1 • Subtitle
New SV Clean Energy
PowerPoint Template
Monthly Reach Code
Update
Zoe Elizabeth
February 2023
Item 4
PRESENTATION
2 1. Recap 2023 reach code initiative results
2. Introduce next steps
Objective
Item 4
PRESENTATION
rA, s1L1coN VALLEY ~ CLEAN ENERGY
3 13/13 jurisdictions adopted a reach code.
Indicates strong
Improvement in reach
Code requirements
Compared to last cycle.
Item 4
PRESENTATION
2022 SVCE Reach Codes
t
Jurisdiction
Campbell
Cupertino
Gilroy
Los Altos
Los Altos Hills
Los Gatos
Milpitas
Monte Sereno
Morgan Hill
Mountain View
Santa Clara County Unincoporated
Saratoga
Sunnyvale
rA, s1L1coN VALLEY ~ CLEAN ENERGY
All Electric
All Electric
t
Increased minimum EVCI requirements t
Mostly Electric
Mostly Electric
All Electric
All Electric
Mostly Electric
All Electric
All Electric
All Electric
Mostly Electric
All Electric
t
t
t
4 Eight jurisdictions adopted an all -electric
code. Eleven jurisdictions adopted an EV code.
Item 4
PRESENTATION
Jurisdiction
Campbell
Cupertino
Gilroy
Los Altos
Los Altos Hills
Los Gatos
Milpitas
Monte Sereno
Morgan Hill
Mountain View
Santa Clara County Unincoporated
Saratoga
Sunnyvale
rA, s1L1coN VALLEY ~ CLEAN ENERGY
0 ■ AU Electric
■ Mostly Electric
■ Increased minimum EVCI requirements
■ Expanded PV
1 2 3 4
Count of Policies
5 2022 Count of Reach Code Policies
Item 4
PRESENTATION
rA, s1L1coN VALLEY ~ CLEAN ENERGY
Mostly Electric
(4)
6 • Thanks to you, the future will be healthier, safer, and more resilient. • All cities are eligible to receive the $10K grant to support the staff effort. • Every building official/staff lead will also receive a certificate of appreciation.
We look forward to continuing to work with you, your staff, and your community members to upgrade to clean, modern, electric buildings and transportation! Congratulations!!!
Item 4
PRESENTATION
rA, s1L1coN VALLEY ~ CLEAN ENERGY
7 We are here to support you, your staff, and your community in the transition to clean and healthy all-electric buildings.
Winter 2023
• SVCE compiling data and resources on the challenges and opportunities to electrify buildings.
• SVCE staff conducting stakeholder interviews with agency staff and other experts.
Spring 2023
• In-person workshops for electeds and for staff
• Launch $1.5M grant program to support local policy development and adoption
Next up...existing buildings
Item 4
PRESENTATION
rA, s1L1coN VALLEY ~ CLEAN ENERGY
8 Thank you! svcleanenergy.org
[email protected]
Item 4
PRESENTATION
9 New Construction Energy Code (Part 6)
• Electric heat pumps are prescribed for:
• Residential HVAC
• Nonresidential – most include one or both of water heating and HVAC, depending on building type
• Residential
• Performance credit for all-electric buildings
• Required higher ventilation rate for gas stoves
• Pre-wiring required for residential dwellings
• Energy storage readiness
• Nonresidential - Solar PV and Battery Storage required The 2022 State Code is Electric Preferred.
9 Item 4
PRESENTATION
10 Even small gas appliances require a large,
expensive distribution system.
A gas range is not just a gas range. It is the tailpipe of a complex system.
Source: The Gas Index, 2020
Item 4
PRESENTATION
Gas Supply Chain Leaks
t1 OAS
o WELLS
~ 0 t~
0 ~
OAS
PROCESSING
PLANT
OAS TRANSMISSION
PIPELINES
DISTRIBUTION RESIDENTIAL
PIPELINES USERS
11 Reach codes help your community prepare for
the electric future.
Any natural gas appliances installed today becomes a costly stranded assets .
Illustrative example:
Assume 3500 new housing units are built per year for the next three years with gas cooking and gas water heating. A future incentive program to replace these appliances would cost:
• $5.25M for cooktops ($500 incentive)
• $21M for water heaters ($2000 incentive)
Plus: Building all -electric today can be less expensive than building mixed fuel.
Item 4
PRESENTATION
12 Type How it works SVCE Members
Building
Electric
Preferred
Allows mixed-fuel buildings with high energy
performance. Electrification-ready panel and wiring
in mixed-fuel buildings.
2 – Milpitas, Monte Sereno
Mostly-Electric
Water and space heating must be electric,
exemptions for other appliances.Electrification-ready panel and wiring in mixed-fuel buildings. 4 – Campbell (res), Los Altos, Los Altos
Hills (res), Saratoga
All-Electric All appliances must be electric, with very limited exemptions.
5 – County of Santa Clara, Cupertino,
Los Gatos (res), Mountain View,
Sunnyvale
Gas Ban No gas hookup (via municipal ordinance). Limited exceptions. 1 – Morgan Hill
No Reach Meet state code minimum requirements. 1 – Gilroy Six jurisdictions have an all -electric code and six have a code with at least one exception.
12 Item 4
PRESENTATION
13 2022 Model Reach Codes – New Buildings
Code Approach Benefits Considerations
All-Electric Municipal
Ordinance
• Avoids CEC review and
approval
• Flexible (i.e., time-certain or
existing buildings policies can
be included)
• Avoids triennial cycle
• Must exceed future code updates to
stay relevant (i.e., most effective for all-electric with limited exceptions) CALGreen– All-Electric amendment
• Avoids CEC review and
approval
• Requires triennial update or more if
intervening cycle
Model code language for both approaches can be found at BayAreaReachCodes.org Item 4
PRESENTATION
14 In Summary
• Our 2022 model code is all-electric to help our communities to prepare for an all-electric future.
• Member jurisdictions can tailor the codes with exceptions as they deem appropriate.
• The model code includes both an energy code amendment and the municipal ordinance option.
Your efforts matter. We look forward to supporting you.
Item 4
PRESENTATION
15 Member Agency Reach Code Tasks and
Milestones
Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
LOI
Conduct Outreach
Effective
Vote
Potential CEC Submittals
Define Goals
Agendize
Engage Staff
Define Approach
Write Code Language
Council Info Sessions
Goals and Approach Defined
Reach Codes Agendized
City Manager LOI Signed
Staff Responsibilities Defined
Proposed Code language complete
Outreach conducted
Council informed
Final code language complete
Vote complete, same meeting as state
code adoption
Documentation done
Orange text
indicates a
Boardmember task
Click to add text
15 Item 4
PRESENTATION
Item 5
PRESENTATION
Added 2/9/23
Item 5
PRESENTATION
Added 2/9/23
California's transitioning grid presents many challenges and opportunities to meet reliability
1. California's Clean Goals and Reliability
2. Challenges
3. SVCE's Portfolio, Procurement and Progress Efforts
4. New Opportunities and Strategies
2 Item 5
PRESENTATION
Added 2/9/23
Item 5
PRESENTATION
Added 2/9/23
California has set aggressive green house gas reduction targets and mandates to achieve them. SVCE is on track to meet these goals!
The Integrated
Resource Plan
(IRP) process is
how we plan to
meet these
goals.
100% lean Ele tricity
by 2045
Renewable Portfolio
Standard (RPS) 60% by
2030
AB 32 - Greenhouse Gas Reduction
Targets for California 80% reduction
of 1990 levels by 2050
4 Item 5
PRESENTATION
Added 2/9/23
© California's Power Fleet in Transition
To achieve aggressive greenhouse gas reduction goals, California must transition from a fossil based fleet to a clean source of electricity generation. ~--Past ------Present-----~ Future
Primarily Natural Gas, Coal
Hydro and Nuclear
Natural Gas, Hydro,
Nuclear, Solar, Wind,
Geothermal and limited
Storage
Solar, Wind, Geothermal,
Hydro, Storage, Demand
Response, Off-shore Wind
& New Technologies. Less
natural gas and no nuclear.
80,000 MW of Capacity currently on-line.
5 Item 5
PRESENTATION
Added 2/9/23
© California's Power Fleet in Transition
Presently Natural Gas power plants provide about 75% of the flexible capacity for grid reliability.
California has retired or plans to
retire fossil fuel power plants. 8,000
MW of new Clean energy resources
contracted or built.
~--Past ---~---Present----- Future
California has issued several IRP Procurement Orders to ensure the state is on track to meet! 6
Item 5
PRESENTATION
Added 2/9/23
© California's Power Fleet in Transition
Three times the amount of Solar and Wind and eight times of Storage over current rates of development are needed to achieve 100% Clean electricity by 2045.
Off-shore wind, demand response,
longer-duration storage and hydrogen
resources will play a part.
• • ---------Present---~~ Future
Primarily Natural Gas, Coal
Hydro and Nuclear
Natural Gas, Hydro,
Nuclear, Solar, Wind,
Geothermal and limited
Storage
Solar, Wind, Geothermal,
Hydro, Storage, Demand
Response, Off-shore Wind
& New Technologies. Less
natural gas and no nuclear.
In total 180,000 MW of new clean capacity is needed by 2045! 7 •
•
•
•
Item 5
PRESENTATION
Added 2/9/23
Climate change, droughts, changes in load and resources have put a focus on how we will meet Reliability
The heatwave in September
2022, stressed the grid
Load peaked in
evening hours when
Renewables ramped down
Demand Response played a
critical role in avoiding rolling
blackouts
Back-up generators were
deployed
Source: 2022 Scoping Plan for Achieving
Carbon Neutrality
2.5,000
2.0,000
I 15,000
>
Q. §" 10,000
Ul
>
~ ru 5,000
C
w
0 -5,000
0 0
0 0 0 0 0 0
0 0 0 0 0
;..; i-J ~ ~ u-i
Re11ewables
- Imports
0 0 0 0
0 0 0 0
u::i " co cri
0 0 0 0
0 0 ~ 0
0 ;..; ~ ..... .-t ..... .-t
Fossil Gas
Batteries
0 0 0
0 0 0
~ u-i ..:0
,-,I ..... .-.I
0 0 0 0 0 0 0
0 0 0 0 0 ~ 0
r:-.:. cici cri 0 ,:..i ~ ..... .-t .-.I N N N
·- Large hydro
- Nuclear and Coal
Existing fossil gas generation continues to play a critical role in grid reliability on September 6, 2022
0 0
0 8
• Capacity is amount of electricity a Power Plant can
produce at maximum output measured in
megawatts (MW)
+
• Energy is the amount of electricity generated over
time measured in megawatt hours (MWh)
=
• Reliability is a measurement of how likely a resource is able to perform during certain periods of time
Item 5
PRESENTATION
Added 2/9/23
California energy agencies are charged with ensuring that there is sufficient energy and capacity available on the power grid to meet demands at all times 9 Item 5
PRESENTATION
Added 2/9/23
Variations from different technology types of generation throughout the day, making it difficult to plan for and meet energy demands.
1 -
s
~ 0.8
-!....
.8 0.6
u
nJ
LL
>0.4
....
u
nJ
c.. 0.2
nJ
u
0 1 MW Annual Average Hourly Profiles by Technology
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Hours
- Geothermal - Wind - Solar -Natural Gas - Solar+ Storage 10 Item 5
PRESENTATION
Added 2/9/23
Past and present grid relies on
Fossil/Natural Gas Resources 1 MW Annual Average Hourly Profiles by Technology 1 ~========================================================= - s
~ 0.8
-!a...
.S 0.6
u
ro
LL
>0.4
-1-'
·-u
ro o.0.2
ro
u
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Future grid will rely more on
Clean resources
Hours
- Geothermal - Wind - Solar -Natural Gas - Solar+ Storage Tl
•
•
•
•
•
•
•
Item 5
PRESENTATION
Added 2/9/23
Energy represents the amount of electricity generated over time 100% of Clean Energy goal
Renewable Portfolio Standard (RPS)
Carbon-free, non-RPS
Energy and Capacity can be bought together or unbundled Capacity-only resources, allow us to "rent" or claim the capacity for Reliability purposes
No Energy is associated with Capacity-only contracts
SVCE must procure Capacity contracts because renewable resources have little countable Capacity for Reliability
12 Item 5
PRESENTATION
Added 2/9/23
Item 5
PRESENTATION
Added 2/9/23
SVCE must procure electricity products to meet mandates and Board directives Goal or
Requirement
What We Buy
How We Buy It
,
Capacity
Resource Adequacy
Reliability Procurement
Mandates
Natural Gas, Solar, Geothermal, Wind,
Storage
PPAs (bundled energy & capacity)
Short-term RA capacity only, products
Item 5
PRESENTATION
Added 2/9/23
SVCE accounts for about 2.5% of the total CAISO Load
,_____A_n_n_u_a_l _E_n e_r_g_y_is_N 4_,_o_o_o_, 0_0_0_M_W_h _ ____.l ..__I __ P_e_a_k_D_e_m_a_n_d_is_N_8_2_5_M_W_s __ ____. 400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
Energy (MIWh per !Month)
Jan Feb Mlar Apr May Jun Jul Aug Sep Oct Nov Dec
900
800
700
600
500
400
300
200
100
0 SVCE Demand (MW per Month)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Reliability Capacity Requirements
Item 5
PRESENTATION
Added 2/9/23
SVCE provides 100% Clean Energy on an annual basis through RPS and Carbon-free, non-RPS resources.
120%
100%
80%
60%
40%
20%
0%
Increase in RPS to 65% in 2030
and 75% by 2045
SVCE's Clean Portfolio Annual Demand Target for RPS
and Carbon Free
2022 2045
■ RPS ■ Carbon Free
4,500
4,000
3,500
3,000
;;
~ 2,500
cii
a.
~ 2,000 (!)
1,500
1,000
500
0 On track to meet SVCE Agency RPS
policy
Long Term RPS Split by Technology Type
LOAD FORECAST
SVCE RPS Policy
2022 2023 2024 2025 2026 2027 2028 2029
Solar+ Storage Solar Geothermal Wind VAMO Short Term PCC1 2030
Item 5
PRESENTATION
Added 2/9/23
California has established a Resource Adequacy (RA) framework to ensure each load serving entity has sufficient Capacity to meet grid Reliability needs
1. California must ensure there is sufficient Capacity to meet Monthly Peak Demand
2. Plan for an adverse weather scenario
3. Meet a Peak Monthly Demand plus a buffer of 15% (Planning Reserve Margin)
4. All Resources are assigned reliability effectiveness factor
5. SVCE must comply with California's Resource Adequacy Program
Capacity
Resource Adequacy
Reliability Procurement
Mandates
Natural Gas, Solar, Geothermal, Wind,
Storage
PPAs (bundled energy & capacity)
Short-term RA capacity only, products
17 •
•
•
•
Item 5
PRESENTATION
Added 2/9/23
© Resource Adequacy Only Capacity Contracts
Buyer has the rights to Capacity under a contract that ensures a resource generates when needed
No Energy associated RA Capacity
These contracts serve to meet RA Program
requirements
RA-Only Capacity contracts primarily from natural
gas resources
Board has delegated authority to CEO to transact
these types of contracts with less than 5 year
terms
Capacity
Resource Adequacy
Reliability Procurement
Mandates
Natural Gas, Solar, Geothermal, Wind,
Storage
PPAs (bundled energy & capacity)
Short-term RA capacity only, products
18 Item 5
PRESENTATION
Added 2/9/23
Currently, SVCE buys mostly Capacity from Natural Gas Resources The planning reliability with renewables may change, requiring more capacity and storage resources SVCE's 2023 and 2030 RA Mix SVCE's Forecasted Peak Load (MW) 120% 900
100%
80% }33%
60%
800
700
48%
600
500
40%
400
20%
300
0% 200
2023 2030
■ Natural Gas RA Only (Est.} ■ Geothermal 100
Solar+ Storage ■ Wind 0
$ Procurement Orders (Est.} Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Meeting short-term (2023-2025) Resource Adequacy Capacity Requirements is becoming a challenge 19 Item 5
PRESENTATION
Added 2/9/23
SVCE has over 900 MWs of Capacity from renewables that qualifies for about 408 MWs of RA Capacity
Typically SVCE's RA Capacity
Requirement is 850 MWs
Additional 2000 to 2500 MW
Nameplate Capacity if Solar+
Storage resources
Typical lead time to build new
renewable resources is 3-5
years
1000
900
800
700
600
500
400
300
200
100
0 PPA Nameplate Capacity & RA Capacity (MW)
30% of Solar+
Storage Nameplate
Capacity counts
towards for RA
Nameplate Capacity (MW) RA Capacity Adjusted (MW)
■ Geothermal ■ Wind Solar+ Storage ■ Long Duration Storage ~ Planned Storage 20 Item 5
PRESENTATION
Added 2/9/23
•
•
•
•
•
•
Item 5
PRESENTATION
Added 2/9/23
How should we deploy resources to meet Reliability in a Clean and Affordable manner?
Term of resources
Ability to contract for
and/or develop in time
Capacity availability
Role of Natural Gas in
SVCE's portfolio
RA Program Compliance
New IRP Procurement
Orders
Reliability Procurement
Mandates
Hydro, Solar, Solar plus Storage,
Geothermal and Wind
Long-term Power Purchase
Agreements (PPA) and Short-term
Resources
Renewables
• Mostly Energy
Demand
Response
• Shift/modify Load
Carbon-free
Resources
• Mostly Energy
Storage
• Capacity to shift
Energy Resources
Natural Gas
Resources
• Mostly Capacity
Capacity
Resource Adequacy
Reliability Procurement
Mandates
Natural Gas, Solar, Geothermal, Wind,
Storage
PPAs (bundled energy & capacity)
Short-term RA capacity only, products
22 Item 5
PRESENTATION
Added 2/9/23
© How will we meet long-term Reliability?
A balance of technologies are to ensure we meet all portfolio objectives. To meet Reliability requirements, new strategies may be required. • Long-term Renewables Clean
Energy with RA Capacity
• Short-term (less than 5 years)
RA-only mostly from Natural
Gas
• Storage (paired with solar and
standalone 3-8 hour duration)
• Demand Response
New
Technologies/Opportunities
• Long-term RA-only (greater
than 5 years)
• Long-duration storage (non-Lithium Ion)
• Natural gas resources with RA
capacity and energy ("gas
toll")
• Hybridized with Natural Gas
Plant with battery storage
23 Item 5
PRESENTATION
Added 2/9/23
Alternative
1. Current - RPS PPAs,
standalone storage and
short-term RA-only
products.
2. Rapid Increase
Standalone Storage
3. Increase Long-term
RA-only capacity
4. Natural Gas Toll from
Peaker plant
5. Natural Gas Toll from
Peaker Plant w/BESS
Clean
Energy
+
◊
Meet
Reliability
+
+
Affordable
+
+
Feasibility/Challenges
Risk of not building or procuring sufficient
capacity in time to meet current RA and
Procurement Order requirements.
Short-term RA market is highly constrained and
expensive.
Significant Increase in Portfolio Costs. Not feasible
to build in the short term.
Availability of long-term RA capacity is susceptible
to shortages. Marketers preferred to sell Capacity
and Energy long-term
Emissions Costs
Emissions Costs
Ability Meet Goals/Requirements Relative to Current Most Likely Same Less Likely 24 Item 5
PRESENTATION
Added 2/9/23
The ability to meet Reliability will become more difficult and costly putting into question the ability to meet climate goals affordably
1. Retirement of natural gas power plants
2. Reliance on RA-only Capacity contracts
3. Effectiveness of renewables to meet Reliability
4. Availability of large hydro and out-of-state resources
5. Electrification and changing load patterns
6. Resource Adequacy Reform to more granular requirements
7. Ability to quickly and cost-effectively build Clean Energy and Capacity resources
1. Global supply and labor issues
2. Interconnection and transmission upgrade backlogs
25 Item 5
PRESENTATION
Added 2/9/23
1. Continue to procure clean energy resources with and without capacity to meet Clean goals, RPS requirements, RA requirements and IRP Procurement Order(s)
2. Explore the availability and pricing of long-term RA-only capacity products to stabilize cost and increase ability to meet compliance under current and future RA framework
3. Explore opportunities to procure BESS-hybridized Natural Gas Peaker to meet RA requirements and hedge a portion of load cost
4. Pursue demand response and distributed energy resources for reliability
5. Assess ability and pathway to meeting 24x7 Carbon-free in a cost-effective, sustainable and reliable manner 26 Item 5
PRESENTATION
Added 2/9/23