1 • Subtitle
New SV Clean Energy
PowerPoint Template
Hanford Hybrid Plant
Emissions Mitigation
Guidelines
May 8, 2024
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PRESENTATION
2 Objective
• Seek Board of Directors adoption of the Hanford Hybrid Plant Emissions Mitigation Guidelines
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3 Background
On April 26, 2024 the
Executive Committee
discussed a proposal
for the emissions
mitigation guidelines
and provided input
and recommendations.
• In April of 2023, the Board adopted Resolution No.
2023-06 approving a 12-year power purchase
agreement with Middle River Power for energy and
reliability products from its Hanford Hybrid Natural Gas Power Plant and Battery Energy Storage System
• The resolution requires staff to develop a policy and/or guidelines to set aside funds to be used for programs
and/or projects to help mitigate emissions associated
with energy produced by the Hanford Hybrid Plant
• SVCE is proactive about ensuring its portfolio
management activities leave a net positive impact on
communities
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4 More on the Hanford Hybrid Plant’s Location
• Hanford is located Kings County,
which is in the San Joaquin Valley
• The population in 2021 was 58,470
• Hanford’s median household
income for a family of 4 is $43,200
• Hanford has been designated a
disadvantaged community as
defined by the 2022 version of
CalEPA’s CalEnviroScreen 4.0
Source for population and income data: U.S. Census Bureau and the City of Hanford’s website: https://www.ci.hanford.ca.us/.
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5 About the Hanford Hybrid Plant
• The Hanford Hybrid Plant is a hybrid natural gas peaker power plant and battery energy storage system that SVCE contracted with for twelve years to ensure that SVCE can meet its Resource Adequacy (RA) program obligations.
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Emissions Reduction
Battery
Storage
131.4 MWs/131.4 MWhs
Will shift energy to when
it is needed once per day
Colocated: Will economically
displace peaker energy
with grid charged energy
Peaking
Gas Unit Reliability
—•99.4 MWs
Primarily run for
grid reliability
Quicker startup - can
* generate within
10 minutes of being idle
6 About the Hanford Hybrid Plant’s Emissions
• Due to tight RA supply conditions, the Hanford plant is likely to have run through the end of the decade whether or not SVCE contracted for the unit
• The Hanford Hybrid Plant agreement is 12 years in duration, with the battery energy storage system and the natural gas peaker both starting October 1, 2024
• Projected energy dispatch expected to result in ~5,000 MT of CO2/year at start of contract period; the CPUC’s electric sector GHG emissions target for 2030 is 25,000,000 MT of CO2
• SVCE’s hybridization of the plant (i.e., addition of a battery energy storage system) is expected to decrease the utilization rate of the gas portion of the plant because the battery system will displace the peaker, likely resulting in yearly emissions decreasing over time
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Hanford Capacity Factor
7 Hanford Hybrid Plant Emissions Mitigation
Guidelines Goals
1 -
Fund existing programs to help
reduce emissions from
greenhouse gases through
electrification activities in
disadvantaged or low-income
communities in Kings County.
2 -
Recommend a funding
amount range that could make
a meaningful impact and is
substantial enough to spend
resources on.
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8 The Guidelines
Key Elements
1 Establish the Hanford Hybrid Plant Emissions Mitigation Fund (“Hanford Fund”) 2 Specify that the Hanford Fund will be used to fund existing local programs to help reduce emissions from greenhouse gases through electrification activities in disadvantaged or low-income communities in Kings County
3 Recommend a one-time funding allocation of $750,000 to $1.8 million– for the entire duration of the Hanford contract (12 years)
• This represents 0.6% - 1.5% of SVCE’s total Programs Budget Allocation 4 Specify that the Hanford Fund will be used to pay for activities led by organizations working in Kings County 5 Require the collection of feedback be used to determine best course of action for utilizing Hanford Hybrid Plant Emissions Mitigation funds as well as the final funding amount 6 Require SVCE staff to evaluate the effectiveness of fund disbursements and report on progress to the Board in the Board Information Packet on an annual basis following the first disbursement and until the entire Hanford Fund has been disbursed, if necessary
7 All funds in the Hanford Fund must be disbursed by June 1, 2036 Item 3
PRESENTATION
9 More on Stakeholder Input
• Stakeholder engagement process will allow
us to receive feedback directly from Kings
County community members
• Understand types of emission reduction programs
that would be most beneficial to Kings County
residents.
• What are the community’s priorities?
• Guidelines require collected feedback be
used to determine best course of action for
utilizing Hanford Hybrid Plant Emissions
Mitigation funds
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10 Conclusion
• The adoption of the Hanford Hybrid Plant Emissions
Mitigation Guidelines will enable staff to meet the Board’s directive to develop a policy and/or guidelines to set aside funds to be used for programs and/or projects to help
mitigate emissions associated with energy produced by the Hanford Hybrid Plant.
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11 Recommendation
Adopt Resolution No. 2024-09 approving the Hanford Hybrid Plant Emissions Mitigation Guidelines, which provides for the following:
• Specifies the types of programs and projects that will be funded to help to mitigate the emissions associated with energy produced by the Hanford Hybrid Natural Gas Power Plant and Battery Energy Storage System during the 12-year term of the power purchase agreement;
• Establishes a fund of no less than $750,000 to no more than $1.8 million; • Authorizes the Chief Executive Officer to disburse the funds; and • Requires staff to report back to the SVCE Board of Directors on the effectiveness of the fund one year after the first disbursement and on an annual basis thereafter, if necessary.
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1 • Subtitle
New SV Clean Energy
PowerPoint Template
Authorize the CEO to
Execute Agreement with
CLEAResult
Board of Directors
May 8, 2024
Item 4
PRESENTATION
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SILICON VALLEY
2 Today's action – approve agreement with
CLEAResult
Key elements of the Program
• Decarbonization training and workshops
• Site assessments, project analyses and
prioritization
• Customer Incentives
• Impact tracking and reporting
Key elements of contract
• Not-to-exceed amount of
~$2.5M
• 3 ½ year contract
• Pay-for-performance
SVCE C&I Decarbonization Program
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PRESENTATION
3 SVCE C&I Decarbonization Program Budget
Customer Incentives
• $2,370,981 over contract term
• Grounded in $/MTCO2 avoidance
• Incentive design to-be developed
prior to June program launch
• Will consider variable rates to
support innovation, project cost
considerations, etc.
• Will leverage external funding
wherever possible
Implementation contract and customer incentives
Category Rate
Total not to exceed
per category
Percentage of
Budget
Start-up
Milestone Fee $30,000 $30,000 1%
Monthly Fixed
Fee
$1,000/participant
/month $600,000 24%
Performance
Fee $230 per MTCO2e $1,859,087 75%
Total Budget $2,489,087 100%
CLEAResult Contract
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PRESENTATION
4 Target Market – Large customers, annual
usage >10 million kWh and 250,000 therms
Commercial
25%
Industrial
15%
Agriculture
2% Utilities
9%
Residential
49%
2020 Natural Gas Usage by Sector
Top 20 C&I accounts
• 43% of total C&I gas usage
• 18% of SVCE gas usage
C&I accounts
• 40% of total gas usage
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5 New Program area for SVCE
Recap: SVCE Portfolio of Programs
Residential
Vehicles
Commercial
Vehicles
Gas in
Residential
Buildings
Gas in Non-Residential
Buildings
Cross-Cutting
(e.g. load
flexibility)
Affordability
Awareness
Ease Workforce
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6 Engaging C&I customers
*
Learn about customers’ priorities
• Start problem-solving by listening
• C&I customers are unique – so are the solutions
It’s not just the equipment, it’s the energy
service
Traditional program
• What are the specs on the end-use load?
What if we asked
• What is being pumped?
• Is it heated? Where is the heat coming?
• Is it running more often than it needs to be?
C&I Customers tend to have unique operations, energy use and sustainability goals Item 4
PRESENTATION
7 Building on Strategic Energy Management (SEM)
Incorporating a carbon focus into a successful program model *
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Goal Setting Workshops Treasure Hunts
Document customers
targets for energy
reduction, cost
savings, and
environmental impact
Educational modules
on energy
management, peak
load shifting, and
electrification
Site visits to assess
current building
operations, energy
usage, operational
practices, and identify
opportunities
No/Low-cost
O&M Projects
Implement low/no
cost behavioral,
retro-commissioning, and
operation measures
I
Y
Ongoing Technical Support
and Coaching
Capital Projects
Implement custom
capital EE upgrade
projects and
electrification
8 Electrification vs efficiency vs conservation
Focus on emissions avoidance, not on how it happens
*
DOE’s Four Pillars of Industrial Decarbonization
• Energy Efficiency
• Strategic energy management approaches to optimize
performance of industrial processes at the system-level • Electrification
• Electrification of process heat using induction, radiative heating, or advanced heat pumps.
• Electrification of high-temperature range processes
• Replacing thermally-driven processes with electrochemical ones • Low carbon fuels and feedstock
• Carbon capture, utilization and storage
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•
U.S. DEPARTMENT OF
ENERGY
Industrial
Decarbonization
Roadmap
DOE/EE-2635
September 2022
9 Building trust and collaboration with
customers
C&I Customers
• Have aggressive ESG and carbon goals, need
support in achieving them
• Seeking unbiased support and coaching
• Incentives
*
SVCE
• Opportunity to build SVCE brand as a trusted partner
• Opens the door to deeper collaboration
• GreenPrime, custom products
• Demand Flexibility
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PRESENTATION
INTUITIVE
Environmental,
Social, and Governance
Report 2023
OAPPLIED V^lll MATERIALS-make possible
SCIENCE
BASED
TARGETS
DRIVING AMBITIOUS CORPORATE CLIMATE ACTION
Meet Science-Based Targets
Achieve Scope 1, 2 and 3 emissions reduction
targets validated by SBTi.
LOCKHEED MARTIN
2022 SUSTAINABILITY PERFORMANCE REPORT
PROPELLED
BY
PRINCIPLE Logistics
10 Timeline and next steps
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October 2023 February 2024 #
May 2024 June 2024
SVCE launches C&l
Decarbonization Pilot
Solicitation released
for scaled program
BOD authorizes
CEO to execute
contract
Expanded Program
launch
11 Authorize the Chief Executive Officer (CEO) to execute the agreement with CLEAResult with non-substantive changes
approved by the CEO and subject to final review and approval by General Counsel, from the date of contract execution through December 31, 2027 and for an amount not to exceed
$2,489,087.
Recommendation
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12 • Subtitle
New SV Clean Energy
PowerPoint Template
Appendix
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SILICON VALLEY
13 Why is this program model successful?
Foster a culture of energy and carbon management
*
Program model provides structure for action
Participation
• 2 year cycle with customers
• Set goals, rank opportunities, take action, track progress, celebrate wins
Get in front of potential barriers
• Who makes decisions, based on what criteria?
• What is included in the budget? What team oversees the budget? ROI or payback thresholds?
Customer centric, start to finish
• Customers rarely need to be “sold” on their actions
• Projects are the actions that they identified as logical, feasible, within budget
Building an Energy or Carbon Team
Executive Sponsor
• Sets clear expectations
• Provides direction/resources
• Communicates/rewards wins
Carbon Champion
• Regular meetings with coach
• Gathers and shares data
• Coordinates among other team members
• Updates executive management
Carbon Team Members
• Interface w/their departments
• Subject matter experts
• Identify, prioritize and implement projects
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14 CLEAResult’s Decarbonization and SEM
Experience
Decarbonization
• 8,800 metric tons CO2e
• 9,700,000 kWh
• 1,100,000 therms
• 252,000 chilled watersavings(ton-hrs/yr)
• 11,399 oil savings(gal/yr.)
SEM
• 201,046 tons CO2e
• 250,492,172 kWh
• 5,705,845 therms
Total Combined
• 209,846 tons CO2e
• 260,191,172 kWh
• 6,805,845 therms
Current
North America / California
82 / 16
470 / 91
1965
1.6+
93+
1.7+
Since 2009
2023 Impacts
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eIhI
Organizations engaged
Million tons GHG saved
Million therms saved
Billion kWh saved
Wf
WmW
Specialized team members
Active organizations
15 The measure mix for decarbonization
What might projects look like?
*
Behavioral, retro-commissioning, operational
Process heating / boiler plant
• De-scale boiler tubes to improve heat transfer through the boiler.
• Improve feedwater management to optimize boiler feedwater chemistry.
• Repair steam leaks. Set this up as a recurring maintenance activity.
• Improve boiler sequencing, particularly summer operation. A boiler that cycles off and on at low load suffers an additional 20-30% efficiency reduction versus its typical low fire performance. Minimize the amount of boiler capacity left on hot standby.
• Reduce steam pressure to minimum needed (and/or
temperature).
Capital Projects
Cost-intensive retrofits, or new equipment
• Waste heat recovery
• Low Global Warming Potential (GWP) Refrigerants
• Refrigeration system retrofits or full system
replacement
• Space Heating
• Heat pumps
• Electric boilers
• Water heating
• Heat pump water heaters (temp constrained)
• Industrial/Process
• Electric ovens, furnaces
• Methane capture
*supplemental grant funding may be important
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16 9
Engineering calculations from
completed projects that align with
IPMVP
Customer Journey
A personalized approach to training, educating, and implementing projects Item 4
PRESENTATION
Individualized Kick-off
Meetings
Introductions and program expectations
Educational Modules
Peer-to-peer learning on GHG
management topics
On-site Treasure Hunt
Identify opportunities and populate
opportunity register
Monthly Customized Support
Goal development, employee
engagement, energy map creation, data
collection, persistence strategies, and
updates to key activities
Savings Calculations Carbon Accounting
Identify and quantify Scope 1, 2 & 3
emissions for each organization to track
reduction in GHG emissions
Technical support
Identify, scope, and implement projects
FK Reporting
Customer -ESG ready GHG reports
17 C&I decarb engagement is a continuous
cycle
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Collaborative
Group Education
Modules
Ensure executive
sponsorship and
identify champion
Develop register
of future projects
Recruit
program
participants
Identify,
prioritize
and track
projects
Evaluate,
report,
educate &
celebrate
success
Train champion
and team site-t
site and in groups
Strategic
planning
with SVCE
Engineering
calculations
to measure
and report
savings
Conduct
facility
Treasure
Hunt
Make
continuous
improvements
One-On-One
Coaching
Technical/
Engineering
Services
18 Recap: SVCE portfolio of programs
This program is focused large C&I customers
Residential
Vehicles
Commercial
Vehicles
Gas in
Residential
Buildings
Gas in Non-Residential
Buildings
Cross-Cutting
(e.g. load
flexibility)
Affordability
Awareness Ease
Workforce
Product Availability
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PRESENTATION