Carbon Management: A State Energy R

1
Carbon Management A State Energy RD Perspective

• Terry Surles
• California Energy Commission
• AAAS National Meeting Symposium on Carbon
  Management
• San Francisco, California
• February 17, 2001

2
Carbon Management An Approach for Integrated
Energy Systems Management
3
Why Worry about Energy?(Circa 12/98)

• Petroleum selling at lt 11/barrel
• Proven natural gas reserves at 175 Tcf and
  2/MBtu
• Abundant supply has depressed uranium prices (lt
  80/kg U)
• There is a lot of cheap coal (26/ton)
• Lots of generating capacity and reserve margin

4
Were Concerned Now

• Oil is at 30/barrel
• Natural gas price is at 18/Mbtu and demand (at
  least temporarily) is depleting reserves
• Energy use impacts global commons
  (7.4 Gt C/yr. in 1997)
• Deregulation has changed playing field
• New regulations and international policies
• Regional reserve margins are problematic

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Californias Concerns are Similar in Some Areas

• Increased natural gas use
• Continuing need for improvements in demand-side
  energy technologies
• Aging fleet of generators
• Financial constraints
• Climate change uncertainties
• NIMBY
• Needle peaks

6
California Context Additional Factors

• Demographics
• High-technology industrial sectors
• Social values
• Air quality
• Water availability and quality
• Seismic
• In-state RD excellence

7
CA Energy Use by Sector (1996)
13
46
13
31
8
Production of Electricity by Source - 1996
Wind/solar-0.0004 Geothermal- 0.2 Imports-
1.1 Oil- 2.2
Imports NG-15.5 Hydro- 32.6 Coal- 51.9
Wind/solar- 1.5 Biomass/waste- 2.3 Oil- 0.3
Nat Gas
8.4
Hydro
Imports
17.9
10.6
Nuclear
21.7
Natural Gas
30.6
18.9
Coal
Hydro
55.8
15.4
Nuclear
8
Coal
258,801 GWh
3,111,441 GWh
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Peak Demand is Increasing Faster than Newly
Installed Capacity
Megawatts
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Rising Peak Demand Threatens Reliability and
Power Quality
Number of Power Emergencies in California
During no touch periods, the ISO demands that
generators refrain from downtime for maintenance
11
Market Uncertainty- Price Volatility Impacts
Energy Delivery and Use
Market Clearing Price (/Megawatt-hour)
12
Contribution to ISO Peak DemandAugust 16, 2001
(MW)
MW
Commercial AC
6000
5000
Commercial Lighting
Residential AC
6000
Other
26,509
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2000/2001 Shocks Have Made Energy a Priority

• AB 970
• Expedited Siting for Simple Peaking Facilities
  and Facilities that Pose No Significant
  Environmental Risk
• Implementation of 50 M Energy Efficiency Grant
  Program
• AB 995
• Extends Surcharge to Fund Public Purpose
  Efficiency, Renewables, and RD Programs for 10
  years
• SB 1298 ARB to Establish Standards for DG
  Technologies
• SB 1345 Grants to Purchasers of Solar and DG
  Systems
• SB 1771 Establishes Greenhouse Gas Emissions
  Inventory
• New Legislation and Executive Orders

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California has Established a 62M/yr Public
Interest Energy Research Program (PIER)
Californias Energy Future
Quality Reliable and Available
Economy Affordable Solutions
Environment Protect and Enhance
15
Funded Program Areas to Date (in millions)
Supply 26.4 Renewables, EPAG Demand 40.1 Buil
dings, Ind/Ag/Water 34.9 Strategic,
Environmental
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Attributes for Addressing State Issues
Program Integration
Technology Partnerships - Universities -
Industry - Federal
Balanced Technology Portfolio -Temporal -Technol
ogy -Risk
Focus on California - Specific to State needs
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Our RD Program must Address Future Market
Scenario
Regulated
Status Quo

• New energy systems
• Same players

De-centralized
Centralized

• Same energy systems
• New players

Supermarket of Choices
De-regulated
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Given Our Limited Budget and California
Characteristics, Were Not Going to...

• Build the next GCM or other large scale models
• Work on Generation IV nuclear technologies
• Work on most Vision 21 coal technologies
• Duplicate other efforts well-funded by DOE, EPRI
  and others
• Duplicate specific RD already funded by industry

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We will Couple the California Context with
Precepts of Carbon Management

• End-use efficiency and demand-side technologies
• buildings and appliance technologies
• manufacturing, agriculture, water efficiency
• storage and conversion technologies
• Clean technologies
• renewables and small-scale fossil
• generation and control technologies that enhance
  environment
• power conditioning
• new technologies with collateral benefits
• Enabling technology improvement and development
• development of sensors, models, systems for
  real-time pricing
• models, sensors, monitoring systems to improve
  TD system operation and integration of DG
• science base and model improvements to evaluate
  impacts of energy systems
• development of new integrated systems and
  economic models to improve understanding of
  deregulated market structure

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Carbon Management and California An Appropriate
Paradigm for State RD Program
Environment Economy Reliability
Couple state and external issues
Integration with external RD provides flexibility
Long-term solutions couple to current events
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Carbon Management An Umbrella for Global,
National, State and Local Issues
Local - End use - NIMBY
Global - Climate Change - Resource Competition
Nation - Security - Environment - Economy
State -Affordability - Environment - Reliability