Energy Restructuring Roundtable Insights

Restructuring Roundtable March 24, 2017 Boston, MA Jamie Howland Director, Climate and Energy Analysis Center

Climate Goals Scientific Consensus is generally 80% GHG emissions reductions by 2050 State-level emissions limits reflect this Questions that need to be asked: How much clean energy are states on track to adopt? What technologies have the greatest impact? What emissions reductions will be achieved?

The LEAP Model Long-range Energy Alternatives Planning System Integrated scenario-based modeling Models entire energy system, consumption, emissions All sectors

Modeling Overview Populate model with regional data Build baseline Construct policy scenarios

Baseline Development Largely based on 2016 AEO and EIA SEDS Includes phase 2 standards for diesel trucks Added ISO New England and NY ISO forecasts Continued on trendline to 2030 when needed Adjusted for: NY CES New Rhode Island RPS level Hydro import authorizations

Policy Scenarios - Overview Two policy scenarios Primary Achieves 45% emissions reduction (from 1990) by 2030 This is the point on the straight-line path from today to 80% by 2050 Accelerated 50% emissions reduction by 2030 Scenario components generated using existing data, other forecasts, emerging trends

Policy Scenarios Policy levers are the same in both scenarios Energy Efficiency Vehicle Electrification Locational efficiency (VMT reductions) Fossil heating and water heating electrification Renewables Grid flexibility (storage and demand management) A few smaller levers waste management, solar hot water, etc

Primary Scenario Comparison of selected policy levers Current Market Levels (2016) 2030 Baseline Under Current Trends EnergyVision 2030 Primary Scenario Electric Vehicle (% of cars) Heat Pumps (% of home heating) Electric generation (% renewable) Wind and Solar Hydro Other Energy Efficiency (average % annual savings ) Emissions Reduction from 1990 <1% 3% 13% <1% 3% 14% 13% 38% 57% 3% 6% 4% 22% 13% 3% 40% 14% 3% 2% (2015) 1.4% 2.5% 17% 28% 45%

Primary Scenario - Transportation Cars and light trucks 13% electrified by 2030 Medium-duty trucks 2.5% electrified by 2030 Locational efficiency and VMT reductions 5% Current Market Levels (2016) 2030 Baseline Under Current Trends EnergyVision 2030 Primary Scenario Electric Vehicle (% of cars) Heat Pumps (% of home heating) Electric generation (% renewable) Wind and Solar Hydro Other Energy Efficiency (average % annual savings ) Emissions Reduction from 1990 <1% 3% 13% <1% 3% 14% 13% 38% 57% 3% 6% 4% 22% 13% 3% 40% 14% 3% 2% (2015) 1.4% 2.5% 17% 28% 45%

Primary Scenario - Buildings Electric EE 2.5% annual savings Gas EE 1.4% annual savings Oil/Propane EE 1.2% annual savings 14% of fossil residential heating converted to heat pumps 7% fossil commercial heating converted 12% fossil residential water heating converted to heat pump (average % annual savings ) Emissions Reduction from 1990 Current Market Levels (2016) 2030 Baseline Under Current Trends EnergyVision 2030 Primary Scenario Electric Vehicle (% of cars) Heat Pumps (% of home heating) Electric generation (% renewable) Wind and Solar Hydro Other Energy Efficiency <1% 3% 13% <1% 3% 14% 13% 38% 57% 3% 6% 4% 22% 13% 3% 40% 14% 3% 2% (2015) 1.4% 2.5% 17% 28% 45%

Primary Scenario - Generation Distributed PV 10.9 GW Includes shared solar installations Grid-scale PV 5.3 GW Onshore wind 4.5 GW Offshore wind 4 GW New hydro imports 10 TWh / year Current Market Levels (2016) 2030 Baseline Under Current Trends EnergyVision 2030 Primary Scenario Electric Vehicle (% of cars) Heat Pumps (% of home heating) Electric generation (% renewable) Wind and Solar Hydro Other Energy Efficiency (average % annual savings ) Emissions Reduction from 1990 <1% 3% 13% <1% 3% 14% 13% 38% 57% 3% 6% 4% 22% 13% 3% 40% 14% 3% 2% (2015) 1.4% 2.5% 17% 28% 45%

Primary Scenario - Generation 12 10 Land-Based Wind 8 Offshore Wind Capacity (GW) Utility Scale Solar Distributed Solar 6 4 2 0 2016 2020 2025 2030

Primary Scenario - Generation Other Nuclear Coal Solar Imports (incl. New Hydro) Hydro Natural Gas Oil Wind 140 120 100 Generation (TWh) 80 60 40 20 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Primary Scenario - Generation Peak day analysis Performed for both summer and winter peak using LEAP model s dispatch capability Sufficient resources in both instances Not a substitute for a full reliability analysis

Primary Scenario Energy Grid Increased resources to provide flexibility Demand response 2200 MW in 2030 Active Load Management 900 MW Storage 2200 MW (current MA target is 600 MW by 2025)

Modeling Results New England 250 200 150 Emissions (MMCO2E) 100 Baseline Emissions Primary Scenario 50 Accelerated Scenario 45% Reduction Target - 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Accelerated Scenario Comparison of selected policy levers Current Market Levels (2016) 2030 Baseline Under Current Trends EnergyVision 2030 Primary Scenario EnergyVision 2030 Accelerated Scenario Electric Vehicle (% of cars) Heat Pumps (% of home heating) Electric generation (% renewable) Wind and Solar Hydro Other Energy Efficiency (average % annual savings ) Emissions Reduction from 1990 <1% 3% 13% 20% <1% 3% 14% 18% 13% 38% 57% 67% 3% 6% 4% 22% 13% 3% 40% 14% 3% 50% 14% 3% 2% (2015) 1.4% 2.5% 2.7% 17% 28% 45% 51%

Policy Recommendations Set stronger RPS targets Strengthen RGGI targets Expand carbon pricing to all sectors Maintain or expand Energy Efficiency Significant new efforts needed on electrification and demand management Continue efforts to reform grid planning and modernization Align utility incentives with policy goals

Conclusions Deep emissions results are possible with current and emerging technologies Leading states have demonstrated good progress on many of the pieces needed States need to do more to build full market penetration of these clean technologies