Santa Monica’s Leadership
•Sustainable City Plan (1994, 25yrs ago!)
•Mandatory solar on all new buildings (2016)
•Energy Reach Code (2017, in effe ct until Dec 31, 2019)
•Municipal Sustainable Building Administrative Instruction (2017)
•Climate Action & Adaptation Plan (2019)
•Carbon reduction ordinance for large existing buildings
•Adopt carbon neutral building codes
•Convert gas equipment to electric
•Clean Power Alliance (2019)
Clean Power Alliance Update: Over 90% of Customers Suppor t 100% Green Power
100% Green
Po wer, 91.5%
50%
Clean
Power,
0.6%
36% Lean
Po wer,
2.7%
Opt Out,
5.2%
Residential Customers
100% Green
Po wer,
92.1%
50%
Clean
Power,
0.7%
36% Lean
Po wer,
3.0%
Opt Out,
4.2%
Commercial Customers
As of Aug 26
0 100,000 200,000 300,000 400,000 500,000 600,000
Vehicle Fuel - Diesel
Building Natural Gas Use
Building Electricity Use
Vehicle Fuel - Gasoline
Santa Monica
Emissions by Source
Renewable Electricity:
Community Choice
Aggregation
End Use: Electrification
Supply:Re newable Natural Gas
Natural Gas is ME THANE
•84x more potent than CO2 as a greenhouse gas
•Combustion causes indoor air pollution
•By-products include carbon monoxide (CO), nitrogen oxide (NOx), fine and ultrafine par ticles, and formaldehyde
Why Decarbonize and Electrif y?
•Health & Safety –improves indoor air quality, reduces hazards like explosions and carbon monoxide
•Cost Savings –avoids $5,000-$10,000 in construction costs
•Efficiency –2x efficiency compared to natural gas in providing heating & hot water
•Environmental Benefits –can utilize renewable electricity, and provide grid benefits
Focusing on Electrif ying End-Uses
Heat Pumps & Electric Options for all Uses
Commercial
1.Heat pump space heating
& cooling
2.Heat pump water heater
Re sidential
3.Heat pump space heating
& cooling
4.Heat pump water heater
5.Heat pump pool heater
6.Heat pump clothes dr yer
7.Induction stove
1.2.3.
4.5.6.7.
Heat Pump 101
Heat pumps move heat from one place to another (like your fridge)
What are the challenges?
•Planning and design
•Limited electrical capacity or supply in existing /older buildings
•Low priority for property owners (unless equipment fails)
•Growing awareness & acceptance by consumers and installers
Suppor ting Electrification
New Construction
ü Reach Code for New Construction (in progress)
q Gas Ban or In-Lieu Fees (to be considered)
Existing Buildings
ü Model Projects (in progress)
ü Carbon Reduction Program for Large Buildings (near-term)
ü Retrofit Accelerator (near-term)
q Financial Incentives (to be considered)
q Smart Grid Integration (near/mid-term)
Local Government Leadership
ü Local Government Collaboration (in progress)
ü New construction (in progress)
ü Retrofits (in progress)
Supply Chain and Workforce Development
New Construction Re ach Codes
All-Electric Preferred
•More aggressive efficiency requirements than state code
•Re quires cost-effectiveness study
•CA Energy Commission (CEC) approval
New ConstructionOther Cities and Institutions Taking Action
•The UC system will no longer use gas for space and water heating
in new buildings or major renovations
•50 CA cities are in the process of developing electric-preferred
reach codes that apply to new construction
•SLO mandates all-electric new construction or pay in-lieu fee to
retrofit gas-to-electric elsewhere in the city
•The City of Berkeley is the first city to phase out gas hookups in all
new construction starting in 2020.
Existing Buildings
Carbon Re duction Program
Ta rgeted Performance Standards
Unifying Grading System
Accelerated Retrofits
Long Timeline
Lead By Example
SFR
1,028,178
24%
MFR
956,920
22%
COM
2,318,895
54%
ENERGY CONSUMPTION (MMBtu)
Existing BuildingsOther Cities Taking Action
•New Yo rk City established the Office of Building Energy and
Emissions Performance & GHG emissions limits for existing
buildings
•The City of Los Angeles EBE&WE annual benchmarking and
audits/retro-commissioning
Existing BuildingsEncouragingRetrofits with Rebates
Agency Incentive
Sacramento MUD $3,000 for heat pump water heater
Alameda Municipal Power $500 for heat pump water heater
Burbank Water & Power $125-350 per ton of cooling
Sonoma Clean Po wer $17,500 Advanced Rebuild
Smar t Grid Integration
Energy
Demand /
Solar
Production
Time of Day
Solar
Production
Aggregate
Energy Use
Not Well
Timed with
Solar
Smar t Heat Pump
Using Solar Energy
New Construction and Existing BuildingLocal Government Leadership
Local Govt Collaboration New Construction Re trofits
Fossil Fuel Free
by 2021!
Living Building
Challenge = No
Combustion
Existing BuildingModel Projects
•Community Corporation of
Santa Monica @1616 Ocean Ave
•19-unit affordable housing
retrofit project
•$50,000 grant from OSE
•All-electric + 33 kW solar
Supply Chain & Workforce Development
•Engage with suppliers, local plumbers, HVAC technicians, and building contractors to build awareness, identif y barriers and oppor tunities
•Wo rk with Santa Monica College & Clean Power Alliance to develop training programs
Building Electrification
New
Construction Existing Buildings Education
Building Codes
Gas Ban or Fees
Carbon Reduction Programs
Retrofit Accelerator
Smart Grid Integration
Financial Incentives
Supply Chain &
Wo rkforce Development
Model Projects
Outreach
THANK YOU