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DOCKETED Docket Number: 19-IEPR-01 Project Title: General/Scope TN #: 232922 Document Title: Adopted 2019 Integrated Energy Policy Report Final 2019 Integrated Energy Policy Report including errata Description: adopted at the February 20, 2020 Business Meeting Filer: Stephanie Bailey Organization: California Energy Commission Submitter Role: Commission Staff Submission Date: 5/6/2020 3:17:58 PM Docketed Date: 5/6/2020 California Energy Commission COMMISSION REPORT Final 2019 Integrated Energy Policy Report Gavin Newsom, Governor February 2020 | CEC-100-2019-001-CMF California Energy Commission David Hochschild Chair Janea A. Scott Vice Chair Commissioners Karen Douglas, J.D. J. Andrew McAllister, Ph.D. Patty Monahan Stephanie Bailey Michael Kenney Linda Barrera Peter Puglia Jennifer Campagna Heriberto Rosales Kristy Chew Charles Smith Nick Fugate Susan Wilhelm Heidi Javanbakht Lana Wong Melissa Jones Primary Authors Raquel Kravitz Project Manager Heather Raitt Program Manager Drew Bohan Executive Director ACKNOWLEDGEMENTS Rizaldo Aldas Jesse Gage Patty Pham Aniss Bahreinian Cary Garcia Kiel Pratt Kevin Barker Elena Giyenko Harrison Reynolds Messay Betru Lorraine Gonzalez Ken Rider Heather Bird Judy Grau Robert Ridgley Martha Brook Siva Gunda Larry Rillera Lindsay Buckley Aleecia Gutierrez Carol Robinson Daniel Burillo Eli Harland Jana Romero Antonio Cano Karen Herter Rachel Salazar Noel Crisostomo Alex Horangic Martine Schmidt-Poolman Matt Coldwell Nicholas Janusch Monica Shelley Christine Collopy Mike Jaske Ravnil Raj Singh Denise Costa Heidi Javanbakht Charles Smith Catherine Cross Chris Kavalec Courtney Smith Ben De Alba Sudhakar Konala Michael Sokol Lisa DeCarlo Alex Lonsdale David Stoms Rhetta DeMesa Rachel MacDonald Peter Strait Pamela Doughman Tiffany Mateo Laurie ten Hope Kristen Driskell Bob McBride Nancy Tran Susan Ejlalmaneshan Jann Mitchell Kourtney Vaccaro Catherine Elder Jennifer Nelson Terra Weeks David Erne Ingrid Neumann Ysbrand van der Werf Bryan Early Le-Quyen Nguyen Bailey Wobschall Scott Flint Mark Palmere Guido Franco Bill Pennington i PREFACE Senate Bill 1389 (Bowen, Chapter 568, Statutes of 2002), as amended, 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. ii ABSTRACT The 2019 Integrated Energy Policy Report 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, clean energy, air quality, and other environmental goals while maintaining reliability and controlling costs. The 2019 Integrated Energy Policy Report covers a broad range of topics, including decarbonizing buildings, integrating renewables, energy efficiency, energy equity, integrating renewable energy, updates on Southern California electricity reliability, climate adaptation activities for the energy sector, natural gas assessment, transportation energy demand forecast, and the California Energy Demand Forecast. Keywords: California Energy Commission, decarbonizing buildings, energy efficiency, energy equity, electricity demand forecast, natural gas assessment, climate adaptation and resiliency, Southern California reliability, transportation electrification, integrated resource plans, Assembly Bill 1257 Please use the following citation for this report: California Energy Commission staff. 2020. Final 2019 Integrated Energy Policy Report. California Energy Commission. Publication Number: CEC-100-2019-001-CMF. iii TABLE OF CONTENTS Page Executive Summary ....................................................................................................... 1 CHAPTER 1: Electricity Sector ......................................................................................... 9 Introduction ............................................................................................ 9 Review of Major Trends in the Electricity Sector......................................... 10 Decarbonizing the State’s Electricity Sector ............................................... 24 Changes Related to Load-Serving Entities ................................................. 38 Recommendations.................................................................................. 40 CHAPTER 2: Building Decarbonization and Energy Efficiency ..............................................42 Introduction .......................................................................................... 42 Decreasing the State’s Reliance on Fossil Fuels in Buildings......................... 44 Load Flexibility for Renewables Integration ............................................... 50 Load Management Standards .................................................................. 53 Building Decarbonization Technology and Research ................................... 56 California Utility Decarbonization Efforts and Programs ............................... 60 Role of the Traditional Energy Efficiency Portfolios ..................................... 67 Recommendations.................................................................................. 68 CHAPTER 3: Advancing Zero-Emission Vehicles ................................................................70 Introduction .......................................................................................... 70 California’s Long-Standing Leadership in Clean Transportation..................... 72 Accelerating the Deployment of ZEVs and the Infrastructure Required to Fuel Them 76 Status of the PEV Market ........................................................................ 84 FCEVs and the Hydrogen Refueling Market................................................ 93 Charging Infrastructure Analyses for Widespread Deployment ..................... 93 Updating the Vehicle Grid Integration Roadmap........................................108 Recommendations.................................................................................112 CHAPTER 4: Advancing Energy Equity ........................................................................... 114 SB 350 Requires California to Focus on Energy Equity ...............................114 SB 350 Recommendations and Implementation Accomplishments ...............115 Emerging Energy Equity Issues ...............................................................126 Recommendations.................................................................................131 CHAPTER 5: Climate Change Adaptation........................................................................ 133 Introduction .........................................................................................133 Policy and Guidance in Support of a Resilient California .............................135 iv Scientific Developments in the Understanding of Climate Change in California144 Crucial Role of Research in Supporting Climate-Resilient Planning and Investment for the Energy Sector .......................................................................................153 California’s Climate Change Assessments .................................................159 Fortifying Community-Level Climate Resilience and Disaster Preparedness Through Energy Sector Innovation..................................................................................162 Building Resilience Into Disaster Recovery ...............................................169 Prioritizing Resilience of Vulnerable Communities ......................................169 Recommendations.................................................................................170 CHAPTER 6: Southern California Energy Reliability .......................................................... 173 Introduction .........................................................................................173 Technical Assessments of Reliability ........................................................180 Update on Southern California Electricity Reliability ...................................192 Recommendations.................................................................................200 CHAPTER 7: Electricity and Natural Gas Demand Forecast ............................................... 202 Background ..........................................................................................202 Data and Analytic Improvements ............................................................202 Emerging Issues ...................................................................................204 Economic/Demographic Outlook for California ..........................................205 California Energy Demand Baseline Forecast, 2019–2030...........................208 Additional Achievable Energy Efficiency....................................................212
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