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Washington State Energy Past / Present / Future

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

Ocean energy?

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people

cost

secure

sustainable

pollution

portability

reliability

Ocean energy ?

• Growth• Need• Replace• Carbon• opportunity

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Current usage• 85% world use – fossil fuels –

oil/coal/natural gas• 8% nuclear • 7% renewable –

biomass/hydroelectric/wind• International Energy Agency – World

Energy Outlook – 2008 • 20% renewables by 2020• 80% carbon reduction by 2050

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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/bikable communities?• Transit additions

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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

ions

of d

olla

rs p

er y

ear

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

transportation• imported• Car based• Plenty of inefficiency• Centralized generation• Gas taxes – decline

since 1970’s

– Future• 20 + million• Integrated system• Clean fuel – biofuels -

electric• More Locally produced• Transit and vehicles• Zero energy buildings• Distributed• Move to tolls & mileage

charges

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Energy is a Big Part of “Greener” Jobs

• Green not end• Improve existing uses

– Efficiency– Integration– Manage– Cleaner inputs

• Home• Food• Transportation• Buildings• Processes

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Science of Climate Change is 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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people

heat

light

cooking

manufacturing

transportation

information

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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

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

policy preferences, behaviors and barriers to action1. 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 use ^ worldwide

• Developing countries

• 1.6 b no access• 20%• 1b unreliable• 1 b lack access

to safe water

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Energy efficiency

• America’s highest-priority energy resource – Cheap– Clean– Reliable– Secure* Dispersed* Cheaper new

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Key efficiency steps

• Building codes• Appliance standards• Integrated design –

hvac/light/processes/envelope• Better buildings – zero energy / living

buildings

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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

Inde

x, 2

000=

1

SIC DefinitionsNIACS Definitions

Source: EIA SEDS, US BEA, CEA

Region built a 4,000 megawatts of efficiency 1980-2010at an average cost of 2.2 cents – cheaper than wholesale

Additional 4,400 average megawatts are available in the Northwest now thru 2030!Growth is about 300 average megawatts per year

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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

Cap

ita

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

Aver

age

Meg

awat

ts

Source: NW Power and Conservation Council - Draft 6th Plan28

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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 standardState renewable portfolio goal

www.dsireusa.org / October 2009

Solar water heating eligible *† Extra credit for solar or customer-sited renewablesIncludes 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 RPS6 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)

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Texas was all caol / oil / gas / nuclear – price went down

Resource Costs: Long Term

Conserva

tion

Heat R

ecove

ry

Landfill

Gas

Geotherm

al

Wind (MT Loca

l)

New H

ydro

Combined C

ycle

Animal

Waste

Wind (OR/W

A)

MT Wind > W

A/OR vi

a CTS

Ultras

upercrit

ical C

oal (ID

)

Wind (ID)

Advance

d Nucle

ar

MT Wind > S. ID

IGCC (ID

)

Woody Res

idue

WWTP Biogas

AB Wind > O

R/WA

MT Wind > O

R/WA

IGCC (C

SS) via

CTS

NV CSP > S. ID

NV CSP > O

R/WA

Utility-

scale

PV (S. ID

)0

50

100

150

200

250EmissionsTransmission & LossesIntegrationPlant Cost

Leve

lized

Life

-cyc

le C

ost (

$200

6/M

Whr

)

Source: NW Power and Conservation Council – Draft 6th Plan 33

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

– Biopower– Bioproducts– biofuels

• Biomass CHP• Get Beyond waste – less in the landfill

Not in My Backyard ! !

• I

Gregoire approves wind-power project

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Banana - build absolutely nothing anywhere near anything or anyone

Lies, Damn Lies & Statistics

37Interconnected / competitive / changing world

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

planning is indispensable."–General Dwight D. Eisenhower 43

A successful state energy strategy

balance goals to:• Maintain competitive energy prices• Meet environmental goals• Be sustainable• Increase competitiveness

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1. Policy2. Mandates - create

markets3. Tax incentives4. regulation5. Leverage partners

a. Private sectorb. 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”

Ocean renewables• Up to 10% of the nation’s energy supply

– Hydrokinetic – wave & tidal– Off shore wind

• 20% renewables by 2030• 20% of that from off shore wind• Potential 2500 terra watts of off shore wind – deep

– 855 tw 30-60 meters– 603 tw 0-30 meters– Wave 250 tw– Tidal & stream 115– Current 50 tw– Ocean thermal conversion 89 tw

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Many technologies being explored

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Issues with Marine energy• End of the line –become on ramps• Washington Coast very deep

– Favor floating• Salt water is very harsh environment• Challenge to moor – cables• Immature technologies• High cost compared to alternatives• Resource conflicts

– Shipping– Harvesting – Endangered species

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Bigger threats to coast

threats• Climate change

– Sea level changes– More extreme weather

• Change in ownership – Access

• Economic challenges– Education– New industries needed– compatible

Opportunities• Better information

– Monitoring– studies

• Rebuild infrastructure– fish friendly

• New industry– Jobs– Energy sales– taxes

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Marine spatial planning• http://www.msp.wa.gov/• Understand – create a vision• Map - monitor• Economic activities• Natural processes – ocean food chain• Infrastructure – marine / terrestrial• Set priorities• Invest smart – repair• opportunities

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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?3. When will be have a price on carbon? Can we massively increase investment in efficiency?4. 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 sector56

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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 StearnsSenior Energy Policy SpecialistWashington State Department of CommerceTim.Stearns@Commerce.WA.gov206-256-6121

www.commerce.wa.gov/energy

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