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Proposed Final 2016 Integrated Energy Policy Report

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Proposed Final 2016 Integrated Energy Policy Report DOCKETED Docket Number: 16-IEPR-01 Project Title: General/Scope TN #: 215417 Document Title: Proposed Final 2016 Integrated Energy Policy Report Update- Track Changes Version Description: N/A Filer: Stephanie Bailey Organization: California Energy Commission Submitter Role: Commission Staff Submission 1/18/2017 12:26:54 PM Date: Docketed Date: 1/18/2017 California Energy Commission COMMISSION REPORT 2016 Integrated Energy Policy Report Update California Energy Commission Edmund G. Brown Jr., Governor January 2017 | CEC-100-2016-003-CMF California Energy Commission Robert B. Weisenmiller, Ph.D. Chair Commissioners Karen Douglas, J.D. J. Andrew McAllister, Ph.D. David Hochschild Janea A. Scott Stephanie Bailey Jim Bartridge Ryan Eggers Guido Franco Cary Garcia Judy Grau Aleecia Gutierrez Eli Harland Mike Jaske Melissa Jones Chris Kavalec Lana Wong Sonya Ziaja Primary Authors Raquel Kravitz Project Manager Heather Raitt Program Manager Robert P. Oglesby Executive Director DISCLAIMER Staff members of the California Energy Commission prepared this report. As such, it does not necessarily represent the views of the Energy Commission, its employees, or the State of California. The Energy Commission, the State of California, its employees, contractors and subcontractors make no warrant, express or implied, and assume no legal liability for the information in this report; nor does any party represent that the uses of this information will not infringe upon privately owned rights. This report has not been approved or disapproved by the Energy Commission nor has the Commission passed upon the accuracy or adequacy of the information in this report. ACKNOWLEDGEMENTS Rizaldo Aldas Chuck Gentry Silvia Palma-Rojas Al Alvarado Mike Gravely Jamie Patterson Ollie Awolowo Ashley Gutierrez Fernando Pina Gina Barkalow Jon Hilliard Scott Polaske Kevin Barker Jeanine Hinde Kiel Pratt Gerry Bemis Yu Hou Ramsha Qasim Sylvia Bender David Hungerford Ken Rider Matt Chalmers Roger Johnson Gabriel Roark Kristy Chew Steve Kerr Carol Robinson Justin Cochran Andrea Koch Jana Romero Alex Coffman Suzanne Korosec Patrick Saxton Denise Costa Laura Laurent Tim Singer Rhetta deMesa Ellen LeFevre Katharina Snyder Collin Doughty Virginia Lew Michael Sokol Catherine Elder Grant Mack David Stoms Scott Flint Heather Mehta Marylou Taylor Jonathan Fong Jennifer Nelson Laurie ten Hope Sandra Fromm Le-Huy Nguyen Kevin Uy Matt Fung Le-Quyen Nguyen Lisa Worrall Tom Gates Rebecca Oliver Susan Wilhelm iii iv PREFACE Senate Bill 1389 (Bowen, Chapter 568, Statutes of 2002) requires the California Energy Commission to prepare a biennial integrated energy policy report that assesses major energy trends and issues facing the state’s electricity, natural gas, and transportation fuel sectors and provides policy recommendations to conserve resources; protect the environment; ensure reliable, secure, and diverse energy supplies; enhance the state’s economy; and protect public health and safety (Public Resources Code § 25301[a]). The Energy Commission prepares updates to these assessments and associated policy recommendations in alternate years, (Public Resources Code § 25302[d]). Preparation of the Integrated Energy Policy Report involves close collaboration with federal, state, and local agencies and a wide variety of stakeholders in an extensive public process to identify critical energy issues and develop strategies to address those issues. v ABSTRACT The 2016 Integrated Energy Policy Report Update provides the results of the California Energy Commission’s assessments of a variety of energy issues facing California. Many of these issues will require action if the state is to meet its climate, energy, air quality, and other environmental goals while maintaining reliability and controlling costs. The 2016 Integrated Energy Policy Report Update covers a broad range of topics, including the environmental performance of the electricity generation system, landscape-scale planning, the response to the gas leak at the Aliso Canyon natural gas storage facility, transportation fuel supply reliability issues, updates on Southern California electricity reliability, methane leakage, climate adaptation activities for the energy sector, climate and sea level rise scenarios, and the California Energy Demand Forecast. Keywords: California Energy Commission, electricity demand forecast, Aliso Canyon, natural gas, methane emissions, climate adaptation, climate change, Environmental Performance of the Electricity Generation System, Southern California reliability, nuclear Please use the following citation for this report: California Energy Commission Staff. 2016. 2016 Integrated Energy Policy Report Update. California Energy Commission. Publication Number: CEC-100-2016-003-CMF. vi TABLE OF CONTENTS Page Executive Summary .......................................................................................................................... 1 CHAPTER 1: Environmental Performance of the Electricity Generation System ................ 13 Introduction .................................................................................................................................. 13 California’s GHG Reduction Policies and the Impact on the Electricity System ............. 14 Changes in California’s Electricity System ............................................................................. 22 Closure of Nuclear Facilities ...................................................................................................... 36 The Environmental Performance of the Electricity System ................................................. 40 Nuclear Decommissioning.......................................................................................................... 62 Emerging and Transformative Technologies ......................................................................... 67 Policy Development and Planning Going Forward ................................................................ 78 Recommendations........................................................................................................................ 82 CHAPTER 2: Energy Reliability in Southern California ............................................................. 89 Aliso Canyon Natural Gas Storage Facility ............................................................................. 89 Transportation Fuel Supply Reliability Impacts .................................................................. 118 Update on Southern California Electricity Reliability ......................................................... 126 Recommendations...................................................................................................................... 145 CHAPTER 3: Climate Adaptation and Resiliency .................................................................... 148 U.S. and California Adaptation Policy Developments ........................................................ 149 Adaptation Activities in California’s Energy Sector............................................................ 151 Development of Climate and Sea Level Rise Scenarios for the Energy Sector .............. 160 Recommendations...................................................................................................................... 175 CHAPTER 4: Electricity Demand Forecast Update .................................................................. 178 Background .................................................................................................................................. 178 2017 IEPR Forecast and Beyond .............................................................................................. 178 Future Data and Analytical Needs .......................................................................................... 185 California Energy Demand Updated Forecast, 2017–2027 ................................................ 186 Method .......................................................................................................................................... 188 Recommendations...................................................................................................................... 198 APPENDIX A: Methane Emissions Associated With Natural Gas Consumption in California .......................................................................................................................................... A-1 APPENDIX B: Offshore Renewable Energy Workshop Summary ........................................... B-1 APPENDIX C: 2016 Lead Commissioner Request for Data Related to California’s Nuclear Power Plants ..................................................................................................................................... C-1 vii LIST OF FIGURES Page Figure ES-1: California's Path to Progress to Meet Climate Goals ............................................ 2 Figure 1: California's GHG Emissions in 2014 ............................................................................ 17 Figure 2: Relative Contribution of Various Greenhouse Gases in California ....................... 18 Figure 3: California's Path to Progress to Meet Climate Goals ................................................ 19 Figure 4: California GHG Emissions by Category (2000–2014) ............................................... 21 Figure 5: Installed In-State Electric Generation Capacity by Resource Type (2001–2015) 23 Figure 6: Electric Generation by Resource Type (2001–2015) ................................................
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