Review of Bay Area Smart Energy 2020

"We've gone from defense to offense," declared Cisco DeVries at the launch event for Bay Area Smart Energy 2020 (BASE 2020) on March 12 in Oakland.  DeVries, developer of the groundbreaking Property Assessed Clean Energy (PACE) program in Berkeley spoke on a panel with Alex Levinson from Pacific Environment.  Levinson predicted, "California will be the first state to reach 100% renewable energy."  David Hochschild, co-founder of Vote Solar and instrumental in California's $3.3 billion solar initiative, added that we need to "build a solar industry that can take on Exxon."  Francesca Vietor, member of the San Francisco Public Utilities Commission, described the report as a "roadmap on how to get there."

Bill Powers, Principal Author of Bay Area Smart Energy 2020, at the launch event March 12

Indeed this report is a monumental achievement.  It has 166 pages packed with facts, figures, and illuminating arguments as well as 680 footnotes with hundreds of links to documentation.

The report concentrates on the generation of electricity and how to minimize greenhouse gas (GHG) emissions in the nine counties surrounding San Francisco Bay.  It details plans that will reduce GHG emissions from electricity usage by more than 60% by 2020 compared to 2008.  The report focuses on reducing peak demand with plans from 14,000 megawatts (MW) to 6,500 MW.  This reduction will come about by:

·         Efficiencyimprovements (2500 MW),

·         Upgrading and on/off cycling of air conditioners (2100 MW),

·         New rooftop solar photovoltaics (PV) (1900 MW),

·         Combined Heat and Power (CHP, also known as cogeneration) (840 MW)

·         Battery storage from PV (200 MW)

 Additional renewable energy toward the 60% GHG reduction goal will come from wind (300 MW), additional solar (1700 MW), and geothermal (300 MW).  Solar water heating would reduce natural gas by about 5% statewide.

BASE 2020 builds on the California Energy Efficiency Strategic Plan.  For example, the California Strategic Plan envisions that 25% of residences will achieve 70% less grid electricity by 2020. The BASE 2020 plan envisions 25% of residences to achieve zero net energy by 2020.  Also, the California Strategic Plan envisions all new residences to be zero net energy by 2020 while BASE 2020 envisions the same goal, but by 2015.

The report strongly supports rooftop solar panels rather than remote utility scale projects, often citing Germany as an example of how to do it.  The report also supports geothermal and wind, but sees rooftop solar as a more economical source of renewable energy, especially given the dramatic price drops in recent years.  BASE 2020 argues that PV is very reliable on hot summer days when energy demand is at its peak.  This is why BASE 2020 emphasizes solar over wind as a way to reduce peak demand.   California's price is now around $5 per watt for small residential installations, but Germany is installing at half that price. The Feed-in-Tariff in Germany adjusts its price downward as the cost of PVs decreases so there is no windfall profit, but the incentive to add solar remains strong.

The concept of merit benefits, discussed in detail in the report, is also important.  This concept is that renewable energy and efficiency measures reduce the peak demand, and by doing so, lower the price of peak electricity.  This means that for every 1% of California's energy that becomes renewable or is reduced by efficiency, there is a benefit on the order of 6 cents per kwh.  (see graphs and discussion on page 128 of the report).

One issue that the report brings out is that the profit model of a public utility often conflicts with best public policy.  In general, the investor owned utilities (IOUs) have as their "core financial interest--construction of new IOU owned generation and transmission infrastructure" (page 112) from which they can collect from ratepayers an 11-12% rate of return for their stockholders.  For example, remote solar installations add about 3 - 4 cents/kwh for transmission lines but these large scale installations are more profitable for utilities than paying people who install rooftop solar panels.  Similarly, with regard to energy efficiency measures, the report notes that Oregon has set up a non-profit agency for this task and has made much more substantial improvements than California has under the leadership of utilities. 

 Some specific policy initiatives detailed in the report include:

·         No more natural gas power plants.  The report argues that PG & E (our local utility) has more than enough capacity with its existing natural gas plants and that plans for over 4,000 MW of additional natural gas power plants and peaker plants by PG&E should be scrapped. 

·         The PACE program needs to be expanded and defended against current Federal Housing Finance Administration efforts to stop it due to their fears that it will override first mortgages.

·         Establish Feed-in-Tariffs that pay at least 22 cents per kilowatt hour (kwh) to account for all avoided costs and merit costs for the utilities.  BASE 2020 recommends that an agency such as the State Department of General Services should purchase PV and sell it to the IOUs if the feed-in-tariffs set by the state Public Utilities Commission do not accurately represent the cost and cost savings for the utilities. 

·         Support Community Choice Aggregation as an important way to increase renewable energy amounts for consumers.

·         Eliminate the 5% cap that currently limits how much solar net metering is possible

·         Eliminate electricity from coal in the mix that is imported to the state  

·         Set up a non-profit organization to administer energy efficiency measures

·         All new homes should be equipped with enough solar to be zero net energy

At the launch event for BASE 2020, Paul Fenn, a creator of Community Choice Aggregation, was asked how optimistic he was about the prospects achieving the goals of BASE 2020.  He said on a scale of  1 - 10 he was a "10 or die".  In other words, we have no choice but to achieve this, given the reality of catastrophic climate change.

 The report offers such a wealth of good ideas and carefully supported points, that I hesitate to  criticize it.  Nonetheless, I do feel there are some ways that the report could be strengthened.

1.      The context of global warming

2.      Electric Vehicles

3.      Wind energy

1.  I feel that the scope of the report--reducing greenhouse gases from electricity usage--needs to be put in context.  As I've argued (e.g. see What Will it Take to Stop Global Warming--the Case for Electric Cars page 2), if we are going to stop global warming, fossil fuels need to be cut from the current 31 billion tons per year, to no more than seven or eight billion tons--i.e. one ton per person on the planet.    Since the U.S. average is about 20 tons per person, this will require 95% reduction in fossil fuels.

 As shown in Figure 1 below, electricity generation accounts for 1/3 of the overall greenhouse gas emissions in the U.S.   Since certain uses of fossil fuels are difficult to replace (e.g. aircraft, home heating in very cold weather), it is necessary to eliminate fossil fuels from electricity production if we stand a chance of stopping global warming.

Figure 1:  Sources of Greenhouse Gas Emissions in the U.S.

So the goal of BASE 2020 to reduce GHG from electricity by 60% by 2020 is wonderful, but it is only a step in the process.  It would be good for the report to explain this so people understand how BASE 2020 fits into the overall goal.

2.  With that in mind, my second suggestion is that it is important to look at the relation of transportation to the BASE 2020 plan.  Figure 2 shows the greenhouse gas sources from transportation.  Light duty vehicles generate 59.3% of the GHG from transportation.  The good news here is that all of these can be converted to plug-in electric vehicles (PHEVs) or extended range electric vehicles with proven technology--e.g. Nissan Leaf, Chevy Volt, and many others.   

Figure 2: Sources of Greenhouse Gases from Transportation

The BASE 2020 report mentions that there could be up to 1.6 million electric vehicles in California by 2015, quoting from PG&E's 2006 Long-Term Procurement Plan, Volume II, page I-29. That PG&E plan also correctly notes (page I-28):

"PHEVs, like pure battery electric vehicles, will be subject to Time-of-Use  (“TOU”) rates, such as PG&E’s Schedule E-9 residential rate which is specifically designed to strongly encourage off-peak overnight recharging of the vehicle when PG&E has excess capacity.   Because of the large amount of excess generation available at night, it would take millions of PHEVs charging nightly on PG&E’s system before there would be any concern about the need for additional off-peak procurement."

BASE 2020 offers a different perspective:  "Charging PHEVs in the middle of the day will be both economic and serve the critical grid function of absorbing excess non-dispatchable midday PV generation."  (page 62) While this would be a wonderful situation--i.e. so much PV that we don't know what to do with it--the current situation is vastly different.  Fortunately, nighttime charging of PVs is no problem for the grid as PG&E notes above, and the low off-peak price is a good incentive for switching to electric vehicles.

Again, coming back to the overall context of global warming, it will be necessary to convert to 100% electric cars running on 100% renewable energy if we can even hope to stop the increase in CO2 in the atmosphere.

So what are the implications for the grid if, indeed we do convert all light duty vehicles to electric?  As BASE 2020 points out, a typical car requires about 8 kwh of electricity per day. (page 62)   There are about 23 million cars in California California DMV registered vehicles/fees paid report so they would require 8000 x 365 x 23 million = 67,160 GWH.  Interestingly, if the state succeeds in achieving 30% reduction in current electricity consumption by energy efficiency measures, the increase in electric vehicles would be covered by the savings. (30% of 277,000 GWH = 83,000 GWH saved)  Therefore, even with 100% adoption of electric vehicles, there would be no need to expand the grid, especially since most people charge at night in otherwise low demand periods.

Many local delivery trucks could also run on batteries.  Long haul diesel trucks could run on low-carbon biofuels.  Even aviation fuels could be carbon neutral, but that needs more technical advancement.  But even if all electricity and all transportation is run on renewables, that is still only 61% of the greenhouse gases that we emit, so we still have a ways to go!

As to whether it is really possible to convert all the cars to electric, all projections of electric vehicle growth are market based.  But if we as activists can pass legislation--

·         Warning people about the hazards of fossil fuels (e.g.on fuel pumps, car ads, oil company ads, etc.),

       ·         Providing incentives for electric cars and solar panels,

·         Taxing carbon, and

·         Putting a cap on carbon (ideally one ton per person worldwide),

the market will be vastly different than projected today.  So I agree with Paul Fenn's sentiment, we either do it or we die.

One problem with electric cars is that, if people charge at night, solar is not available, unless storage batteries are used.  The BASE 2020 solution of using PV to charge cars during the day is questionable in my mind since it will add a lot to peak loads.  Plus it is generally not as convenient to charge during the day--most homes have garages or driveways with outlets to charge the vehicle, while most parking lots do not.  Therefore, the infrastructure is already in place for nighttime charging.

3.  This brings me to what I see as the third area needing strengthening in the report--wind. 

The BASE report justifiably focuses on the peak hour demand for electricity with the goal of showing that renewables can negate the need for gas peaker plants.  The report downplays wind, stating that wind is limited "in the renewable energy mix to reduce the amount of back-up power necessary for frequency regulation and reliability support during peak demand periods." (page 153)  

This point is well taken, but I feel it loses sight of what must be our real goal--i.e. to get to 100% renewable energy.  Now if solar does indeed become so cheap that we can use it to meet peak demand and still charge all of our cars and store the extra energy in batteries, that would be just fine.  But I think we should hedge our bets on that a bit and take advantage of the wind that blows at night.  The BASE 2020 report does note that wind is "reasonably reliable--especially at night" (page 43).  So why not build wind to replace fossil fuels for the nighttimes?  Wind may not be a reliable afternoon peak generator, but it could replace non-renewable sources at night.  The old natural gas plants, hopefully running on biogas, could be used on rare occasions when the wind doesn't blow.

The report asserts that wind power must provide backup power that can "equal the reliability of fixed PV on hot summer days."  It seems to me that wind and solar complement each other very well (see graphic below from Scientific American, November, 2009) and with cars charging at night, the wind can provide fairly reliable means to do this charging.  There is no need to provide new backup power plants for wind at night, since there is already capacity in the existing grid.  Without adding this backup power, wind's cost becomes comparable to the cost of PV solar, i.e. very cost efficient.

Germany generates twice as much electricity from wind as it does from solar.  China added 19GW of wind last year, roughly enough to power the entire Bay Area. 

Let me re-state that BASE 2020 is a magnificent achievement.  It shows how we can truly embark on the path to 100% renewable electricity.  I urge everyone to get on board with the legislative agenda proposed in BASE 2020.  The issues are complex, but it's a wrestling match we have to win.