Panel
Energy: Powering the Green Economy
Milken InstituteLindsay, Dennis Areola, Andrew McAllister, Nahar Patel, Nancy Fund, Daryl Steinberg, Daryl Obert
- California aims to reduce greenhouse gas emissions to 1990 levels by 2020 and targets 80% below 1990 levels (approximately 85% below current levels) by 2030 and 2050 through structural energy economy changes.
- New residential construction is mandated to be zero net energy by 2020, with non-residential construction following the same standard by 2030, requiring aggressive energy efficiency and self-generation.
- The state plans to achieve approximately 85% below today's emission levels by 2050, with the world expected to look to California to replicate how these audacious zero net energy goals are achieved in existing buildings.
- Toyota will sell its first global hydrogen fuel cell car next year, starting in California before expanding to other U.S. states, while a partnership with Air Liquide aims to aggressively increase the number of hydrogen fueling stations in California by the end of 2015.
- Goals include deploying one million electric vehicles by 2020, rising to 1.5 million by 2025, and electrifying heavy-duty sectors where alternative fuels currently fail, though heavy-duty electrification is not expected in the short term.
- Natural gas is projected to play a significant role in reducing emissions within the heavy-duty transportation sector where other fuels face market limitations, alongside renewable natural gas and power-to-gas projects using excess renewable power.
- Electrification of the transportation sector will drive significant electric demand growth, necessitating major investments in distributed, storage-rich systems to utilize excess solar and wind energy.
- Utility rate structures are expected to shift toward performance-based rate making and fixed charges, with the federal Investment Tax Credit predicted to drop from 30% to 10% by 2020, altering the net-metering landscape.
- The Gigafactory is anticipated to expand battery storage beyond transportation, while the California Solar Initiative, net metering, and RPS are expected to allow high-pollution and low-income neighborhoods to benefit from declining solar costs.
- Regional planning paradigms are shifting due to SB 375, though funding remains insufficient to subsidize necessary infrastructure investments despite the law's broad regional adoption.
- The clean tech economy aims to create quality jobs, with the Tesla factory in Fremont employing over 6,000 people and workforce development programs recently placing 40% of jobs with African American workers and 22% with Latino/Hispanic workers.
- A $500 million investment over the last two years established a career pathways trust fund to prepare young people starting at ages 14, 15, and 16, addressing the need to replace 50% of Chevron Energy Solutions' 8,300 employees eligible for retirement over the next five to seven years.
- State government intends to set standards and provide investment streams, with 60% of cap-and-trade funding directed toward public infrastructure and 40% toward private innovation, before allowing market forces to drive solutions.
- Non-extreme smog attainment areas are limited to the South Coast Air Quality Management District and the San Joaquin Valley, the only two in the United States, presenting specific challenges for emission reductions.
- Long-term plans involve smart city infrastructure and vehicle-to-vehicle communication to reduce pollution and congestion, potentially requiring expansions similar to BART or DART by 2025 or beyond.
- Heat pump technology for water heaters and heating is currently available off-the-shelf and is expected to meet long-term goals through electrification with a virtually carbon-free grid.
- Policy direction will be set by the state, but market and consumers are expected to drive affordable and innovative solutions, including potential community solar models and feed-in tariffs.
- International education models, such as apprenticeships for 16-year-olds in Switzerland or Germany, are proposed to help migrate toward a benchmark set by these countries for technical workforce development.
- System-wide building benchmarking is proposed to provide marketplace information for low-cost acquisition and sales models for energy upgrades, ensuring affordability through market competition.
- Future household energy usage may involve a portfolio of solutions including renewable natural gas and power-to-gas, as the market decides between electricity and natural gas for applications like cooking.
- The grid is envisioned to eventually function as an insurance product, requiring users to pay a premium for access to ensure costs are shared equally among all participants.
- By 2050, electric demand will rise significantly under a business-as-usual scenario due to demographics and growth, unless carbon reduction goals are met.
- California expects to work with Germany, Japan, and other nations over the next 100 years to drive the economy toward a more green model.
- Commercializing alternative-fueled vehicles is expected to occur by aggregating specific segments like buses, enabled by the expansion of battery storage capabilities.