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Renewably Into the Future:

By John Benson

June 2020

1. Introduction This paper was started and mostly finished with a good theme: goals that various government entities have defined for progressing to net-zero greenhouse gases (GHG), and thus mitigating climate change.

However, it occurred to me, as I was completing this, another benefit arises from efforts to achieve net-zero that is much more important in the short term. Two of the methods used will quickly boost employment with little additional government spending: (1) deploying renewable electric generation, and (2) building as many EVs as possible thus using that renewable electricity to eliminate the GHG coming out of all non-electric vehicles as we drive them. The former (especially wind and solar) are the least expensive forms of generation currently, so it’s easy to get projects financed with backing by long-term power purchase agreements. The latter are very popular and are profitably ramping up production (thanks, Elon). Both require many employees.

1.1. Original Introduction In its decision on the adoption of the Paris Agreement, the Conference of Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC) at its 21st Session in Paris, France (30 November to 11 December 2015), invited the IPCC (Intergovernmental Panel on Climate Change) to provide a special report in 2018 on the impacts of global warming of 1.5 °C above pre-industrial levels and related global greenhouse gas emission pathways. The IPCC released a report (referenced at the end of this paragraph) in in response to this invitation. This report used climate modeling to estimate the result of various actions by the world to mitigate climate change. One of the main conclusions was that achieving carbon neutrality by 2045 may limit global warming to 1.5°C, which may, in turn, limit the worst damage resulting from this warming.1

Shortly after this report was released (October 2018) I released a review, linked below.

https://www.energycentral.com/c/cp/ipcc-special-report

This post is not about the above report, but the 2045 (and similar) goals.

1.2. CARB Information The California Air Resources Board (CARB) has had a disproportionate influence on Californians since the 1960s, and this increased in 2006 when it assumed responsibility for our Cap and Trade Program. Like most other state agencies, CARB understands the importance of keeping all stake-holders affected by their regulations on-board with their actions. Thus when I’m looking for some information on one of their programs, I look for a good CARB presentation. A few weeks ago when looking for another presentation, I

1 IPCC, “Special Report, Global Warming of 1.5 ºC”, Oct 6, 2018, https://www.ipcc.ch/sr15/

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found the one referenced here.2 This presentation forms the backbone of Sections 2 and 4 of this posting.

This paper is about the steps that California, other U.S. States and selected other countries have planned to achieve or approach carbon neutrality by 2045.

2. California Achieving carbon neutrality (a.k.a. greenhouse gas net-zero) by 2045 will require a combination of reduction in greenhouse gas sources and developing greenhouse gas sinks (a.k.a. negative emissions technologies). The figure below depicts this approach.

Most major greenhouse gas emissions are caused by burning fossil-fuels. These sources include mobility (mainly autos, trucks, air-transport and ships), electric generation, manufacturing (mainly iron, steel and cement), and other activities.

Sinks include forest expansion (reforestation and afforestation), wetland expansion, optimized agricultural practices, carbon capture and sequestration and others.

2.1. Reducing Industrial Greenhouse Gas Emissions The State of California is working on the following initiatives to reduce greenhouse gas (GHG) emissions in various industries:

Process changes for reduced GHG and efficiency gains in existing processes

New sources of process heat (electric boilers and solar-thermal)

Renewable fuels and feedstocks (biomass, biomethane, green hydrogen3)

Carbon capture, sequestration and options for utilization of carbon dioxide and other GHG

The figure below shows the development stage for many of the above technologies and policy initiatives to reduce GHG. Note that I believe that CCUS is carbon capture and underground storage (or sequestration).

2 CARB, “Meeting California's Carbon Neutrality Goals: Approaches for the Industrial Sector”, Feb 20,

2020, https://ww3.arb.ca.gov/cc/scopingplan/meetings/022020/carb_cn_industry_feb2020.pdf 3 Generally green hydrogen is hydrogen produced by electrolysis using zero GHG electricity.

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2.2. Electric Generation Although the current fleet of California electric generators are largely “clean”, consisting of over 90% very low GHG generation and natural gas fired combined cycle plants, the natural gas plants emit large quantities of GHG. The state gives strong priorities to renewable generation operation but there are limitations to the amount the grid can stably support. There are also other constraints on the operation due to weather for wind and solar, stream-flow requirements and limitations for hydro, and head-loss caused by long run-times at high output for geothermal. The addition of long-term storage to mitigate variability and the increasing price of natural gas via cap and trade will result in a steady increase of the percentage of our energy coming from very low GHG sources.

2.3. Mobility The primary strategy for substantially reducing GHG in all mobility applications is currently electrification, and this will be a really heavy lift. We are not even taking baby-steps for air transport and nautical applications. I posted two papers, one on each of these two segments, and links to each of these are below.

https://www.energycentral.com/c/ec/flying-cathodes-and-anodes-everywhere

https://www.energycentral.com/c/ec/floating-anodes-and-cathodes

The one area where we are taking baby steps is for highway light-vehicles. There are roughly 30 million highway vehicles in California. As of mid-2019, there were 600,000 light zero-emission vehicles (ZEV) on the road in California.4 Future goals include:5

By 2023, California expects 1 million ZEVs to be on California roads.

By 2025, California expects 1.5 million ZEVs to be on California roads.

By 2030, California has a target of 5 million ZEVs.

By 2050, California plans to achieve a 100 percent ZEV sales rate.

4 CARB, “Draft: Assessment of Carb’s Zero-Emission Vehicle Programs per Senate Bill 498”, Chap. 2,

Dec 17, 2019, https://ww2.arb.ca.gov/sites/default/files/2019-12/SB%20498%20Report%20Draft%20121719.pdf 5 CARB, Appendix B: Carb’s Zero-Emission Vehicle Programs, Pgs. B8 & B51, Dec 2019, https://ww2.arb.ca.gov/sites/default/files/2019-12/SB%20498%20Appendix%20B%20-

%20ZEV%20Programs%20120719.pdf

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Although these seem to be reasonable goals, Even if the 2050 goal is met, by 2045, there will still be many gasoline- and diesel-fueled vehicles on the road, leaving two choices: (1) offset their GHG emissions via negative emissions technologies, or (2) reformulate these vehicle’s fuel to be near 100% renewable. It is likely a combination of these two will be needed.

2.4. Facilities Note that this includes residences, small commercial facilities, and large commercial facilities. These all use energy in much the same way. Environmental, electronic and miscellaneous applications dominate energy use in these facilities. The major GHG-source is space-heating. For commercial applications this is both minimal and easily converted to heat pump technology in most locations. In the short-term and in locations where heat-pumps and not economical, biomethane can be used.

For residential, it’s a much larger issue, mainly because there are many times the number of residences vs. commercial facilities. Most of these use natural gas for heating (space and water). The good news is that there are multiple mitigation methods:

Heat pumps

Biomethane

Thermal efficiency improvements

Using all of the above we should be able to achieve carbon-neutrality by 2045.

2.5. Major Manufacturing GHG Sources In the U.S. there are two products whose manufacture emit more GHG than any other by a wide margin: iron and steel production and cement production. There is not much iron and steel production in California and, to my knowledge, none of these facilities use the process that is the major producer of GHG (the integrated steel mill). The paper linked below was posted almost 2 years ago, and covers this industry.

https://www.energycentral.com/c/cp/i-smoke-and-lightning-heavy-metal-thunder

There is no cement production in California that I am aware of, but we do use copious amounts of concrete, which may help to offset the GHG emitted in producing cement. Read the post from about a year and a half ago for details.

https://www.energycentral.com/c/cp/concrete-greenhouse

3. Other States Committing to Carbon Neutrality On June 4, 2018 Hawaii became the first state to commit to carbon neutrality by 2045 (California was second). Governor David Ige signed three bills on that date:6

HB 2182 sets the above goal and established a Greenhouse Gas Sequestration Task Force.

HB 1986 created a framework for a carbon offset program that allows for carbon credits through global carbon sequestration protocols. Practically speaking, the measure will address carbon sequestration through forest restoration.

6 Robert Walton, Utility Dive, “Hawaii first state to enact 100% carbon neutral goal”, June 5, 2018,

https://www.utilitydive.com/news/hawaii-aims-for-carbon-neutrality-by-2045/525028/

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HB 2106 required a sea level rise analysis in environmental impact statements before projects can go ahead.

On April 12, 2020 Virginia’s Governor Ralph Northam authorized the omnibus Virginia Clean Economy Act, which mandates that the state’s biggest utility, Dominion Energy, switch to renewable energy by 2045. Appalachian Power, which serves far southwest Virginia, must go carbon-free by 2050.7

Connecticut passed a bill in 2018 to reduce GHG emissions to 35% below 2001 levels by 2030. Connecticut’s Gov. Ned Lamont also signed an executive order on September 3, 2019 directing state regulators to lay out a plan to reach 100% carbon-free electricity by 2040.8

Maryland has a 40% GHG reduction goal by 2030 and net-zero by 2045.

The following information regarding East Coast States is from an article referenced here:9

New Jersey: The Garden State set a goal last year to reduce (GHG) emissions 80% from 2006 levels by 2050. To get there, New Jersey will tackle carbon emissions across the electricity, transportation, and buildings sectors, which together composed more than 90% of its 2018 total emissions…

In 2019, New York State passed its groundbreaking Climate Leadership and Community Protection Act, which requires the state to reach net-zero emissions by 2050 and requires 100% carbon-free electricity by 2040…

Massachusetts: The Bay State’s legislature is considering a trio of climate bills that would vault it ahead of most states after already adopting a clean peak standard for its power sector this year, which requires a certain portion of the peak electricity load to come from clean resources. And Governor Charlie Baker has led the charge to garner regional support from other governors on the Transportation and Climate Initiative (TCI), which is aiming to cut transportation fuel emissions by covering the sector in a cap-and-trade program.

The first bill strengthens the state’s current GHG target of 80% by 2050 to net zero emissions by 2050, with five-year emissions interim targets. The second bill would create EV rebates and convert bus fleets to electric, whereby all bus sales must be electric by 2030. The third bill increases energy efficiency standards for a variety of products. The state has long been a leader in energy efficiency, ranking first among all U.S. states, but the updates boost energy performance requirements for EV charging infrastructure as well as other appliances and building components.

7 Gregory S. Schneider, The Washington Post, “Virginia becomes the first Southern state with a goal of

carbon-free energy”, April 13, https://www.washingtonpost.com/climate-solutions/virginia-becomes-the-

first-southern-state-with-a-goal-of-carbon-free-energy/2020/04/13/4ef22dd6-7db5-11ea-8013-

1b6da0e4a2b7_story.html 8 Catherine Morehouse, Utility Dive, “Connecticut governor calls for 100% carbon-free power by 2040”,

Sep 5, 2019, https://www.utilitydive.com/news/connecticut-governor-calls-for-100-carbon-free-power-by-

2040/562283/ 9 Amanda Myers, Forbes, “Lead, Follow, Or Get Out Of The Way: East Coast States And Cities Accelerate

On Decarbonization Pathway”, Mar 31, 2020, https://www.forbes.com/sites/energyinnovation/2020/03/31/lead-

follow-or-get-out-of-the-way-east-coast-states-mirror-california-decarbonization-pathway/#78d03f19516c

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Vermont: State lawmakers have put forward competing climate bills− a Green New Deal bill that would tax the state’s wealthiest to fund climate initiatives and the Global Warming Solutions Act, which would codify the state’s greenhouse gas targets—which currently include reducing emissions 80% to 95% from 1990 levels by 2050—into law. As of now, the Global Warming Solutions Act seems to have more steam.

Washington State’s legislature has set a target to reduce emissions at least 25 percent below 1990 levels by 2035, and the Department of Ecology has recommended a more ambitious target of 40 percent below 1990 levels by 2035.

Oregon’s HB 3543 also set specific, science-based climate emissions reduction goals:

Arrest the growth of emissions by 2010 (achieved)

Achieve climate emissions levels that are 10 percent below 1990 levels by 2020 (not on track)

Achieve climate emissions levels that are at least 75 percent below 1990 levels by 2050 (not on track)

Colorado Governor Jared Polis last year signed legislation that put the state on the path to achieve economy-wide GHG emissions reductions of 26% by 2025, 50% by 2030 and 90% by 2050, as compared to 2005 levels. Polis also issued his own roadmap, outlining Colorado's path to 100% renewable electricity by 2040.

Illinois has implemented policies that advance the goals of the Paris Agreement, aiming to reduce greenhouse gas emissions by at least 26-28 percent below 2005 levels by 2025. Illinois is currently on track to meet this goal. As reported by the U.S. Energy Information Administration, Illinois CO2 emissions from all sectors declined from a high of 242.0 million metric tons of CO2 in 2005 to 204.1 million metric tons of CO2 in 2016 (the most recently reported year) a 16.7 percent decrease.

Minnesota: In 2007, then-Gov. Tim Pawlenty signed a bill that required energy companies to provide 25 percent of power from renewable sources by 2025. In this same year Minnesota set goals for GHG: It is the goal of the state to reduce statewide greenhouse gas emissions across all sectors producing those emissions to a level at least 15 percent below 2005 levels by 2015, to a level at least 30 percent below 2005 levels by 2025, and to a level at least 80 percent below 2005 levels by 2050.10

Per the source here,11 More than a decade later, Minnesota is well on track with its renewable energy goals, but it's not meeting its goals to reduce greenhouse gas emissions overall … Minnesota has managed to reduce its greenhouse gas emissions since 2005, but the state missed a 2015 goal.

10 Minnesota Pollution Control Agency, “Greenhouse gas emissions in Minnesota: 1990-2016”,

https://www.pca.state.mn.us/sites/default/files/lraq-2sy19.pdf 11 Nora G. Hertel, St. Cloud Times, “Where does Minnesota stand on its climate change goals?”, Jan 26,

2019, https://www.sctimes.com/story/news/2019/01/25/minnesota-climate-change-goals-energy-emissions-

greenhouse-gas-jessica-hellmann/2667883002/

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4. Selected Other Country’s GHG Reductions Note that most of the information below is from reference 2, and it focuses on the industrial sector.

4.1. European Union The EU has a three phase program. Each of the subsections below cover one of these phases describing programs and examples of projects.

4.1.1. Proof of Concept through Pilots

Horizon2020 (2014‐2020) is funded via a budget of €77 billion

€17 billion for advancing industry

Faster funding compared with prior programs

Interim evaluation

Horizon Europe (2021‐2027) has established program targets, which include:

Research and development

Proof of concept projects

The Heidelberg Cement plant was funded by this phase:

Oxy-fueled kiln with flue gas recirculation

€12 million from Horizon Europe

Created public/private working group for future low-carbon cement initiatives

4.1.2. Pilot through Demonstration Projects

NER300 (2013 to 2020) is funded by €2.1B from 2010‐2012 auction of 300 million EU ETS allowances.12

ITE projects limited to biofuel and CCS in certain sectors

No EU payment until project operational

Will create an Innovation Fund (2021 to 2030)

Auction ~425 million EU ETS allowances (~ €10B)

Earlier payment based on milestones, higher EU contribution rate

Project proponents can submit their applications for funding when there is an open call for proposals.

The Commission aims to launch the first call for proposals in 2020, followed by regular calls until 2030.

12 The EU ETS is the EU’s emission trading system. This is similar to California’s 'Cap and Trade' system,

but I believe the EU created their system first. A cap is set on the total amount of certain greenhouse gases

that can be emitted by installations covered by the system. The cap is reduced over time so that total

emissions fall. Within the cap, companies receive or buy emission allowances, which they can trade with

one another as needed. They can also buy limited amounts of international credits from emission-saving

projects around the world. The limit on the total number of allowances available ensures that they have a

value.

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The application procedure will be organized in two phases:

o In the first phase, the project proponent submits an expression of interest application

o If the project scores sufficiently the project, the proponent will be invited to submit a full application

The Fund will support up to 60% of the additional capital and operational costs mainly via grants.

The grants will be disbursed in a flexible way based on the needs of the market and of the project, taking into account the milestones achieved during the project’s lifetime.

Up to 40% of the grant can be given based on pre-defined milestones before the whole project is fully up and running.

This program funded the Vercelli Cellulosic Ethanol Plant: first‐of‐kind cellulosic ethanol production (€28M).

4.1.3. Scale-up and Roll-out

InvestEU:

Provides loan guarantee to high risk projects for low carbon-technologies

Stimulates private capital at lower interest rate

European Investment Bank (EIB) Financing:

Any mature technology

Subsidized loan rates

Programs funded: Äänekoski bio‐product mill

Converts wood to chemicals; electricity producer

€1.2 billion cost

€275 million EIB loan; €75 InvestEU loan guarantee

4.2. Canada Alberta and British Columbia collectively have several methods for funding GHG reduction projects.

4.2.1. Strategic Innovation Fund (2017 –Current)

Five streams of funding for large projects ($10‐50M (CAD) requested contribution)

Contribution is determined by review committee: non‐repayable grant, government loan, or both

$250M for the steel and aluminum sector for growth and expansion

Since 2017, 64 projects announced; $2B in funding; $43B total investment leveraged; 67k jobs created

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4.2.2. Emissions Reduction Alberta program (2009–Current)

Call‐for proposal based on targeted themes (Methane Challenge (2017) and Industry Efficiency Challenge (2019))

Funds and terms depend on opportunity

Two part application process: Expression of Interest and Full Project Proposal

To date: $565M (CAD) funding 165 projects

4.2.3. Clean BC Industry Fund (2020)

Reinvests a portion of carbon tax revenues to reduce covered industrial emissions.

4.2.4. Technoclimat (2019)

Eligible only to industry covered by Cap‐and‐Trade. Grants up to $3M, maximum 50% eligible expenses

4.2.5. Low Carbon Economy Challenge (2019)

A wide range of sectors are eligible.

Proposals evaluated on risk and feasibility, cumulative GHG reduced per federal

dollar invested; other co‐benefits

$20,000 – $250,000, up to 25% of the total eligible expenses