Power Assoc. of Northern California Climate Change (and energy bills) The Problems are the US and China A Partial Solution is California Arthur H. Rosenfeld, Commissioner California Energy Commission (916)

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5 How Much of The Savings Come from Efficiency? uEasiest to tease out is cars –In the early 1970s, only 14 miles per gallons –Now about 21 miles per gallon –If still at 14 mpg, we’d consume 75 billion gallons more and pay $225 Billion more at 2006 prices –But we still pay $450 Billion per year –If California wins the “Schwarzenegger-Pavley” suit, and it is implemented nationwide, we’ll save another $150 Billion per year uCommercial Aviation improvements save another $50 Billion per year uAppliances and Buildings are more complex –We must sort out true efficiency gains vs. structural changes (from smokestack to service economy).

6 How Much of The Savings Come from Efficiency (cont’d)? uSome examples of estimated savings in 2006 based on 1974 efficiencies minus 2006 efficiencies uBeginning in 2007 in California, reduction of “vampire” or stand-by losses –This will save $10 Billion when finally implemented, nation-wide uOut of a total $700 Billion, a crude summary is that 1/3 is structural, 1/3 is transportation, and 1/3 is buildings and industry.

7 A supporting analysis on the topic of efficiency from Vice-President Dick Cheney u“ Had energy use kept pace with economic growth, the nation would have consumed 171 quadrillion British thermal units (Btus) last year instead of 99 quadrillion Btus” u“About a third to a half of these savings resulted from shifts in the economy. The other half to two-thirds resulted from greater energy efficiency” Source: National Energy Policy: Report of the National Energy Policy Development Group, Dick Cheney, et. al., page 1-4, May 2001 Cheney could have noted that 72 quads/year saved in the US alone, would fuel one Billion cars, compared to a world car count of only 600 Million

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10 Carbon Dioxide Intensity and Per Capita CO2 Emissions (Fossil Fuel Combustion Only) intensity (tons of CO2 per 2000 US Dollar) Tons of CO2 per person Canada Australia S. Korea California Mexico United States Austria Belgium Denmark France Germany Italy Netherlands New Zealand Switzerland Japan

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15 Impact of Standards on Efficiency of 3 Appliances Source: S. Nadel, ACEEE, in ECEEE 2003 Summer Study, 75% 60% 25% Year Index (1972 = 100) Effective Dates of National Standards = Effective Dates of State Standards = Refrigerators Central A/C Gas Furnaces SEER = 13

16 Source: David Goldstein

17 Source: David Goldstein

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21 United States Refrigerator Use, repeated, to compare with Estimated Household Standby Use v. Time Average Energy Use per Unit Sold (kWh per year) Refrigerator Use per Unit 1978 Cal Standard 1990 Federal Standard 1987 Cal Standard 1980 Cal Standard 1993 Federal Standard 2001 Federal Standard Estimated Standby Power (per house)

Gorges 三峡 Refrigerators 冰箱 Air Conditioners 空调 TWh 2000 Stds 2005 Stds If EnergyStar TWH/Year Value (billion $/year) Comparison of 3 Gorges to Refrigerator and AC Efficiency Improvements Savings calculated 10 years after standard takes effect. Calculations provided by David Fridley, LBNL Value of TWh 3 Gorges 三峡 Refrigerators 冰箱 Air Conditioners 空调 Wholesale (3 Gorges) at 3.6 c/kWh Retail (AC + Ref) at 7.2 c/kWh 三峡电量与电冰箱、空调能效对比 标准生效后， 10 年节约电量

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26 Illuminating Space vs. the Street

27 Figure 8 Comparison of EE Program Costs to Supply Generation Costs Average Cost of EE Programs for Base Load GenerationShoulder GenerationPeak Generation $/kWh Demand Supply Options

28 California IOU’s Investment in Energy Efficiency Forecast Profits decoupled from sales Performance Incentives Market Restructuring Crisis IRP 2% of 2004 IOU Electric Revenues Public Goods Charges

29 Critical Peak Pricing (CPP) with additional curtailment option Price (cents/kWh) Standard TOU Critical Peak Price Standard Rate Sunday Monday Tuesday Wednesday Thursday Friday Saturday Extraordinary Curtailment Signal, < once per year CPP Price Signal 10x per year ? Potential Annual Customer Savings: 10 afternoons x 4 hours x 1kw = 40 kWh at 70 cents/kWh = ~$30/year

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31 Demand Response, Retail Pricing Pilot, and Advanced Metering Infrastructure uCPUC and CEC have been testing the impact of “CPP” (Critical Peak Pricing) on demand –Two summers of tests ($10 M experiment). uResults for residential customers –12% reduction when faced with critical peak prices and no technology –30% to 40% reduction for customers with air conditioning, technology, and a critical peak price. uPG&E and SDG&E will install advanced meters soon

32 Source: Response of Residential Customers to Critical Peak Pricing and Time-of-Use Rates during the Summer of 2003, September 13, 2004, CEC Report. Residential Response on a typical hot day Control vs. Flat rate vs. CPP-V Rate ( Hot Day, August 15, 2003, Average Peak Temperature ) CPP rates – Load Impacts

33 Fraction of Customers on CPP Rates with Lower bills in 2004 and Residential and Small Commercial Fraction of Customers on CPP Rates with Lower bills in 2004 and Residential and Small Commercial

34 Customer Acceptance of CPP rates Should all customers be placed on a dynamic rate and given an option to switch to another rate? Should dynamic rates be offered to all customers? Definitely Probably 95% 69% 65% 73% 61% 69% 22% 30% 20% 26% 17% 0%20%40%60%80%100% Total TOU CPP-F CPP-V Info Only % 93% 87% 86% 43% 39% 46% 41% 21% 28% 17% 23% 22% 0%20%40%60%80% TOTAL TOU CPP-F CPP-V Info Only % 67% 63% 64% 63% Residential participants express a strong interest in having dynamic rates offered to all customers. Source: Statewide Pricing Pilot: End-of-Pilot Customer Assessment, December 2004, Momentum Market Intelligence.

35 Source: Webster, et. al, Science Vol. 309

36 Source: Stabilization Wedges: Pacala and Socolow, Science Vol 305, page 968 Growth = 1.5%/yr