[Sent to Covered Activities and Resource Mapping working groups on Oct. 21, 2011.]

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1 2040 and 2050 Acreage Needs for Renewable Generation Dave Vidaver, Electricity Analysis Office, California Energy Commission In order to inform the DRECP process, Energy Commission staff formulated renewable development scenarios for 2040 and 2050 under the assumption that the state s electricity will strive to meet a GHG emission reduction target of 80% below 1990 values in Doing so requires a dramatic reduction in electricity generation using fossil fuels. All the more so as electricity consumption is expected to dramatically increase as the transportation sector is electrified in the course of meeting similar emission reduction goals. The amounts of incremental renewable energy required in 2050 to meet the GHG reduction target may be in excess of 400,000 GWh, roughly ten times what is currently in place to serve California loads. While the scenarios developed by staff assume that one-quarter of this will be met by out-of-state resources, meeting the remaining need in the reference case required 22,000 to 33,000 MW of central station solar, a lion s share of which is assumed to be in the DRECP. In addition, 19,000 MW 28,000 of wind is required, despite assuming both that baseload renewable resources (geothermal, biomass) will be at levels that exceed current expectations regarding economic/technical potential, and distributed generation will far exceed current targets. It should be noted that the renewable resource portfolios developed in each of the scenarios were not constrained by the need to meet demand as represented by an assumed load shape. For example, most representations of futures in which the transportation sector is substantially electrified assume a substantial increase in offpeak loads, and thus the need for generation, both renewable and otherwise, that is available during off-peak hours. Here staff assumes that the scenarios developed are plausible given the potential for technological advance, (e.g., improvements that allow for large amounts of distributed generation, advances in storage technologies), combined with the availability of hydroelectricity and wind during off-peak hours and the potential for load-shifting. It should also be noted that staff does not consider the potential impacts of climate change on the amount of hydroelectric energy available. Reductions in hydroelectric energy would require additional energy from zero-carbon resources in order to leave GHG emissions unchanged. The user can change available large hydro (and small hydro through changes in existing renewable resources still operating) to reflect the impacts of climate change. 1

2 Assumptions Common to All Scenarios Demand growth due economic/demographic factors through 2050 is assumed to be1.5%/year, consistent with both recent historical trends and economic/demographic projections through used by the Energy Commission s Demand Analysis Office. Staff considered reductions in the growth rate as suggested by several stakeholders; parties may use different assumptions in their investigations. A reduction in the growth rate of 10%, from 1.5%/year to 1.35%/year results in a decrease in incremental renewable energy needs in 2040 (2050) from 194,000 GWh (385,000 GWh) to 176,000 GWh (362,000 GWh) The long-run effectiveness of energy efficiency (-0.834%/year) is assumed to be slightly above the average (-0.81%/year) but below that which assumes the efficacy associated with BBEES (-0.934%/year through 2020 in the mid-case). A recent analysis indicates that annual funding for energy efficiency may have to increase dramatically over the coming decades to maintain the level of benefits projected from current expenditures. Potential different assumptions and their impact are illustrated in Table 1. Table 1: Energy Efficiency Assumptions High Value Selected Value Low Value Annual Impact on Energy Demand Change in Incremental Renewable Energy Need 2040 Change in Incremental Renewable Energy Need % % % (10,385) - 10,809 (15,158) - 15,787 The targeted percentage reduction in GHG emissions for 2040 compared to 1990 levels for the electricity sector, assumed to be met is 58%. This represents a linear interpolation between the reductions associated with meeting a 43% renewable portfolio standard in 2030 and a targeted 80% reduction in Eight percent of the reductions are met with offsets from other sectors of the economy, yielding an effective carbon cap of 54.0 MMT. This declines to 30.6 MMT in

3 35,000 GWh of renewable energy is assumed to be provided by existing in-state renewable resources still operating or replacement resources located at the same sites. This represents all existing in-state renewable resources as of Both in-state nuclear facilities are assumed to be out of service. Palo Verde (Arizona) is assumed to still be operating in 2040, but out of service in (it is licensed through 2047) and providing 6,000 GWh in service of California loads, consistent with the current California share of ownership. No new nuclear facilities are assumed to be built. The entire 6,000 GWh of Palo Verde output devoted to California loads must be replaced by renewable (or other zero-carbon) resources. 18 million hybrid and full electric vehicles are assumed to be in use in 2040, consistent with a non-linear path to the more than 40 million such vehicles needed by 2050 to meet the state s economy-wide goals for GHG emission reductions (41.6 million vehicles are assumed in 2050). The assumed penetration is non-linear, with more than half of the electrification of the transportation sector assumed to occur during This is based on the assumption that drivers of penetration (high petroleum prices, technological advancement/cost reductions for full electric and hybrid vehicles) are more likely to be favorable the farther out one goes in time. No renewable resources are assumed to be built in California to serve out-of-state loads. Staff assumed that lower development costs and high quality resources out-ofstate will encourage development of such resources to meet out-of-state loads/ procurement obligations. No fossil generation with sequestration is assumed. While the Acreage Calculator enables the user to do so, the scenarios developed by staff do not assume the potential to sequester carbon produced by the electricity sector in the course of natural gas-fired (or coal-fired) generation, which would allow for more fossil generation under the GHG cap, and, in turn, reduce the need for renewable energy/acreage. Recent and ongoing efforts to develop and deploy sequestration technologies are plagued by high costs and technology constraints/obstacles that may prove difficult to overcome; staff believes that development of biogas is very likely to remain a much more cost-effective way of adapting (dispatchable) combustion technologies for a low-carbon future. The efficiency of natural gas-fired generation is assumed to be 7,400 Btu/kWh. This is well below the average efficiency of the current fleet but above that of modern combined cycles. Staff assumes that relatively inefficient cogeneration facilities will cease operation, but that (a) demands on gas-fired resources to cycle and operate at well below full load in order to integrate large quantities of variable energy resources 3

4 and (b) the need for dispatchable peaking resources will result in average efficiencies at roughly this level. The percentage of total energy (net energy for load) needed to be stored is assumed to be 10%. Storage creates a need for additional renewable energy as the share of stored energy lost (due to less-than-perfect efficiency) needs to be replaced with (additional) renewable energy. 30% of the energy stored is assumed to be lost and needs to be replaced. All of this replacement energy needs to come from Staff s assumptions create the need for 11,959 GWh in 2040 and 15,624 GWh in 2050, all of which must be provided by renewable or zero-carbon resources. High-speed rail was assumed to be developed during the 2040 s, requiring 13,000 GWh of energy in the 2050 scenario Renewable energy from out-of-state was assumed to provide 25% of the renewable energy required to meet the GHG reduction target in each scenario. This value is consistent with the Renewable Portfolio Standard recently established by SB2. Acreage requirements (per MW) associated with each technology were held constant across each scenario. Staff believes that it is not realistic to assume that changes in the acreage requirements associated with a given technology can be projected with accuracy or that an aggregate change in these requirements due to across-the-board technological change can be posited with any confidence. The acreage values used are in Table 2. Table 2: Acreage Requirements for Central Station Renewable Technologies Technology Acres/MW Central station solar thermal 7.1 Central station photovoltaic 9.1 Wind 40 Geothermal 6.0 Biomass Utility Side Solar DG Conversion of existing gas-fired plants to use of biogas and development of large central station facilities combusting biogas assumed to have no acreage requirement. 2 80% of capacity assumed to have acreage requirement 4

5 60/40 Reference Cases For the purpose of illustration staff created 2040 and 2050 reference case portfolios, developing central station solar and wind to reflect 60/40 and 40/60 shares of energy from these sources on a statewide basis after making specific assumptions about energy/capacity from other resources 2040 Scenario The 2040 reference case scenarios posited an incremental need for 194,000 GWh of renewable energy to meet a 58% reduction in GHG emissions from 1990 levels. Staff s assumptions regarding central station resources other than solar and wind are presented in Table 3. Table 3: 2040 Reference Cases, Baseload and DG Resource Development, Statewide, MW Geothermal 3,500 Biomass 1 3,000 Utility Side Solar DG 2 11,000 Small Rooftop PV 10,000 CHP 4,500 1 Conversion of existing gas-fired plants to use of biogas and development of large central station facilities combusting biogas assumed to have no acreage requirement. 1,000 MW assumed to have acreage requirement. 2 80% of capacity was assumed to have an acreage requirement. Staff then developed two scenarios for the resources developed to meet the remaining renewable energy needed. The first assumed that 60% of the energy will be provided by central station solar (2/3 of the capacity PV, 1/3 solar thermal), 40% by wind. The second assumed 40% of the energy would be provided by solar, 60% by wind. The resulting statewide MW values for central station solar and wind are presented in Table 4. 5

6 Table 4: 2040 Reference Cases, Central Station Intermittent Resource Development, Statewide, MW 2040 Solar/Wind 60/40 Solar/Wind 40/60 CS Solar Thermal 4,900 3,250 CS Solar PV 9,800 6,500 Wind 8,350 12,500 Only a share of these resources were assumed to be in the DRECP; staff assumed that All central station solar thermal is located in the DRECP 70% of central station solar PV is in the DRECP 50% of the wind is in the DRECP 3,000 MW of the geothermal is in the DRECP 250 MW of the acreage-intensive biomass is in the DRECP 27.5 % of the utility-side DG is located in the DRECP The Solar/Wind 60/40 case yielded values presented in Table 5. 6

7 Table 5: 2040 Solar/Wind 60/40 Case, Allocation of Resources to DRECP and Resulting Acreage 2040 Statewide MW Share in DRECP DRECP MW Acres CSST % 4,900 45,455 CSPV 9,800 70% 6,860 62,364 Wind 8,350 N/A 4, ,000 Geothermal 3,500 N/A 3,000 18,072 Biomass 3,000 N/A DG Utility Side 11, % 3,025 22,000 Total 315,516 1 Only 80% of this capacity is assumed to have an acreage requirement 7

8 The Solar/Wind 40/60 case yielded values presented in Table 6. Table 6: 2040 Solar/Wind 40/60 Case, Allocation of Resources to DRECP and Resulting Acreage 2040 Statewide MW Share in DRECP DRECP MW Acres CSST 3, % 3,250 29,545 CSPV 6,500 70% 4,550 41,364 Wind 12,500 N/A 6, ,000 Geothermal 3,500 N/A 3,000 18,072 Biomass 3,000 N/A DG Utility Side 11, % 3,025 22,000 Total 361,606 1 Only 80% of this capacity is assumed to have an acreage requirement 2050 Scenarios Staff extrapolated the analysis to 2050 to estimate the potential magnitude of incremental needs over a longer period. The resulting energy and acreage needs are much larger than in 2040 for several reasons. Demand growth increases total energy needs by 20,000 30,000 GWh (5.3% 6.7%). The percentage increase in incremental renewable energy needed is greater ( %) as all of the energy must come from zero-carbon resources. GHG emission reductions are increased from 58% of 1990 levels to 80%. This reduces allowed GHG emissions from 54.0 mmt to 30.6 mmt (and increases (incremental) needed renewable energy by 60,000 GWh in each scenario ( %) 8

9 Electrification of the transportation sector accelerates dramatically, with the number of vehicles increasing from 18 million to 41.6 million. This increases energy needed and thus incremental renewable energy needed from renewable resources by 100,000 GWh ( %) The Palo Verde nuclear plant is assumed to be retired. The 6,000 GWh must now be provided by renewable resources (an increase of %) The cumulative impact of these four developments is to increase incremental renewable energy needs to 385,000 GWh. The statewide portfolio developed to meet this roughly doubled the amounts of each class of resources. The values for geothermal and biomass are at the very upper end of what is currently deemed to be technical/economic potential and thus implicitly assumes technological advance in the development of these resources/fuels. These assumptions reduce the overall acreage requirements for renewable energy by reducing the amount of wind and solar needed to meet GHG reduction targets, and are presented in Table 7. Table 7: 2050 Reference Cases, Baseload and DG Resource Development, Statewide, MW Geothermal 7,000 Biomass 1 6,000 Utility Side Solar DG 2 22,000 Small Rooftop PV 12,000 CHP 6,500 1 Conversion of existing gas-fired plants to use of biogas and development of large central station facilities combusting biogas assumed to have no acreage requirement. 2,000 MW assumed to have acreage requirement. 2 80% of capacity was assumed to have an acreage requirement. Staff s assumptions regarding the share of central station resources on a percentage basis in the DRECP remained unchanged from the 2040 scenarios. The remaining central station resources were allocated to the DRECP as follows: 4,000 MW of geothermal is in the DRECP, an increase of 1,000 MW over the 2040 reference case MW of the acreage-intensive biomass is in the DRECP.

10 The resulting statewide MW values for central station solar and wind are presented in Table 8. Table 8: 2050 Reference Cases, Central Station Intermittent Resource Development, Statewide, MW 2050 Solar/Wind 60/40 Solar/Wind 40/60 CS Solar Thermal 11,000 7,400 CS Solar PV 22,000 14,800 Wind 18,900 28,400 The Solar/Wind 60/40 case yielded values displayed in Table 9. Table 9: 2050 Solar/Wind 60/40 Case, Allocation of Resources to DRECP and Resulting Acreage 2050 Statewide MW Share in DRECP DRECP MW Acres CSST 11, % 11, ,000 CSPV 22,000 70% 15, ,000 Wind 18,900 N/A 9, ,000 Geothermal 7,000 N/A 4,000 24,096 Biomass 6,000 N/A DG Utility Side 22, % 3,025 44,000 Total 686,721 1 Only 80% of this capacity is assumed to have an acreage requirement 10

11 The Solar/Wind 40/60 case yielded the values in Table 10. Table 10: 2050 Solar/Wind 40/60 Case, Allocation of Resources to DRECP and Resulting Acreage Statewide MW Share in DRECP DRECP MW Acres CSST 7, % 7,400 67,273 CSPV 14,800 70% 10,360 94,182 Wind 28,400 N/A 14, ,000 Geothermal 7,000 N/A 4,000 24,096 Biomass 6,000 N/A DG Utility Side 22, % 6,050 44,000 Total 798,176 1 Only 80% of this capacity is assumed to have an acreage requirement 11