1. Developing the Next Generation of Energy Scenarios for California Guido Franco Team Lead for Climate Change and Environmental Research Sonya Ziaja Research Lead on the Energy-Water-Climate Nexus Research Division California Energy Commission IEPR Commissioner Workshop on the State of the Science on Scenarios to Deeply Reduce Greenhouse Gas Emissions from California’s Energy System July 24, 2015 1

2. Outline Background information. New research project with E3, LBNL/Berkeley, UC Irvine. Future research on long-term energy scenarios. 2

3. Background Information 3

4. Electricity LONG-TERM IMPACTS Need for more generation on hottest Days. Decreased thermal power plant generation Efficiency Need additional GW (8%) Peak period demand 21% higher cooling demand Need additional GW (27%) Substation loss 2.7% higher losses Need more GW (3.6%) Total required generation capacity. Need 39% more capacity GW Need for more transmission capacity. Transmission lines 7% - 8% loss of peak period capacity (static rating) NEAR-TERM IMPACTS Same as long-term but at a lesser degree. For example: Need additional capacity of 1.6 GW in the next 10 years (2013 IEPR) Source: Sathaye et al., 2013 4 Current Infrastructure & Future Climate

5. A rapid transformation of our energy system is required Reducing GHG emissions by 80% in the next 36 years has huge implications for the energy system. The electricity generating sector has multiple options to reduce GHG emissions. It must be decarbonized. Energy efficiency programs become even more important than before. Most energy services would be electrified (e.g., EVs, space heating). Recent work by E3, however, shows that in some scenarios, electrification is not needed in all cases (e.g., space heating). Net effect is an increase of electricity demand even with strongly enhanced energy efficiency programs. 5 California Average Hourly Generation Mix by Fuel, Imports and Exports, and Demand in 2050 for All Scenarios Wei et al., 2014 Climate change impacts not considered: energy scenarios WECC Average Power Cost by Investment Period ( 2013$/MWH )

6. 6 Comparative Power Costs Compatible with RCP 4.5 Compatible with RCP8.5 Hypothetical case. Solid lines are power “costs” not taking climate change into account. Broken lines include the costs associated with climate impacts (e.g., increased installed capacity increased to satisfy increased demand associated with higher temperatures). Externalities are not included. “The increase in system costs in the reference scenario to meet this additional demand is comparable to the change in system costs associated with decreasing power sector emissions by approximately 50% in 2050” MacFarland et al., Climatic Change. June 2015

7. CA’s Fourth Climate Change Assessment The California Natural Resources Agency (CNRA) is leading the preparation of California’s Fourth Climate Change Assessment: about 20 state agencies are involved. Report to the Governor in 2018. The Energy Commission is supporting energy-related research including studies of adaptation options for the energy sectors. The energy (CEC) and non-energy studies (CNRA) will use a common set of climate, sea level rise, and socio-economic scenarios. 7 DRAFT Pierce et al., 2015. Scripps Institution of Oceanography

8. New Research with E3, LBNL/Berkeley, UC Irvine 8

9. Integrating Mitigation & Adaptation Main “problems” with past studies: Past impact studies assume that the current energy system remains in place for the rest of this century Energy pathways do not consider climate change impacts, such as demand increases with temperatures or changes in the availability of hydropower. In practice, the energy system should be designed in a way that results in drastic GHG reductions by 2050 while deploying an energy system that is less vulnerable to climate impacts.* Microgrids that protect important services/areas Smart grid Distributed generation Other features 9 * “California’s energy system must change drastically over the next few decades in response to policy goals to reduce GHG emissions and increase the amount of renewable energy in the electricity mix. This evolution will require information that helps create a more climate-resilient energy system.” 2013 IEPR, p.322. San Diego Gas & Electric’s (SDG&E) Microgrid SDG&E’s Microgrid powered the community of Borrego Springs during planned grid maintenance, avoiding a major outage in June 2015.

10. One reference scenario based on prior work. The three groups will try to harmonize the input data such as technology costs and availability. The same climate and sea level rise scenarios as in California’s Fourth Climate Assessment. Estimation of physical impacts to the energy system (e.g., reduced efficiency in thermal power plants) including extreme climate events. Improved simulation of demand response. Improved assessment of availability of renewable sources of energy. Include other options besides electrification (e.g., H2 from renewables, biomethane, solar water heating). Three electricity models: PATHWAYS/REFLEX (E3); HiGRID (UCI); SWITCH (Berkeley). More in-depth consideration of transportation and movement of goods. Follow-up of E3’s bioenergy study. More in-depth distribution scenarios. 10 Potential Features of the New Research with E3, LBNL/UCB, UCI

11. Thank you ! Guido Franco 916 327 2392 guido.franco@energy.ca.gov Sonya Ziaja 916 327 3424 sonya.ziaja@energy.ca.gov 11 Disclaimer: The views and opinions in this presentation do not necessarily represent the views and opinions of the Energy Commission or the State of California.