A Greenhouse Gas Mitigation Guide for Electric Utilities Bren School of Environmental Science and Management 02 November 2004

The Client Burbank Water & Power (BWP) is proud of being an energy efficiency and conservation pioneer in the utility sector. BWP seeks new ways to incorporate environmental stewardship into its role of power and water provider for the City of Burbank. Anticipation of possible greenhouse gas legislation also prompts BWP to plan for the future.

The Global Carbon Cycle Anthropogenic activities are significantly increasing the concentration of GHGs in the atmosphere through: Fossil Fuel Combustion Land-use change Wastes

US CO 2 Emissions -From electricity and heat generation In 2002, CO 2 emissions totaled 5.6 Gt. Total GHG emissions were 6.9 Gt. This amounts to about 25% of the global total. The US is 2 nd in emissions per capita following Australia.

GHG Policy & Regulation Mandated by treaty Effective when 55% of emitters have ratified the protocol Tradable credits are gained from emissions reductions, and efficiency projects INTERNATIONAL (KYOTO) NATIONAL (1605(b)) REGIONAL (SB 1771) Voluntary, includes Reporting of Greenhouse Gases and Climate Challenge program Carbon tax and CAFÉ standards not widely accepted McCain-Lieberman Act – modeled after Kyoto Mandated and voluntary CA establishes comprehensive Climate Action Registry CA adopted first GHG legislation, AB-1493, for 2009 automobiles

The Problem Utilities want to act in an environmentally responsible, economically feasible and politically strategic manner by mitigating their greenhouse gas emissions. Information is not readily available on the steps involved or the resources available to help them make an informed choice. Utilities need direction regarding the GHG emission mitigation options that are best suited to their needs.

Decision-Making Process: ( An overview) Decision to mitigate Selection of a strategy Temporal factors Decision-making criteria Preferences Contract consultants Economic considerations Baseline emissions Mitigation options Available technology Environmental impacts Regulatory considerations Logistics Key questions

The Solution A Greenhouse Gas Mitigation Guide for Electric Utilities Purpose: - Guide utilities through the decision making process. - Help them make better-informed mitigation choices. Includes: –Background (Scientific & Policy) –Tasks for the utility –Key questions to ask –Resources to use along the way

I.Introduction II.Background - Policy and Science context - Definitions III. List and description of mitigation options IV. Assessing existing emissions and offset V. How to screen the options: Developing a subset of mitigation strategies from the pool of options. VI. How to assess and compare the mitigation strategies. Parts of the Guide:

VII. Project steps (description & case study) Example: Reforestation Steps 1. Site/species selection. 2. Site preparation. 3. Seed supply & labor. 4. … VIII. Resource list (a) Turnkey facilitators/contractors (b) Step-specific facilitators/contractors 1. Planning 2. Monitoring 3. Verification Resources

III. Mitigation Options Afforestation / Reforestation Industrial process modifications Bio-mass to energy and bio-diesel Agricultural sequestration Renewable energy transitions Bio-mass to product Geological formation injection Ocean injection Mineral carbonation Efficiency increases (Buildings, transportation, construction) Methane capture (Landfill, wastewater treatment, agriculture) Ocean seeding SEQUESTRATIONREDUCTIONCAPTURE AND USE

V. How to screen the options (a close-up look) Elimination Criteria: (a)Expected timeframe for implementation > 5 yrs. Mineral Carbonation; Ocean Injection (b) High level of uncertainty in terms of efficacy and potential negative ramifications. Ocean Seeding; Ocean Injection (c) Explicitly unacceptable in existing treaties and regulations. Ocean Injection

VI. How to assess and compare the options Economic considerations –Short-term capital and startup costs –Projected operational costs –Potential revenue sources –Capitalizing on existing relationships Environmental considerations –Additionality/Baseline –Leakage –Ancillary benefits/losses Perception of the strategy –Preferences of the utility –Cost vs. benefits to stakeholders –Public opinion of the strategy

VI. How to assess and compare the options Methodological considerations –Full-cycle accounting of net GHGs of a project –Quantification, monitoring and verification –Implementation timeframe –Longevity –Permanence –Is the strategy adaptive (flexible)?

Policy considerations –How is the strategy regarded within a regulatory climate? Recognized, modified, or mandated? –Will reduction credits be valued the same? –How will policy shape decisions on the other considerations? Economic, temporal, environmental, and perception VI. How to assess and compare the options

–Cost-effectiveness analysis (cost per ton of CO 2 ) –Return On Investment (ROI) –Full cycle accounting –Analytical Hierarchy Process (AHP) –Key questions Tools

Conclusions A guidance document is needed by electric utilities to assist in the planning and implementation of GHG mitigation projects and must address the following: –Explanations of the various mitigation options, pros and cons –Direction on how to approach a mitigation project –Guidance on how one would select a specific mitigation option –Types of information and contracting resources available –Company-specific information that is needed to add to the process

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