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Washington State Energy Past / Present / Future

Tim StearnsSenior Energy Policy SpecialistWashington State Department of CommerceTim.Stearns@Commerce.WA.gov

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people

cost

secure

sustainable

pollution

portability

reliability

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Energy

EnvironmentEconomy

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“…Americans generally won't acknowledge conflicts and make choices. The cry is for low prices, ample supplies, absolute reliability, clean air, no disfiguring construction projects, local autonomy and national accountability. Great. Unfortunately, there are tensions among all these goals.”

Paul Samuelson, Washington Post, August 20, 2003

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Washington State’s Energy Profile

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Washington’s emerging challenges

• State grows 130,000 people per year• 1.3 million per decade – double < 50 yr • 273 to house, feed, employ, transport, educate…• 300 new megawatts per year• Can we double system in 50 years?• No new dams sites – 15,000 miles lines• New subdivision – apartment• Car culture – walkable communities?

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Expenditures on Fossil Fuels Washington State: 1999-2008

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

-

2

4

6

8

10

12

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1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Bill

ion

s o

f do

llars

per

yea

r

Year

Fossil fuels, constant 2008 dollarsFossil fuel expenditures as % GSP

Excludes fuel taxes, refinery and pipeline costs and profits Sources: EIA, BEA and Sightline

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• Today• 11 million people• Largest hydrosystem • Fossil fuel

transportation• imported• Car based• Plenty of inefficiency• Centralized generation

• Future• 20 + million• Integrated system• Clean fuel

• Locally produced• Transit and vehicles• Zero energy buildings• distributed

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Energy is a Big Part of “Green” Jobs

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people

heat

light

cooking

manufacturing

transportation

information

The Science of Climate Change is Very Strong

“Most of the observed increase in global average temperatures

since the mid-20th century is very likely due to theobserved increase in anthropogenic GHG concentrations.”

Source: Intergovernmental Panel on Climate Change, 2007 Synthesis Report

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Electricity Consump-tion, 18.9

19.9%

Residential, Com-mercial & Industrial,

19.4 20.5 %Transportation, 44.5

46.9%

Fossil Fuel, 0.9 0.9%

Industrial Processes, 3.3

3.5 %

Waste Management 2.4 2.5 %

Agriculture, 5.4 5.7%

WA Greenhouse Gas Emissions (2005)

Total = 94.8 million metric tons CO2-equivalent

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State Targets - Reduce Emissions Grow Our Economy

By 2020 reduce GHG emissions to 1990 levels

By 2035 reduce emissions to 25% below 1990 levels

By 2050 reduce emissions to 50% below 1990 levels

By 2020 increase the number of clean energy sector jobs to 25,000 from the 8,400 jobs in 2004

By 2020 reduce expenditures by 20% on fuel imported into the state

Efficiency

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“Six Americas”—six groups or “publics”beliefs, attitudes, risk perceptions, motivations, values,

policy preferences, behaviors and barriers to action

1. Alarmed—16 percent of Americans—are eager to get on with solutions

2. Concerned—29 percent—know climate change is happening, human caused and serious, but they don’t necessarily see the urgency. 3. Cautious—25 percent—happening natural or human-caused.

4. Disengaged—8 percent—have heard of global warming but don’t know

5. Doubtful—13 percent—don’t think it’s happening, or natural.

6. Dismissive—8 percent—convinced not happening, hoax or a plot.

Listen - values - motivations common ground.

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Energy efficiency always should be America’s highest-

priority energy resource.Cheapclean

reliablesecure

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Energy Consumption per Dollar of Gross State Product (1990-2003)

0.8

0.9

1.0

1.1

1.2

1.3

1.4

1.5

1.6

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Ind

ex, 2

000

=1

SIC DefinitionsNIACS Definitions

Source: EIA SEDS, US BEA, CEA

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Energy Consumption Per Capita (1970-2003)

0

50

100

150

200

250

300

350

1970 1975 1980 1985 1990 1995 2000

Mill

ion

Btu

per

Ca

pit

a

WAUSWA - resid

Source: EIA SEDS, WA OFM

Conservation is Cost-effective Under Many Different Future Scenarios

$0-$100 Carbon

Current Pol-icy

No Climate Policy

No RPS Retire Coal $100 Carbon

$20 Carbon $0-$50 Carbon

Dam Ro-

moval

0

1000

2000

3000

4000

5000

6000

7000

Av

era

ge

Me

ga

wa

tts

Source: NW Power and Conservation Council - Draft 6th Plan26

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Renewable Energy

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Washington’s First Renewable “Revolution”

• Much of WA Post WWII Economy Tied to Inexpensive Renewable Electricity – Aluminum Industry– Defense Industry– Forest Products, Chemical– Rural Electrification

CA: 33% by 2020

Renewable Portfolio Standards

State renewable portfolio standard

State renewable portfolio goal

www.dsireusa.org / October 2009

Solar water heating eligible *† Extra credit for solar or customer-sited renewables

Includes non-renewable alternative resources

WA: 15% by 2020*

☼ NV: 25% by 2025*

☼ AZ: 15% by 2025

☼ NM: 20% by 2020 (IOUs)

10% by 2020 (co-ops)

HI: 40% by 2030

☼ Minimum solar or customer-sited requirement

TX: 5,880 MW by 2015

UT: 20% by 2025*

☼ CO: 20% by 2020 (IOUs)

10% by 2020 (co-ops & large munis)*

MT: 15% by 2015

ND: 10% by 2015

SD: 10% by 2015

IA: 105 MW

MN: 25% by 2025(Xcel: 30% by 2020)

☼ MO: 15% by 2021

WI: Varies by utility;

10% by 2015 goal

MI: 10% + 1,100 MW by 2015*

☼ OH: 25% by 2025†

ME: 30% by 2000New RE: 10% by 2017

☼ NH: 23.8% by 2025☼ MA: 15% by

2020+ 1% annual increase(Class I Renewables)RI: 16% by 2020

CT: 23% by 2020

☼ NY: 24% by 2013

☼ NJ: 22.5% by 2021

☼ PA: 18% by 2020†

☼ MD: 20% by 2022☼ DE: 20% by 2019*☼ DC: 20% by 2020

VA: 15% by 2025*

☼ NC: 12.5% by 2021 (IOUs)

10% by 2018 (co-ops & munis)

VT: (1) RE meets any increase in retail sales by

2012; (2) 20% RE & CHP by 2017

29 states &

DC have an RPS

6 states have goals

KS: 20% by 2020

☼ OR: 25% by 2025 (large utilities)*

5% - 10% by 2025 (smaller utilities)

☼ IL: 25% by 2025

WV: 25% by 2025*†

We’re Number 4!

Source : American Wind Energy Assoc. (12.31.09) 30

Resource Costs: Long Term

Conserv

atio

n

Heat R

ecove

ry

Landfil

l Gas

Geo

ther

mal

Win

d (MT L

ocal)

New H

ydro

Combin

ed C

ycle

Animal

Was

te

Win

d (OR/W

A)

MT W

ind >

WA/O

R via

CTS

Ultras

upercr

itica

l Coal

(ID)

Win

d (ID)

Advance

d Nucl

ear

MT W

ind >

S. I

D

IGCC (I

D)

Woody

Resid

ue

WW

TP Bio

gas

AB Win

d > O

R/WA

MT W

ind >

OR/W

A

IGCC (C

SS) via

CTS

NV CSP >

S. I

D

NV CSP >

OR/W

A

Utility

-sca

le P

V (S. I

D)0

50

100

150

200

250Emissions

Transmission & Losses

Integration

Plant Cost

Le

ve

lize

d L

ife

-cy

cle

Co

st

($2

00

6/M

Wh

r)

Source: NW Power and Conservation Council – Draft 6th Plan 31

Initiative 937 – Energy Independence Act

• Sets the Policy Framework for Utility Development of Renewable Electricity

• 3% of Total Load by 2009• 9% by 2012• 15% by 2020 • State’s large electric utilities must develop

conservation plans to acquire all cost effective conservation

• First plan must be completed by Jan. 1, 2010 and set targets for 2010-2012 biennium

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Bioenergy Development

• Biodiesel Facilities• Anaerobic Digesters• Research on Alternative Feedstocks• Bioenergy • Biomass CHP

Not in My Backyard ! !

• I

Gregoire approves wind-power project

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Lies, Damn Lies & Statistics

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"In preparing for battle, I have always found that plans are useless, but

planning is indispensable."

–General Dwight D. Eisenhower 41

A successful state energy strategy

balance goals to:• Maintain competitive energy prices• Increase competitiveness • Meet the state's enivronmental goals• Be sustainable

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1. Policy

2. Mandates - create markets

3. Tax incentives

4. regulation

5. Leverage partnersa. Private sector

b. Federal government

Framework for success - alignment

Clean Energy Leadership Council • Advisory group of clean energy industry leaders• Charged – How does the state build its clean energy

industry?• Four major opportunity areas

– Smart Grid– Energy Efficiency– “Green” building and the built environment– Sustainable biomass, biofuels, Bioproducts

• Major study by Navigant Consulting – Fall ‘10

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Align Core Mission Grow and improve

jobs in Washington

Align Policies and Execution Policy and Innovation

Unit within Commerce “Sector Lead”

Major State Energy Programs (ARRA)• Low-Income Weatherization $59 million• State Energy Program (SEP)$60 million

– $38.5 million for Loan and Grant– $14. 5 neighborhood Energy Efficiency– $5 million credit enhancement for energy efficiency– $500k for farm efficiency tools

• State and Local Energy Efficiency and Conservation Block Grants $56 million – Most directly to large local government and tribes– $6.4 million to small cities and counties– Transportation planning grants– Resource Conservation Manager grants

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Major State Energy Programs (ARRA) • State and Local Block EE Block Grant

Competitive– $390 million to 8 to 20 district energy efficiency

projects– 5 to 1 leverage– Large cities, counties, tribes, state– Residential and commercial sector energy efficiency – Also $ 63 million to small cities/counties for energy

efficiency

• Appliance Rebate Program $6.2 million • Energy Assurance $810,000• Utility Commission Assistance $900,000 47

What’s on the Horizon?

1. Will natural gas have a new (old) role?

2. Have high gasoline prices (and the recession) permanently altered demand?

4. When will be have a price on carbon? Can we massively increase investment in efficiency?

5. What are the next big technological breakthroughs? – Electric vehicles– Next generation biofuels– Inexpensive photovoltaics– Zero energy buildings

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- $ Savings

- New services

- Reliability

- Security

- Efficiency

- Environment

- Safety

Smart Energy

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Key Trends/Observations - Energy

• Building Energy Efficiency– Largely driven by building codes and appliance standards– Moving toward more efficient building with generation included– Best building practices integrate envelope, hvac, lighting and occupants– Efficiency activity driven by utility rebates, programs and public investment

• Transportation Electrification– Washington State is involved in one of the largest demonstration of electric

vehicles, charging infrastructure, energy storage (batteries) – Key challenge will be integrating with the existing electric system– Creating opportunities in Software, Composites, Smart Grid

• Wind Energy– State is working with companies to capture more of the wind value chain – spare

parts, operations, maintenance and training– East central, Southeast and the Gorge continue to draw development. – Diverse partners coming together for the world’s largest wind tradeshow. – Manufacturers attempting to apply excess capacity to this new sector

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• Smart Grid– Region involved in the largest smart grid demonstration project– Grid investments will be key to integrating renewable energy

• Biofuels / bioeconomy – Significant aviation biofuel project to fulfill 15% of Seatac’s

usage– Public fleets expanding use; nearing 20% on-road use in

western WA

• State Energy /Strategy / Clean Energy Leadership Council– Analyzing all fuels and sectors– Retain hydro power advantage – clean & cost-effective– Innovate new technologies and approaches– Build on the region’s strength

Reinvent fire

• Produce• Transmit• Use

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Contact

Tim Stearns

Senior Energy Policy Specialist

Washington State Department of Commerce

Tim.Stearns@Commerce.WA.gov

206-256-6121

www.commerce.wa.gov/energy

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