1. CALIFORNIA ENERGY COMMISSION E-Vision 2002: Shaping our Future by Reducing Energy Intensity in the U.S. Economy Rapporteur: Electric Power Terry Surles California Energy Commission Arlington, Virginia May 16, 2002

2. CALIFORNIA ENERGY COMMISSION Issues  Complex system with lack of systems perspective  Energy is only, intermittently, a big deal  “Rube Goldberg” approach to energy policy  Market is unable to address all societally or politically acceptable externalities  New technologies do not address Joe Bagadonitz needs

3. CALIFORNIA ENERGY COMMISSION Externalities (Attributes)  Environmental benefits: Resource development, emissions, GHG  Systems benefits: Transmission congestion, infrastructure interdependencies  Reduction of defense and security costs  Cost savings: Life cycle perspective, resource availability

4. CALIFORNIA ENERGY COMMISSION CAL ISO Daily Peak Loads January 1, 2000 - December 31, 2000

5. CALIFORNIA ENERGY COMMISSION Technologies Are Out There  Proven feasibility, but up front costs a problem  They work, but do they give the user a warm, cozy feeling (tech wonks vs. Joe B)  Must make improvements to take advantage of overall systems benefits w Enabling “smart” technologies w Beneficial tech linkages (EE with DER) w Address grid impact issues

6. CALIFORNIA ENERGY COMMISSION What We Can Recommend  Public/Private partnerships are critical w Public good must be met w Somebody’s got to make some money  Market readiness critical to success w Tale of the solar water heaters w “Best” is the enemy of “good enough”  Education  Develop approaches to long-term solution dealing with systems in transition

7. CALIFORNIA ENERGY COMMISSION Role of Government  Purchasing  R&D through the “valley of death”  Make use of “bully pulpit” and policy tools w Take advantage of beneficial externalities w Sensibly address competing interests  Aggressive standard setting w Uniform approach for interoperability w Expand on Energy Star and NEMA labels

8. CALIFORNIA ENERGY COMMISSION PIER Program (RD&D) Renewable Energy Program Export Program Technology Development Continuum From Innovation to Market Self Sustaining Market International Market Proof of Concept Technology Development Demonstrations Valley of Death Certification New Energy Idea

9. CALIFORNIA ENERGY COMMISSION Summer 2001 Peak Demand Reductions

10. CALIFORNIA ENERGY COMMISSION California and United States Electricity per Capita Trends Since 1976

11. CALIFORNIA ENERGY COMMISSION Technology Paths to the Future  Public/Private partnerships a must  Develop technologies based on life-cycle and systems perspective  Maintain a diverse portfolio - the Lone Ranger doesn’t live here  Incorporate exogenous technologies to improve transparency and lower costs  Resolve central station /DG issues

12. CALIFORNIA ENERGY COMMISSION Our R&D Program Must Address Future Market Scenarios Regulated De-regulated De-centralizedCentralized Status Quo New energy systems Same players Supermarket of Choices Same energy systems New players

13. CALIFORNIA ENERGY COMMISSION To Push Forward, Government  Must take the lead in framing the debate  Must provide sustained leadership w Requires a bipartisan approach  Can rely on earlier models w Race to the moon w More recent NNSA model

14. CALIFORNIA ENERGY COMMISSION Driving to a Sustainable Future: The “E”s are Linked  Environment  Energy  Economics  Education