NewEnergyNews: TODAY’S STUDY: THE MANY BENEFITS OF CALIFORNIA’S NEW ENERGY/

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YESTERDAY

THINGS-TO-THINK-ABOUT WEDNESDAY, August 23:

  • TTTA Wednesday-ORIGINAL REPORTING: The IRA And The New Energy Boom
  • TTTA Wednesday-ORIGINAL REPORTING: The IRA And the EV Revolution
  • THE DAY BEFORE

  • Weekend Video: Coming Ocean Current Collapse Could Up Climate Crisis
  • Weekend Video: Impacts Of The Atlantic Meridional Overturning Current Collapse
  • Weekend Video: More Facts On The AMOC
  • THE DAY BEFORE THE DAY BEFORE

    WEEKEND VIDEOS, July 15-16:

  • Weekend Video: The Truth About China And The Climate Crisis
  • Weekend Video: Florida Insurance At The Climate Crisis Storm’s Eye
  • Weekend Video: The 9-1-1 On Rooftop Solar
  • THE DAY BEFORE THAT

    WEEKEND VIDEOS, July 8-9:

  • Weekend Video: Bill Nye Science Guy On The Climate Crisis
  • Weekend Video: The Changes Causing The Crisis
  • Weekend Video: A “Massive Global Solar Boom” Now
  • THE LAST DAY UP HERE

    WEEKEND VIDEOS, July 1-2:

  • The Global New Energy Boom Accelerates
  • Ukraine Faces The Climate Crisis While Fighting To Survive
  • Texas Heat And Politics Of Denial
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    Founding Editor Herman K. Trabish

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    WEEKEND VIDEOS, June 17-18

  • Fixing The Power System
  • The Energy Storage Solution
  • New Energy Equity With Community Solar
  • Weekend Video: The Way Wind Can Help Win Wars
  • Weekend Video: New Support For Hydropower
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    email: herman@NewEnergyNews.net

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  • WEEKEND VIDEOS, August 24-26:
  • Happy One-Year Birthday, Inflation Reduction Act
  • The Virtual Power Plant Boom, Part 1
  • The Virtual Power Plant Boom, Part 2

    Tuesday, June 02, 2015

    TODAY’S STUDY: THE MANY BENEFITS OF CALIFORNIA’S NEW ENERGY

    Impact Analysis: Governor Brown’s 2030 Energy Goals

    May 2015 (Strategen Group)

    Executive Summary

    An impact analysis conducted by Strategen Consulting reveals that the Governor’s goals can be met through actions that will provide significant economic and societal benefits to California. Achieving these goals will stimulate the economy through the reduction of fuel and electricity imports. The analysis indicates that by 2030, over 870,000 new jobs will be created in the construction, manufacturing, sales, service and support of California’s new domestic energy infrastructure, and through the economic activity resulting from energy savings. The reduction in pollution will save lives, reduce healthcare costs and improve the quality of life for all Californians.

    The financial benefits are considerable: consumers and businesses will save $51 billion per year on fuel and electricity, equivalent to over 2.5% of current state GDP. These values are so compelling that it is imperative that California policymakers develop a cost-optimized, longterm strategy to ensure success and to enable Californians to realize these benefits.

    Innovative grid strategies and technologies will be required to meet the Governor’s goals. Many of these technologies, some of which are developed by companies in California, are in our hands today. All are rapidly descending the cost curve, including solar, energy storage, wind, LED lighting, and electric vehicles (EVs). California is already on a track to generate 33% of its electricity from renewable sources by 2020. Meeting the 50% renewables target by 2030 requires continuing to install solar and wind at similar rates for another 10 years, while adding complementary resources that assist with renewable integration.

    A consistent and predictable policy environment is needed to attract the private investment that will drive the development of California’s future energy infrastructure. The resulting mix of sources and distribution of energy in 2030 will require long-term investments in areas such as energy storage, EV charging networks, and transmission and electricity grid infrastructure, as well as continued support for renewable generation and fuel efficient vehicles. With the right approach, the Governor’s goals will enhance the California economy, reduce costs, and improve the lives of Californians.

    Impact Analysis Goals And Methodology

    The purpose of this impact analysis is to quantify the potential benefits to California of realizing Governor Brown’s goals. In order to assess the implications and impacts of the Governor’s goals, Strategen has constructed a model that includes scenarios for California’s transportation mix, energy consumption in buildings, and electricity generation. In each case, publicly available data sources were used to construct a representation of energy consumption today and then develop projections of the 2030 energy consumption and energy mix, under a business-as-usual scenario and a Governor’s Goals scenario; the impact analysis was based on the difference.

    Because there are many ways these goals can be accomplished, this study focuses on the economic and societal benefits and does not attempt to quantify the net cost impact of the clean energy solutions that will be required to achieve those benefits. The savings estimates represent the annual impact of the implementation of the Governor’s goals. For example, the cost of additional electricity usage due to additional electric vehicles is considered in the impact analysis benefits, but the incremental capital costs of new EVs is not included. Additional system-level modeling would be required to determine the most cost-effective way to deliver these benefits.

    The Benefits To Californians Are Far-Reaching

    Consumers and businesses will realize $51 billion in savings annually from 2030 onwards, or $4,000/California household each year, amounting to over 2.5% of the state’s GDP.

    Approximately 75% of the $51 billion saved will contribute to an improvement in California’s balance of trade. California would retain $38 billion, or about $3,000 per household, within the California economy:

    • The state’s imports of oil, natural gas and electricity will be reduced by $44 billion per year.

    • Annual imports of equipment for renewable energy – wind turbines, solar panels, and solar inverters – will amount to approximately $6 billion by 2030, offsetting only a small portion of the state’s gains.

    The reduction in fuel imports will cause a significant amount of money to remain in-state, and local governments stand to gain $680 million in new tax revenues.

    • Using a relatively conservative economic multiplier of two, the savings above will lead to growth in the state’s economy by $76 billion, or 3.8% of GDP1 . Based on census data, local governments in California receive about 0.9% of sales tax revenue, representing $680 million in new tax revenues to local governments.

    • The impact on state revenue is neutral or slightly positive. The state would see a $3.9 billion reduction due to reduced gasoline taxes. This would be more than offset by the additional $4.1 billion in new tax revenue that will result from increased in-state economic activity.

    The pollution reductions that California will achieve in the next 15 years will have a major impact on the health, lives and livelihoods of all Californians:

    • California’s CO2 emission footprint will be reduced by over 102 million tons per year, a reduction of 42% from 2015 levels. This reduction is greater than the total annual GHG emissions produced from electricity used in California residential and commercial businesses. It is comparable to the annual CO2 reductions that would result by planting a forest the size of Maine.

    • Reduced CO2e, SO2, NOx, and PM2.5 from burning fossil fuels will result in avoidance of approximately 739 premature deaths per year, 28,000 asthma attacks, and 56,000 lost workdays2 .

    The implementation of the Governor’s goals will create 1.2 million job-years by 20303 :

    • Energy efficiency upgrades already employ upwards of 300,000 Californians4 , primarily in construction related fields. Doubling the state’s energy efficiency targets will drive additional job creation.

    • The increase in California’s supply of solar and wind power will directly support the creation of 870,000 job-years by 2030, up from 44,800 in 2014. Consumers in the state will enjoy a more stable, reliable and predictable energy supply:

    • The shift towards renewable generation will make the state’s economy less vulnerable to volatile oil and natural gas prices. Solar and wind power are typically purchased on 25-year fixed-price power purchase agreements (PPA), reducing the risk of an unforeseen fuel price crisis.

    • Deployment of energy storage throughout California’s electric power system will maximize the value of photovoltaics (PV) and wind power while minimizing the need to over-build reserve capacity. Energy storage will simultaneously enhance grid efficiency, reliability and resiliency. By using energy storage to match supply and demand, existing fossil generating assets can operate at their optimum efficiency levels and reduce their GHG emissions.

    These Goals Are Achievable

    The Governor’s goals for 2030 represent a significant shift in the way the state produces and uses energy and provide enormous economic benefits for Californians. We note that these are not unrealistic targets. In fact, California has made such great strides in renewable energy generation in the past two years that the required increase in renewables does not pose a capacity challenge. California has consistently led innovation in building efficiency, and this trend will continue as we work to achieve new levels of efficiency. California also leads the nation in the electrification of cars and trucks.

    • California has already demonstrated that it has the capacity to meet the goal of 50% renewable generation by 2030. The state can achieve this by continuing the peak rates of installation of utility scale solar and wind that were reached in California in the past three years, with an annual increase of 3%. Maintaining those rates will require continued policy support.

    • The cost of renewable electricity has declined dramatically, with prices for wind averaging $25/MWh and recent contracts for large scale solar at $50/MWh or less5 . These prices compare favorably with the average wholesale cost of electricity in California of $55/MWh in 2014.

    • Electric vehicles (including plug-in hybrid EVs) will be vital to meeting these targets. California can achieve a 50% reduction in gasoline consumption if roughly 35% of auto miles and 15% of truck miles are driven under electric power.

    • EVs are rapidly gaining traction, with 28 models being offered for sale in 2015, a dramatic increase from 2011, when only 2 models were available. Ranges are increasing in newer vehicles, with multiple companies planning to offer 200 mile range EVs for less than $35,000 in the next two years.

    • Energy storage is already proving to be a cost-effective grid resource for the integration of renewables and EVs. Southern California Edison has recently commissioned a 32 MW energy storage resource in Tehachapi, California, and is contracting for over 260 MW of customer sited and grid connected energy storage to supply local capacity in the Western LA Basin. Pacific Gas & Electric is already operating two substation-level energy storage units, and both Pacific Gas & Electric and San Diego Gas & Electric are actively procuring energy storage to support their distribution systems and help integrate renewable energy.

    Recommendations

    Public policy has been the critical driver behind California’s successes to date in renewable energy and energy efficiency. Achieving the Governor’s goals for 2030 will require a step-up of existing policies and creation of new ones. Policymakers should emphasize long-term consistency and predictability and should seek to leverage the power of private investment. Specific recommendations are as follows:

    • More detailed system-level modeling is required to determine the most cost-effective way to deliver these benefits. Capital costs and financing costs have dropped dramatically for solar, energy storage, and energy efficiency while the selection of entry-level EV options has greatly increased. Given this rapid reduction in new technology costs and choices, it is critical that new modeling use the latest technology cost projections.

    • Long-term, consistent, predictable policy must be designed to reduce the level of “policy/regulatory risk” in the eyes of private investors. Policies that encourage predictable market economics, stable market development, and competition will stimulate private investment. This is the fundamental driver to further innovation, creating high quality new jobs and reducing risk to California taxpayers.

    • A policy framework is needed that encourages “smart” integration of distributed energy resources, including EV charging infrastructure to be used not only for local consumer benefit, but also to support the grid itself. Pilots are underway that treat homes and businesses as holistic grid resources. The pilot projects aggregate and intelligently control customer demand, on-site solar, energy storage, efficient appliances and EV charging to optimize cost not only for the customer, but also the entire grid. The realization of many aggregated smart microgrids is a pathway to greater reliability and resiliency. Policies need to ensure that such innovations have fair and cost-effective access to the grid and energy markets.

    • The electric grid in California needs to advance in step with the implementation of the Governor’s goals to support a robust wholesale and retail energy services market and facilitate optimal use of the new resources. Specifically, California grid stakeholders need to work proactively to overcome jurisdictional barriers and facilitate plug-and-play use of the electric grid.

    • A policy framework is needed to specifically address the economics of implementing rooftop solar, energy efficiency, energy storage and EV charging for landlords and tenants of rental properties, both commercial and residential. According to the UCLA Luskin Center, 65% of interest in new EV purchases in LA is from residents of multi-unit dwellings, but they are often limited from purchasing due to lack of access to near home/at home charging capability6 . Based on the data from the Residential Energy Consumption Survey, energy usage hinges in large part on the party responsible for paying the utility bill. For example, if landlords are paying the electricity bill, they are more likely to have purchased Energy Star appliances for their tenants7 .

    Governor Brown’s challenge, to “take significant amounts of carbon out of our economy without harming its vibrancy” is timely and achievable. Ultimately, prioritizing investment in the energy sources that drive local job creation - renewable energy, energy storage, EV charging infrastructure, and energy efficiency - will ensure the vibrancy of California’s economy for decades to come…

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