Getting the Facts on Renewable Natural Gas
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Getting the Facts on Renewable Natural Gas Making California’s future renewable 2nd Annual AGA-EPA Natural Gas STAR/Methane Challenge Renewable Natural Gas Workshop & Exhibit Presented by Deanna Haines, Director of Energy & Environmental Policy SoCalGas/SDG&E Ft. Worth Omni Hotel | October 23, 2018 PREVIEW »WHO WE ARE »CONTEXT »RNG BASICS »THE CASE FOR RNG »PROJECTS 2 WHO WE ARE… SoCalGas & SDG&E Territory Both Utilities in service for over 135 years SoCalGas »Largest natural gas distribution utility in the US »Serve 12 counties (over 500 communities) and more than 21 million people »Over 5.8 million gas meters SDG&E »Provides electricity and natural gas to 3.4 million people from Orange County to the Mexican border. 3 The Case Context RNG Basics for RNG 4 California leads the nation in setting climate goals and policy Governing Law – SB100 Governing Law – SB1383 Executive Order B-55-18 By 2030, obtain By 2030, reduce By 2045, economy- methane emissions wide, become 60% Carbon of electricity from 40% renewable sources below 2013 levels Neutral 5 5 We need scalable, affordable solutions to solve these issues Solar, wind and We need to use hydro alone are ALL the tools in our not enough. toolbox – including Renewable Natural Gas. 6 Like electricity, natural gas can come from renewable sources 7 Why is this important? 8 CA’s biggest sources of methane come from our waste streams 2%3% 5% 10% Dairies & Livestock Landfills & Waste Water Pipelines & Storage Oil & Gas Extraction 55% Agriculture 25% Industrial & Misc. Source: California Air Resources Board, 2018 Greenhouse Gases Emissions Inventory, 2016 Methane Emissions 9 RNG is critical to California’s overarching GHG reduction plan Short Lived Climate Methane Cap & Trade Pollutant Plan ~35% 62% Energy Efficiency Biofuels (Low Carbon Fuel Standard) 50% Renewable Portfolio Standard Mobile Sources Source: Percentages reflect reductions proposed in California Air Resources Board, AB 32 Updated Scoping Plan (2017) 10 The Case Context RNG Basics for RNG 11 Let’s take a closer look. 12 The basics of Renewable Natural Gas CH4 Capture waste from Convert into biogas Process the biogas Inject the dairies, farms and using anaerobic to make it pipeline- biomethane into landfills digestion ready (biomethane) the pipeline for future use 13 Key terms defined Renewable Renewable Biogas Biomethane Natural Gas Gas a biofuel that is biogas that has been methane produced can be renewable naturally produced cleaned to state from renewable natural gas or from the decomposition standards and sources like digested hydrogen gas of organic waste converted to organic waste and produced from Power- during anaerobic biomethane, which is gasified biomass to-Gas. digestion. Until biogas renewable gas. is processed to state pipeline standards, it is not considered renewable gas. 14 The Case Context RNG Basics for RNG 15 Achieve 30% emissions reductions Renewable Natural Gas in the building sector by switching to beats building ~5% RNG Achieve the same GHG reductions electrification as overhauling 100% of CA’s buildings to all electricity with Proportion of RG required to achieve the same GHG emission savings by 2030 As a % of buildings As a % of total gas 20 gas use throughput* ~16% RNG 18 0% 0% 16 12% 4% When used as a 14 23% 8% 12 transportation fuel, RNG from CO2 CO2 per year) mt 10 46% 16% food and Green waste has a 8 Annual Annual GHG emissions 63% 22% (million carbon 6 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 negative intensity Baseline Normal Replacement (100%) *Calculated from % of buildings gas use, Normal Replacement (25%) Overnight Conversion assuming that building consumption represents 34% of SoCalGas’s total gas Normal Replacement (50%) throughput in 2030 Navigant Consulting, “Gas Strategies for a Low-Carbon California Future,” 2018 Bioenergy Association of California, ”Decarbonizing The Gas Sector: Why California 16 Needs A Renewable Gas Standard,” 2014. Increasing renewable energy in any form will increase costs, but it is a worthwhile investment We all agree on that. Now what we need is a practical plan. 17 © Getty Images Renewable Natural Gas is also more cost effective Likely RNG $602 supply mix over 3x more cost $472 effective than 2030 - any electrification $392 scenario $311 $260 $251 $99 Cost Effectiveness2018 Cost $46 ($/mt CO2e, NPV 3% Discount Rate) NPVDiscount CO2e, 3% ($/mt Renewable Renewable Renewable Renewable Electrification Electrification Electrification Electrification Gas (In-State Gas (In-State) Gas (Out-of- Gas (Mixed (ROB, IEPR (ROB, High (ROB, IEPR (ROB, IEPR Supply) + Energy State Supply) In-State / Rates, incl. Rates, incl. Rates, w/o Rates, Low Efficiency Out-of-State) Upgrades) Upgrades Upgrades) HPWH Cost, w/o Upgrades) Source: Navigant Consulting, “Gas Strategies for a Low-Carbon California Future,” 2018 18 With RNG, we can achieve our goals with less disruption In addition to unnecessary costs, electrification would put a heavy burden on consumers. It would mean: • Switching out appliances • Upgrading electric panels What a mess! • Rewiring home electric systems Sources: Navigant Consulting, “Gas Strategies 19 for a Low-Carbon California Future,” 2018 True or False? There is enough RNG available to meet CA’s 2030 goals. 20 True There is a growing supply of RNG in California and the broader U.S. 21 The RNG supply is available: in-state estimates 94 BCF 100-200 BCF 300 BCF UC Davis/ARB Study: ICF Assessment: UC Davis/CEC Study based on current CA with current federal and LCFS regulation / incentives; incentives 100 BCF conservative estimate Sources: The Feasibility of Renewable Natural Gas as a Large-Scale, Low Carbon Substitute, Prepared for the California Air Resources Board and the California Environmental Protection Agency 22 by Amy Jaffe, Principal Investigator. STEPS Program, Institute of Transportation Studies, UC Davis The RNG supply is available: out-of -state resources 1 TCF RNG 16% 272 RNG rate BCF in 2030 Available in the US today Projected CA natural (and growing) gas throughput by 2030 1.7 TCF Sources: U.S. Department of Energy. 2016. 2016 Billion-Ton Report: Advancing Domestic Resources for a Thriving Bioeconomy, Volume 1: Economic Availability of Feedstocks. M. H. Langholtz, B. J. Stokes, and L. M. Eaton (Leads), 23 ORNL/TM-2016/160. Oak Ridge National Laboratory, Oak Ridge, TN. 448p. doi: 10.2172/1271651. But is it feasible? 24 SoCalGas Biogas Upgrading Demonstration Project at the Hale Avenue Resource Recovery Facility (HARRF) HARRF Information Wastewater treatment facility located in Escondido, CA Average Daily Flow ~ 15.6 MGD Biogas was being flared prior to start of demonstration project Biogas Production ~ 95 million cubic feet per year Biogas contains enough energy to supply ~1,200 homes Source of photo: www.escondido.org/water-treatment-plant.aspx 25 25 Biofuels Point Loma Renewable Natural Gas Project Overview ➢ Point Loma Wastewater Treatment Plant treats approximately 175 million gallons of wastewater per day generated by ~2.2 million area residents ➢ Prior to the project, the plant was flaring more than 1.3 million cubic feet per day of digester gas ➢ The plant partnered with BioFuels Energy, LLC, to condition/upgrade wastewater digester gas and feed it into the natural gas pipeline system ➢ Since 2012, the RNG is injected into the utility pipeline and used to power a 2.8 MW fuel cell at UC San Diego and a 1.4 MW fuel cell at South Bay Water Reclamation Plant in San Diego ➢ Total project cost of $45 million, 75% was subsidized through incentives and tax credits Data and Photo Sources https://www.socalgas.com/smart-energy/success-stories/point-loma https://www.socalgas.com/1443740098116/Biogas-to-RNG-at-Point-Loma-Wastewater-Treatment-Facility.pdf 26 26 CR&R Renewable Gas Project Overview * Source of picture - http://www.jrma.com/projectsdetails/cr-r-environmental-center-ad-facility 27 27 CR&R is turning GHG-laden organic waste into Carbon-neutral renewable natural gas Near-zero natural gas engines 325 reduce NOx emissions up to 90% and GHG emissions up to 80%. CR&R's RNG is fueling 400 waste trucks. That’s the equivalent of taking 130,000 cars off the road. 28 We’re developing a renewable natural gas market to capture emissions and meet CA climate goals Up to $110 million in grants from the California Department of Food and Agriculture to support new dairy biogas projects. H2 29 Thinking globally, we can have a greater impact In California, agriculture There’s a bigger is responsible for 9% of opportunity globally. our GHG emissions. How we However, agriculture accounts for 24% of innovate global GHG emissions. matters. 30 If RNG is so great what is standing in our way? Underestimating Short-term Misunderstanding Lack of supply. thinking. infrastructure. perspective. California has the Research and Investments in the A narrow focus on potential to replace development is pipeline are combustion leaves all residential natural expensive, but the necessary if we are out the greater fact gas with RNG. sooner we get serious about that RNG has a going the sooner capturing methane net-positive we see the returns. emissions from environmental waste streams. impact. 31 With a Hydrogen H2 integrated Solar approach Fuel Cells we can achieve our goals and preserve choice, while RNG & Natural Gas w/ Carbon minimizing disruption Capture & and cost Utilization Wind 32 To reach our climate goals we need renewable natural gas Support initiatives Set procurement Develop the market for capturing standards to for renewable methane emissions increase the use natural gas from waste of RNG by public streams utilities 33 Thank You Appendix 36 Interconnection Tools and Process Improvements 36 37 Interconnection Tools and Process Improvements 1. Modify the Existing Rule 30 Gas Quality Deviation Process ▪ Approval of Advice Letter 5128 effective on 5/28/17 allows interconnectors to request a gas quality deviation during the Capacity Study (previously only available starting with the Preliminary Engineering Study) 2.