MUNI FSS Renewables, Climate Policy Martin Jirusek, PhD. U.S. energy consumption by energy source, 2017 Total = 97.7 quadrillion British thermal units (Btu) Total = 110 quadrillion Btu 2 Note. Sum of components may not equal 100% because of independent rounding. Source; US Energy Information Administration. Monthly Energy Review. Table 1.3 'fS and 10.1. April 2018. preliminary data Cid MUNI FSS U.S. energy consumption by energy source, 2018 Total = 101.3 quadrillion British thermal units (Btu) Total = 11.5 quadrillion Btu Note Sum of components may not equal total because of independent rounding Source. US Energy Information Administration. Monthly Energy Review. Table 1.3 and 10.1. April 2019, preliminary data CI 3. 3 • Solar (mainly PVs) and wind marked the biggest additions among RES MUNI FSS Share of U.S. energy consumption by major sources. 1776-2016 100% MM 80% 70% 60% 50% wood 40% 30% 20% 10% D' i ther renewable* —hydroelectric ^ 50% of total electricity production) Spring „oversupply" - usually squeezes other sources from the grid - Grid capacity issues , ,, m 14 In spring, hydro meets almost entire demand on NE - NW with the biggest potential for new projects MUNI FSS 15 U.S. electricity generation from renewable energy sources, 1950-2017 billion kilowatthours 1950 1960 1970 1930 1990 2000 2010 solar I wind geothermal Ibiomass I hydroelectric Note: Electricity generation from utility-scale facilities Hydroelectric is conventional hydro power. Source: US. Energy Information Administration, Monthly Energy Review, Table 7.2a, March 2013, preliminary data for 2017_ Cia MUNI FSS Grand Coulee Dam, Washington 16 MUNI FSS Hydro Power - Dominance of gravity dams - Limited amount of pumped hydro power plants - High initial (fixed) costs - Low variable (running) costs - Stable production (X solar, wind) 18 MUNI FSS Wind power - Texas, Iowa, California, Oklahoma, Illinois, Kansas, Minnesota, Oregon, Colorado, Washington, North Dakota, Wyoming = 80% of US overall wind capacity - W coast - oversupply of RES (hydro, wind, solar) Electricity generation from wind, by state (2013) - Fastest growing RES along with solar power 23x since 2000 Wind Power - Biggest addition to the overall RES capacity - Massive increase also thanks to governmental support Wind capacity and additions, 1998 - 2010 gigawatts (GW) 20 ■ cumulative wind capacity ■ wind capacity net additions Solar power Majority of sources are deconcentrated low-capacity sources (privately owned) California, Arizona, New Jersey, Nevada, Colorado Emission drop - E.g. Nevada 85% decrease between 2005-2015 (!), coal to phase out by 2023 Decline of initial costs (production costs, economy of scale,...) Increase of incentives - tax credits 14,00 on the federal level + state support Influx of renewables changing pricing patterns - E.g. Solar PVs in Nevada are currently practically 'worthless' -negative market price during the day (!) - Potential for ca. 10000 MW of solar power in Southern Nevada alone - Projects to concentrate solar power generation in larger clusters of 50 - 300 MW ü 8,000 -a s ü 6,000 5 a 3 4,000 21 Utility Commercial Residential Columns show annual capacity additions, area shows cumulative capacity 2007 2003 2009 2010 2011 2012 2013 2014 2015E 2016E 2017E 201SE 2019E 2020E Source: GTM/SEIA (2010-201S), Tracking the Sun Database RES and New Dynamics in Electricity Production and Consumption - Intermitent sources can be unpredictable - Growing dynamics put a greater pressure on the grid, which needs to be more robust and larger/interconnected to balance demmand/supply irregularities - Utilities and distributors have to recognize the new reality - Irregularities in electricity production - Shifting peak demands (from mid-day to late afternoon) that need to align with peak production (during the day and until ca. 3 hrs afte the sunset) - Case in point - Pacific NW (WA, OR) - growing stability even with growing amount of RES 22 MUNI FSS RES and New Dynamics in Electricity Production and Consumption - Need for a more 'communicative' grids, responsive consumers - two-way/smarter) grid - Former consumers may now sell domestically generated electricity to the grid - so far only solar - 'Prosumers' - Falling prices of electricity storage - pumped hydro, batteries - E.g. New water heaters must be equpped with a connection to the grid so they can be remotely shut off to levelize demand peaks - New related issues - e.g. Privacy - legal restriction on data collecting 23 MUNI FSS Other RES - Biomass - local use, not important on federal level - utilization of waste or in related facilities (sawmills, paper mills,...) - Geothermal - US - the world's leader in installed geothermal capacity - 3,4 GW - big potential, slower growth than wind and solar - used also for heating and cooling - Influencing factors - costs - technology - limited availability - grid inadequacy - remote areas - time-consuming construction - overall uncertainty MUNI RES - support - Aimed on private owners/operators - Push to implement market-based tools - Predominantly on state level - Compulsory standards for RES share in electricity mix for utilities - Non-binding goals (fir the future) - 3 ways to meet the RES share standards - RES-based production - purchase of certificates (REC) - Purchase of RES-based electricity - Offsets 26 MUNI FSS Stales arw torntorms wttti Renew Portfolio Standards States and temiortes with o voluntary ranewwbla energy standard or target RES - support - Federal level Efficiency standards, grant programs, educational programs - State level Loans supporting installation, (personal) tax credits and rebates Renewable Portfolio Standards (RPS) or Renewable Portfolio Goals (RPG) - RPS - real impact on consumers, may include tax credits - RPG - rather a declaratory effect (a more far-fetched goal), do not include tax credits Preferential grid access MUNI RES - conclusion - US faces similar issues as Europe - Problematic economy of traditional" base-load sources - support for RES - Relatively low initial costs in RES, deconcentrated production (except for hydro) - clash of principles - short-term economic logic vs. long-term planning 29 MUNI FSS Climate Policy An uneasy development Rising awareness in 1960s and 1970s EPA established in 1970 Conservative backlash and denialism in 1980 (Reagan's administrations) Global Climate Coalition - pro-inustry lobbying group against GHG mitigation Recognition of the issue in 1990s (1992 Rio de Janeiro Summit) US reluctancy under G. Bush Sr. series of rather declaratory or modest policies Non-ratification of the Kyoto Protocol Climate changes not seen as a ' winning issue' 30 MUNI FSS Climate Policy Clinton's administration (with VP Gore) more receptive to environmental issues, however, their actions remained limited (political unwillingness, Congress dominated by Republicans,...) Rather minor policies focused on efficiency and savings Persistent (mostly conservative/GOP) efforts to point out the costs of related policies and effect on economy Environmental topics gained more traction during 2000s, especially during democratic administration of B. Obama Clean Power Plan (2015) - to reduce emissions in power generation by 32% below 2005 levels by 2030 31 MUNI FSS Climate Policy - G.W. Bush - "Some of the scientists, I believe, haven't they been changing their opinion a little bit on global warming? There's a lot of differing opinions and before we react I think it's best to have the full accounting, full understanding of what's taking place." - BarackObama - "We risk consigning future generations to an irreversible catastrophe... The security and stability of each nation and all peoples - our prosperity, our health, and our safety - are in jeopardy, and the time we have to reverse this tide is running out." - Donald Trump "I'm not a believer in man-made global warming. It could be warming, and it's going to start to cool at some point. And you know, in the early, in the 1920s, people talked about global cooling...They thought the Earth was cooling. Now, it's global warming...But the problem we have, and if you look at our energy costs, and all of the things that we're doing to solve a problem that I don't think in any major fashion exists." 32 MUNI FSS Climate Policy - Current Trends Regional Greenhouse Gas Initiative Changes to the climate policy under Donlad Trump Apparent reverse of the trend set by previous administration(s) Trickle-down' effect on governmental bodies (incl. EPA) -support for greater use and extraction of hydrovcarbons (e.g. Keystone XL) -bid to repeal Obama's Clean Power Plan (32% cut in carbon emissions from power plants by 2030) - weakened version likely to be enacted -announced Paris Agreement withdrawal -Controversial picks for DoE and EPA (Rick Perry, Scott Pruitt, Andrew Wheeler) Decrease of carbon emissions thanks to changes in power generation (gas+RES vs. coal) -so far, market beats the government's policies (incl. the 'revival' of coal) States and cities have been spearheading the policy-related activities; no comprehensive federal policy State-level GHG reduction goals and carbon markets 100+ cities and counties commited to 100% clean energy Current RGGI States In Process of Joining the RGGI Market 33 MUNI FSS Climate Policy - Current Trends - 2 cap-and-trade systems - Regional greenhouse Gas Initiative (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont) - electricity generation - Western Climate Initiative (California, Quebec, Nova Scotia) - all fossil fuels-generated emissions - +1 (de facto) defunct - Midwestern Regional Greenhouse Gas Reduction Accord (Minnesota, Wisconsin, Illinois, Iowa, Michigan, Kansas, Manitoba + observers) However, C02 reductions mainly from efficiency and clean policies in power generation, not the C&T mechanism or other polluting sectors - Effect of coal-gas swap - Both systems need to be stricter (excess capacity of allowances) - Regional initiatives (transportation - TCI - New England and neighbours, etc.) MU FS Climate Policy - Current Trends - Two cape and trade systems - Regional Greenhouse Gas Initiative - Western Climate Initiative U.S. State Carbon Pricing Policies • RGGI CAP AND TRADE • RGGI CAP AND TRADE (PENDING) • BASELINE AND CREDIT • CAP AND TRADE I UNITED STATES OF AMERICA 35 - + C ART» Climate Policy - Current Trends Great polarization on the issue of (man-made) climate changes Party-dependent attitudes - (Reps. Vs. Dems.) Trump's administration has repealed a lot of previous policies withdrawal from the Paris agreement Clean Power Plan - critized by Trump's administration for harming the industry - repealed and replaced by (much milder) Affordable Clean Energy rule softened vehicle efficiency standards (light, medium and also heavy-duty) Relaxed restrictions on methane (O&G producers to regulate themselves) Trump did so using executive orders Many states decided to pursue even stricter goals that had been prescribed even before - incl e.g. Pipelines 36 debated Ironically, thanks to the administrative's reserved attitude towards the issue, it became much more MUNI FSS Climate Policy - Current Trends Climate policies are now very much state-based rather than government-induced, states lead the way Climate Alliance - bipartisan (!) group of the most progressive states commited to GHG reduction, following the Paris Agreement regardles the federal government's stance California, Colorado, Connecticut, Delaware, Hawaii, Maryland, Massachusetts, Minnesota, New Jersey, New York, North Carolina, Oregon, Puerto Rico, Rhode Island, Vermont, Virginia, Washington Massive GHG reduction targets 75%+ comp, to 1990 by 2045-2050 (or even net zero), up to 100 % RPS by 2045 Economy-wise would be 3rd country in the world 24 states (3/4 of the population) still subscribe to the Paris climate goals Regional cap and trade systems Climate policy □ Current changes often rather contradictory to environmentally favourable approach (crisis of NPPs, cheap gas, relatively cheap coal, ...) □ BUT... increase of deconcentrated RES □ Climate policy is more efficient on state level - „Petri dish" of new policies □ Voluntary initiatives (e.g. Energy Star) □ Started as a federal light-saving policy □ Emerged into a federal certification program of efficiency measures □ ICT, home appliances, buildings, industry □ Applied internationally (CAN, JPN, SUI, TAI); EU (expired 2018) □ Certification for products subscribing to Energy Star measures, intended also for US market □ Cut of federal funding? 38 ENERGY STAR Energy Efficiency - Often overlooked 'source' of electricity - Potentially, among the largest energy sources/pools in US - Growing focus on 'weatherization' (insulation, shading, etc.) - E.g. Pacific NW - growing population X declining electricity consumption since 2011 (thanks to efficiency and savings) - said to be 2nd biggest source of electricity in the region - Standards for meeting energy needs by specific share of efficiency Energy efficiency resource standards by state arranged by approximate annual electric savings target (2014 - 2020) measures 39 >2% 1.5-1.99 1 -1.49 .S-.99 <.5% NoEERS EERS/RES The Green New Deal Dems. sponsored policy comprehensive proposal package addressing the issue of climate change and sustainability No full-fledged act, no concrete policy, rather a set of ambitious goals Net-zero GHG emission scheme Infrastructural investments RES Smart grids Building upgrades Curbing agricultural emissions Highly divisive issue (GOP vs. Dems) - criticized fore being ' socialist', expensive, unrealistic and wasteful, ... Resolution rejected in 3/2019 40 - Remains as a policy driver for like-minded politicians and a 'punching bag' for opponents ^ JJ Jj ^ o o Total U.S. Greenhouse Gas Emissions by Economic Sector in 2017 Agriculture Industry 22% Electricity 28% 22,109 Alternative Fueling Stations in the United States - Seemingly high number Alternative fuels k 0.3% Hydrogen 0.3% Liquefied Natural Gas 5% Compressed Natural Gas 12% Propane - US as the leading world producer of ethanol ^^■^„% - Local and state projects to support electromobility (California) - Electromobility and higher efficiency in transportation (issue of single-occupancy vehicles - almost Vi of all vehicles in big cities) - City emissions - mainly transportation-related - Target of local policies (e.g. WA aims to exchange 50% of state fleet for EVs) 42 MUNI FSS Alternative fuels Light-Duty AFV, HEV, and Diesel Model Offerings, by Fuel Type T3 V Ol ■a o E 3 250 200 150 100 50 Hal :■■ ■ it llläilliš- 1991 Last updated. January 2019 Printed on: August 1 1995 1999 ""Nil iilll i s =: b ■ 11111! i II 2003 2007 2011 2015 E85 CNG (Dedicated and Bi-Fuel) Diesel Electric Vehicle* Hybrid Propane (Dedicated and Bi-Fuel) Hydrogen Methanol (M85) Alternative fuels - Alternative fuels/sources of mobility still rather marginal - FlexFuel as the most viable solution - Alternative fuels keep failing to offset rise of fuel sells globally - Biodiesel is more expensive than gasoline - lower EROEI than gasoline - Brasil as the top producer/consumer of biofuels - aims at exports to US - Clearly no will to repeal high import taxes on bofuels - that would be a support for foreign farmers at the expense of domestic production - politically unacceptable 44 MUNI FSS Electromobility • Regression of policies on the federal level under the Trump's administration • Federal incentives for EVs and PHEVs are being repealed • Car efficiency measures are being softened even beyond what manufacturers demanded • States lead the way in implementing incentives for alternative fuels, efficiency and saving measures • http://www.ncsl.org/research/enerqy/state-electric-vehicle-incentives-state-chart.aspx • VW settlement money partly invested into EV infrastructure • Environmental Mitigation Trust • Vehicle buyback 45