1. Building Washington’s New Energy Economy Washington Economic Development Association Summer Conference Lake Chelan, June 4-5, 2009 David Kaplan Clean Energy Systems Advisor State of Washington, Dept of Commerce

2. Outline Thinking about our energy future – Setting goals – Forecasting the energy mix – a thought experiment – Some observations Evolving Clean Energy ARRA (Stimulus) Funding Opportunities Local Considerations 2

3. Setting Goals Exceed our “per capita responsibility” for: – Reducing CO 2 emissions – Reducing oil imports Grow clean technology business sector Maintain competitive energy prices 3

4. Forecasting Washington’s Energy Mix 4 Non-grid Energy Grid Energy Conservation (Energy Savings) Grid Energy Non-grid Energy

5. Take-aways Observations – WA CO 2 is almost all non-grid – Carbon-free grid sources (hydro, nuclear) unlikely to expand Recommendations (preliminary) – Displace fuels with grid wherever possible – EVs are key – Expand conservation to reduce demand – Expand renewables (wind, solar, geothermal, wave/tidal) to increase supply – Expand storage to offset intermittent renewables – Expand bio-fuels (trucking, marine, aviation) to offset non- displaceable fuel use 5

6. Take-aways (cont.) PNW grid and institutions (BPA, NW Council, IOUs, publics) have served us well, but need to ask even more of them in coming years Need to build analytical and deployment assets of similar caliber targeted at total energy sector (not just grid) Unless we can squeeze more from our hydro system (unlikely) or want to build new nukes (unwise), need to realistically assess how to massively scale conservation, wind and solar PV, by when. In transportation sector, need to realistically assess what it will take to massively scale EV deployments, by when. 6

7. Evolving Clean Energy Whole system approach to energy – Evolve tomorrow’s grid from today’s – Displace CO 2 -intensive fuels with clean electricity Wind (now) and solar PV (coming years) are best bets for massive clean energy scale-up – Major barriers are first cost and balancing While not the major problem, grid must be core of the solution 7

8. Today’s Grid – Limitations Consumers lack information Utilities lack mechanisms to influence consumer behavior Limited clean power Limited energy storage 8 Essential elements of a smart grid Deep energy efficiency Demand mgmt Grid intelligence Clean power Electric vehicles Energy storage

9. Deep Energy Efficiency Cost-effective first steps Building envelopes High energy-use loads (HVAC, etc.) 9

10. 10 Demand-Side Management Communications (wireless, BPL, etc.) “Instrument” curtailable loads (A/C, W/H) Smart meters (AMI) Aggregation intelligence (software)

11. 11 Grid Intelligence Monitoring and control SCADA integration Synchro-phasors (PMUs) Automated substations

12. 12 Clean Power Carbon-free Utility-scale: wind, PV All-scale: PV Intermittent – requires “firming”

13. 13 Electric Vehicles Reduce oil consumption “Instrument” EVs, charge points Smart charging required Complement intermittent clean power

14. 14 Energy Storage Grid shock absorber Firm intermittent power (wind, PV) EVs are partial storage-equivalent Essential elements of a smart grid Deep energy efficiency Demand mgmt Grid intelligence Clean power Electric vehicles Energy storage

15. Funding Sources Smart Grid Demos & Deployment 15 OpportunityAmountStatus Smart Grid Demonstrations DE-FOA-036$0.6BComments due May 6 FOA expected late May PNW Smart Grid Test Bed BPA RFI (aimed at DE- FOA-036 funding) $0.1BSeeking utility partners Comments due May 18 Smart Grid Investment Grant DE-FOA-058A$3.4BNotice of Intent issued FOA planned June 17 BPA Borrowing Authority ARRA – Div A, Title IV, Sec 401 $3.2BAuthorized

16. Funding Sources Electric Vehicles & Charging Infrastructure 16 OpportunityAmountStatus Transportation Electrification DE-FOA-028$0.4BProposals due May 13 Battery / Component Mfg DE-FOA-026$2.0BProposals due May 19 Clean CitiesDE-PS26$0.3BProposals due May 29 Some EV/infrastructure $

17. Scope of Smart Grid & EV Funding Opportunities Smart Grid – “… Smart grid modernization encompasses the electric transmission and distribution infrastructure that interconnects large generation at one end and consumers’ electric loads as the other end, as well as all components and systems in between, including distributed energy resources.” Transportation Electrification (EVs and Charging) – “… Accelerate the development and production of various electric drive vehicle systems to substantially reduce petroleum consumption.” – Support the President’s goal to Get One Million Plug-In Hybrid Cars (PHEVs) on the Road by 2015. Who can participate? – Utilities, system operators, power marketers – Vehicle mfrs, charging equipment mfrs, other technology suppliers – National labs may only subcontract 17

18. Goals of Smart Grid &EV Funding Opportunities Public benefits DOE is aiming for: – Jobs, jobs, jobs – Reduced emissions – Reduced oil consumption – Enhanced cost-effectiveness – Improved demand-side management – Renewable and distributed energy resources – Improved reliability 18

19. PNW Smart Grid Opportunity Goals – Lead the nation in developing a clean, robust grid – Grow smart grid technology companies in Washington state Bonneville Power Administration – Smart Grid Test Bed RFI – Broad participation by utilities and technology companies Opportunity: Integrate all smart grid pieces – DSM, wind, storage, EVs, etc. – Open standards and protocols – Regulatory mechanisms (tariffs, rate recovery, etc.) Migrate quickly from demo to deployment 19

20. Local Considerations Energy Efficiency Community Block Grants (EECBG) – Cities under 35,000, counties under 200,000 via CTED Siting for clean renewables – Wind, Solar, Geothermal, Ocean (wave, tidal) – Transmission build-outs Clean tech startups Communicate, coordinate – CTED Recovery Act info – http://www.cted.wa.gov/site/1164/default.aspx http://www.cted.wa.gov/site/1164/default.aspx 20