Two new state policies are very likely to be enacted in the next few years, according to a senior California energy regulator: a statewide zero-emission vehicle mandate and a ban on natural gas usage in new buildings.
California is meeting its power-sector emissions goals ahead of schedule, but the transportation sector is a bigger nut to crack, California Public Utilities Commission member Clifford Rechtschaffen said during an online webinar held June 23 by the Berkeley University Center for Law, Energy and the Environment.
Despite the likely ban on gas in new buildings, Rechtschaffen said the state's existing natural gas power plant fleet will be needed for decades to come, as it is a cheap way to meet reliability demands created by increased intermittent renewables like wind and solar.
"I think in the electricity sector we are doing very well," Rechtschaffen said, noting that emissions reductions are exceeding those required under the state's renewables portfolio standard, but that transportation emissions have been increasing over the past several years.
"We're going to be fine, relatively speaking, in the power sector," he said.
Decarbonizing buildings is going to be a huge challenge, Rechtschaffen said. About 12 percent of state emissions come from heating load for the building sector, and "we have made little progress here," he said, noting the state has 12 million existing buildings where gas appliances are used. Regulations could take the form of incentives or a mandate, he said.
Rechtschaffen said that while he is not calling for any new natural gas plants to be built, the state will have to maintain the existing infrastructure of tens of thousands of megawatts of gas capacity, as well as pipelines, to maintain reliability. Many existing gas plants were built in the 2005-2010 time frame and have 30-year life cycles, he said, adding that he is concerned that, due to disaggregation, the costs of maintaining the new infrastructure could be borne by fewer and fewer ratepayers, some of whom could be lower-income people who can't afford to electrify.
There are costs associated with switching over gas-fired appliances, which typically have longer life cycles than gasoline-powered vehicles. The natural turnover for gas-fired appliances is 10 to 15 years for water heaters and 20 years for space heaters, so replacing them will take a lot of money and subsidies. One possibility is a "cash for clunkers"-type program that would allow people to upgrade sooner rather than later.
On power-generation technology, hydrogen is definitely on the table but needs more investment from big players, and there is no road map in California for green hydrogen and renewable gas for utilities.
"We're thinking more about it . . . but it's a gap right now in our suite of policies," Rechtschaffen said.
Natural gas bans have been enacted in at least 18 California cities, and municipal governments in Washington, Colorado and Massachusetts are working on building-electrification ordinances to move away from natural gas use (see CEM No. 1567).
Pacific Gas & Electric in a June 24 letter to the California Energy Commission said it "fully expects to meet the needs that all-electric buildings will require." The utility said it continuously forecasts load in its service territory and implements upgrades to the distribution grid to meet the demand.
"PG&E welcomes the opportunity to avoid investments in new gas assets that might later prove underutilized as local governments and the state work together to realize long-term decarbonization objectives," the letter from PG&E Vice President Robert Kenney says. "With all this in mind, PG&E supports state and local government policies that promote all-electric new construction when it is feasible and cost-effective."
Mandatory building performance standards can include requiring existing buildings to meet performance benchmarks such as energy or carbon intensity, with building owners given multiple years to come into compliance, according to a report issued this month by the American Council for an Energy-Efficient Economy. Such policies are in place for high-energy-use commercial and industrial buildings in Tokyo; rental buildings in Boulder, Colorado, and the United Kingdom; and offices in the Netherlands. Commercial building policies have also been adopted in Reno, Nevada; New York City; Washington, D.C.; Washington state; and St. Louis, Missouri.
Buildings account for about 39 percent of energy usage in the U.S. and 31 percent of U.S. greenhouse gas emissions, according to the ACEEE report. The GHG proportion is lower because nonenergy GHG emissions come disproportionately from other sectors, including agriculture, industry and transportation.
But the report notes it would take centuries to retrofit all existing homes, apartments and buildings in the U.S., illustrating the breadth of the challenge at hand.