Presentation is loading. Please wait.

Presentation is loading. Please wait.

CALIFORNIA ENERGY COMMISSION National Heat Transfer Meeting AICHE & ASME Terry Surles California Energy Commission Technology Systems Division June 13,

Similar presentations

Presentation on theme: "CALIFORNIA ENERGY COMMISSION National Heat Transfer Meeting AICHE & ASME Terry Surles California Energy Commission Technology Systems Division June 13,"— Presentation transcript:

1 CALIFORNIA ENERGY COMMISSION National Heat Transfer Meeting AICHE & ASME Terry Surles California Energy Commission Technology Systems Division June 13, 2001

2 CALIFORNIA ENERGY COMMISSION Why Worry about Energy? (Circa 12/98)  Petroleum selling at < $11/barrel  Proven natural gas reserves at 175 Tcf  Abundant supply (~Mt) has depressed uranium prices (< $80/kg U)  There always was a lot of cheap coal (~$26/ton)  Perception of adequate generating capacity and reserve margin

3 CALIFORNIA ENERGY COMMISSION We’re Concerned Now  Oil is at $30/barrel, modification of economy  Natural gas price has peaked at $60 and demand (at least temporarily) is depleting reserve capacity  Energy use impacts global commons (7.4 G + C/yr. in 1997)  Deregulation has changed playing field  New regulations and international policies  Regional reserve margins are problematic


5 CALIFORNIA ENERGY COMMISSION California Must be Prepared to Face the Same Issues as Others Must  Economics w Resource competition w Difficulty for new technology market penetration  Environment w Climate change w Life cycle analysis for contaminants  Security w Oil, nuclear materials Energy costs fundamentally affect our overall economy

6 CALIFORNIA ENERGY COMMISSION Energy Challenges - Most are Not Unique to California  Population growth, improved standard of living  Increased reliance on natural gas  Continued reliance on oil  Continued need to improve process and end-use energy efficiency and demand-side management  Demand spikes, “needle peaks”  Use of older generating facilities  Financial constraints  climate change initiatives  NIMBY, NIMTOO concerns

7 CALIFORNIA ENERGY COMMISSION  Demographics  High-technology industrial sectors  Social values  Air quality  Water availability and quality  Seismic  In-state R&D excellence California Context

8 CALIFORNIA ENERGY COMMISSION Major Forces at Work  Governance w PURPA: renewables, co-generation w EPA/1992: transmission to non-utilities, merchant plant development w Competition, increased use of market-based approaches  Environment w Sustainable w Emphasis on environmental impact w NIMBY w Leads to less reliance on coal, nuclear  Technology w Shift from large central-station constructed energy to smaller more modular, flexible-manufactured energy w Increased role of information technology w Emphasis on Natural Gas

9 CALIFORNIA ENERGY COMMISSION Mid 90’s: California makes the Move to Deregulation  Gas turbine technology works w Natural gas prices drop, potential for cheaper electricity  Large industrial customers push deregulation  Margaret Thatcher deregulates the UK w PUC and utilities visit UK  PUC published blue book (blueprint for AB 1890)  PUC plans for future electric system (1994) w Balanced plan for future including fossil, renewables and energy efficiency

10 CALIFORNIA ENERGY COMMISSION AB 1890 Arrives: Legislation Passes, No Dissenting Votes  Utilities move out of generation to run distribution wires, lease transmission to ISO  New (to CA) players buy 18,000 MW  No long-term contracts  Utility stranded costs recovered through retail cap  Public purpose programs w support for renewables, efficiency, R&D

11 CALIFORNIA ENERGY COMMISSION AB 1890 Arrives: Underlying Assumptions  Enough capacity reserves  new power plants cost less than old ones  Old, dirty power plants will be retired  There would be robust competition, wholesale and retail Consumer would have accurate information on power use and options to switch to alternative providers

12 CALIFORNIA ENERGY COMMISSION California Energy Retrospective  Previous system wasn’t broken  Market power became concentrated w profits up by selling more for less  No price signal for end users  Loss of momentum on demand side management w 10GWh saved by early 1990’s w Restructuring derails utility DSM  1.4 GW of renewable cancelled w “No need” w Price was above cost to utilities  Results w Demand up 0.7%, price up 1300% w Blackouts with 28 GW load, with ~50 GW capacity

13 CALIFORNIA ENERGY COMMISSION Summary of Market Performance for April 1998 to December 2000  Average market power mark up for w Calendar year 1999 - $4/MWh w Calendar year 2000 - more than $40/MWh w January 2001 - more than $130/MWh  Wholesale energy and ancillary services cost w 7 billion for 1999 w 27 billion for 2000 w 70 billion for 2001 (estimated from January and February 2001)

14 CALIFORNIA ENERGY COMMISSION California Electricity Problems: Non-Causes  “Soaring electricity demand” w 1990 - 1999 only 1.1% per year  “Huge electricity demand from Internet” w Claimed 8-13% of electricity demand w Actual 2-3% and growing slowly  “Environmental regulations prevented power plants” w Uncertainty, restructuring and stranded costs chilled construction  “California built no power plants in 1990s” w Added 4010 MW, most small scale  “Fuel shortage”

15 CALIFORNIA ENERGY COMMISSION California Electricity Issues  Tightened regional power pool reserves w CA is 40% of WSCC, but 15% of peak rise ‘95- ’99 w As biggest net importer, got the most volatility  Coordinated maintenance scheduling and systems operations lost in deregulation w Maintenance contracts expired in Autumn ‘00 w New players had no incentive against outages  One-in-75 year drought in Pacific Northwest

16 CALIFORNIA ENERGY COMMISSION % of population growth 1990-2000 State % of yearly energy consumption growth 1988-1998 Energy Demand and California Population Growth

17 CALIFORNIA ENERGY COMMISSION Reported Capacity Outages (1999 vs. 2000) Avg. Daily Outages (MW)

18 CALIFORNIA ENERGY COMMISSION Generator Outages in California Average of total megawatts off-line by month MW 199920002001 Jan. 1999 3,086 MW April 2001 14,990 MW

19 CALIFORNIA ENERGY COMMISSION California Stage 1-3 Alert Number of Statewide Electricity Alerts by Year (through June 18, 2001)

20 CALIFORNIA ENERGY COMMISSION California Energy Issues: Interdependencies  Relationship of natural gas to electricity use w storage down 87% from 11/99 to 11/00 w Generators pass through spot gas prices w $3 to $60 MBtu from 12/12/99 to 12/12/00  1-in-75 year drought will cause increased gas demand w 600 Bcf in west, 225 Bcf in So Cal  SONGS outage reduces 1100 MW of generating capacity w increase gas demand by 200 Mcfd  First cold winter in US in three years w price up all over, higher in CA

21 CALIFORNIA ENERGY COMMISSION Key Program Elements  New Generation Construction  12 new major plants licensed since 4/99 (8.5 GW)  4 new power plants on-line this summer  3 new power plants on-line next summer  10 new major power plants in application review process  Has reduced power plant construction approval time by at least 50%

22 CALIFORNIA ENERGY COMMISSION 2000 Net Power System Eligible Renewables Biomass & Waste- 2.3 Geothermal - 4.6 Small Hydro - 3.0 Solar - 0.4 Wind - 1.5

23 CALIFORNIA ENERGY COMMISSION New Generation Approved and Under Construction (6557 MW) MW per Plant June 2001

24 CALIFORNIA ENERGY COMMISSION Key Program Elements  Demand Reduction Program  Programs designed to reduce electricity usage by approximately 10%  Leverages integrated set of programs w 20/20 for residential and commercial/industrial w Demand buybacks and uninterruptibles w Energy efficiency w Public education and outreach

25 CALIFORNIA ENERGY COMMISSION California: policy really does work MWh per person-year

26 CALIFORNIA ENERGY COMMISSION Contribution to ISO Peak Demand August 16, 2001 (MW) Commercial AC Commercial Lighting Residential AC Other MW 6000 5000 6000 26,509

27 CALIFORNIA ENERGY COMMISSION We Must be Prepared to Address Future Market Scenarios Regulated De-regulated De-centralizedCentralized Status Quo New energy systems Same players Supermarket of Choices Same energy systems New players

28 CALIFORNIA ENERGY COMMISSION AB 995: Public Goods Program  Energy efficiency: $228M annually (administered by the CPUC/CBEE)  RD&D: $62.5M annually  Renewables: $135M annually (administered by the Energy Commission)  Renewed for ten years

29 CALIFORNIA ENERGY COMMISSION California has Established a $62M/yr Public Interest Energy Research Program (PIER) California’s Energy Future Economy: Affordable Solutions Quality: Reliable and Available Environment: Protect and Enhance

30 CALIFORNIA ENERGY COMMISSION Vision Statement The future electrical system of California will provide a clean, abundant and affordable supply tailored to the needs of “smart”, efficient customers and will be the best in the nation. Tailored, clean, abundant, affordable supply Smart, efficient customers

31 CALIFORNIA ENERGY COMMISSION Attributes for Addressing State Issues Program Integration Balanced Technology Portfolio - Temporal -Technology -Risk Technology Partnerships - Universities - Industry - Federal Focus on California - Specific to State needs

32 CALIFORNIA ENERGY COMMISSION We Will Have a Balanced Technology Portfolio  Breadth of technology choices  Development state: temporal goals  Risk options  Impact Roadmapping technology selection to address California issues

33 CALIFORNIA ENERGY COMMISSION Efficient Funding and Management: Enhancing Partnerships and Collaborations  US DOE and their laboratories- opportunities for co-funding  EPRI, GTI - co-funded, targeted memberships, technical support  California Agencies - Cal/EPA, Trade & Commerce, CalTrans  Utilities - market transformations, linkage among public goods programs  Private Sector - associations, individual companies  Universities - R&D, technical support

34 CALIFORNIA ENERGY COMMISSION Given Our Limited Budget and California Characteristics, We’re 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 R&D already funded by industry

35 CALIFORNIA ENERGY COMMISSION PIER will Attack Problems that will Make a Difference to California’s Future  Lead in decreasing building energy use through research in energy efficient technologies, tools and strategies.  Align closely with DOE/OIT for petroleum refining and work with EPRI and Cal/EPA on electronics industry  Develop technologies that produce collateral benefits, e.g. water re-use  Lead in the development of distributed generation technologies  Develop communication and control systems to improve the effectiveness of both distributed generation and demand reduction technologies  Develop storage and conversion technologies to improve overall efficiency and quality/reliability of electricity generation  Innovate technology development for addressing reliability and vulnerability of transmission and distribution systems  Lead in establishing a scientific foundation for environmental standards, regulations, and mitigation measures affecting existing and developing technologies  Develop tools to help customers deal with price volatility

36 CALIFORNIA ENERGY COMMISSION Energy and Economy Ranking

37 CALIFORNIA ENERGY COMMISSION California Electricity (GWh) Use by Industrial Sector

38 CALIFORNIA ENERGY COMMISSION California Employment by Industrial Sector

39 CALIFORNIA ENERGY COMMISSION Technical Issues that are Affecting California Industry: Reducing Cost of Production  Need for electricity reliability - up to six 9s  High electricity costs  Expensive natural gas  Emission issues  Transmission constraints  Industrial capacity constrained by limits on available power, natural gas and emission credits  Power quality - due to highly digital economy  Water shortage and need to treat waste streams  Very high consumption of date centers/network farms

40 CALIFORNIA ENERGY COMMISSION Non-technical Issues  PIER/Industry collaborations - we are providing cost-shared R&D  Proof before risking capital on new technology demonstrations  First cost too high - we are providing buy-downs for promising but performing technologies  Permitting takes too long - CEC is streamlining

41 CALIFORNIA ENERGY COMMISSION PIER will Achieve Longer-Term Goals by Focusing on:  Specific collaborative partnerships  Specific technologies and consortia  Targeted user consortia  Policy modifications on state and national level  Analytical tools to support program modifications and decision making

42 CALIFORNIA ENERGY COMMISSION PIER will Develop into a Robust Institution Appropriate for California’s World-Class Economy  California context: we can “frame the debate” on a national level  Funding where “we make a difference” in reinventing the business  Market transformation: working with the private sector  Develop a sustainable organization that will provide a stream of benefits to California

43 CALIFORNIA ENERGY COMMISSION Funded Program Areas to Date (in millions) Supply$30.9 Renewables, EPAG Demand$40.6 Buildings, Ind/Ag/Water $37.1 Strategic, Environmental

44 CALIFORNIA ENERGY COMMISSION In Summary  Near-term: need to get through this summer  Mid-term: need to collaborate effectively to get new technologies in the marketplace  Long-term: need to work on new approaches to “change the rules of the game”

45 CALIFORNIA ENERGY COMMISSION Next Steps  Diffuse excess market power  Address potential for supply overshoot  Change buyer’s mentality w Education - it’s more than flicking a switch w Take control - it’s not a tax  Develop alternatives w Demand side w Supply side w Enabling technologies

46 CALIFORNIA ENERGY COMMISSION Next Steps: Demand Side Management  Develop incentives for negawatts, conservation  expand Title 24 for commercial buildings  Integration of building design with PV  Understand new economy needs, i.e. data centers  Net metering/real time pricing systems  Incentives for load shifting technologies  Another way of dealing with “NIMBY”

47 CALIFORNIA ENERGY COMMISSION Next Steps: Production  Develop and display distributed generation technologies  Launch new paradigm shifting programs w create a new market  Look to integrated systems in the future w merge transportation/electricity  Don’t give up on a particular resource  Support and develop storage and conversion technologies as part of systems approach

48 CALIFORNIA ENERGY COMMISSION Next Steps: Enabling and Supporting System  Transmission Systems w new materials and technology w O&M responsibilities  Interconnection needs to be standardized  Better understanding of interdependencies relationships  Be prepared to deal with unanticipated events/regulations  Improve information availability w capacity w generation w market concentration w outage causes

49 CALIFORNIA ENERGY COMMISSION U.S. 1997 Carbon Emissions - 1500 Tcf

50 CALIFORNIA ENERGY COMMISSION Carbon Management: An Approach for Integrated Energy Systems Management Carbon Management Efficiency - operational - DSM - end use Decarbonization - “clean energy” Sequestration

51 CALIFORNIA ENERGY COMMISSION Carbon Management and California: An Appropriate Paradigm for State R&D Program Environment Economy Reliability Couple state and external issues Long-term solutions couple to current events Integration with external R&D provides flexibility

52 CALIFORNIA ENERGY COMMISSION We will Couple the California Context with Precepts of Carbon Management  End-use efficiency and demand-side technologies w buildings and appliance technologies w manufacturing, agriculture, water efficiency w storage and conversion technologies  Clean technologies w renewables and small-scale fossil w generation and control technologies that enhance environment w power conditioning w new technologies with collateral benefits  Enabling technology improvement and development w development of sensors, models, systems for real-time pricing w models, sensors, monitoring systems to improve T&D system operation and integration of DG w science base and model improvements to evaluate impacts of energy systems w development of new integrated systems and economic models to improve understanding of deregulated market structure

53 CALIFORNIA ENERGY COMMISSION Carbon Management: An Umbrella for Global, National, State and Local Concerns Global - Climate Change - Resource Consumption Nation - Security - Environment - Economy State -Economy - Environment - Reliability Local - End use - NIMBY

Download ppt "CALIFORNIA ENERGY COMMISSION National Heat Transfer Meeting AICHE & ASME Terry Surles California Energy Commission Technology Systems Division June 13,"

Similar presentations

Ads by Google