Regulatory Solutions for Building Decarbonization: Tools for Commissions and Other Government Agencies + NEAT Tool in LA at the bottom
2020 | By Sherri Billimoria and Mike Henchen DOWNLOAD
To meet the imperative of curbing climate change and restoring clean and healthy air to our communities, it is critical that policymakers act to eliminate greenhouse gas (GHG) emissions from the building sector. In the United States, fossil fuels burned in residential and commercial buildings account for at least 600 million metric tons of CO2 equivalent emissions per year—and far more when methane leakage is considered. Utilities, their regulators, and state policymakers together have an opportunity to eliminate these emissions and transform American homes and businesses to run on clean energy.
The old model of utility regulation is not conducive to an all-electric future and the scope of change needed is broad. To help inform that evolution, this report offers a framework for the comprehensive regulatory reforms required to transition to clean energy in the US building sector, along with more than 40 specific recommendations for action.
Resource Library
“Regulatory Solutions for Building Decarbonization: Tools for Commissions and Other Government Agencies” outlines 10 key strategies to support building decarbonization. In this library, we share resources from commissions, nonprofits, and media that expand on the themes and strategies introduced in our report.Holistic Approaches to DecarbonizationNear-Term Market OpportunitiesManaging the Transition
Focus on Equity and Inclusion
Equity and inclusion must be considered throughout all the potential solutions in this framework; low- and moderate-income customers and disadvantaged communities cannot be an afterthought. Decision-making processes must meaningfully include the perspectives of multiple communities and programs must be designed to specifically support low-income and disadvantaged communities at risk of being left behind.
Equitable Building Electrification: A Framework for Powering Resilient Communities
Greenlining Institute and Energy Efficiency For All
Greenlining’s Equitable Building Electrification Framework addresses the opportunities and challenges that electrification presents for low-income communities—70 percent of whom are renters. The framework finds that electrification can be a transformative force for low-income residents, and it explains the steps the state must take to ensure that electrification helps close the clean energy gap in California and provides relief to millions of residents facing energy insecurity in the current system.
This five-step framework presents a start-to-finish recipe for how the current goals of building electrification can be aligned with producing healthy homes, creating high-quality, local jobs that cannot be outsourced, and establishing stronger connections between everyday Californians and our climate change policies and goals.
Sacramento Wants to Electrify Its Homes, Low-Income Families Included
Justin Gerdes, Greentech Media
Sacramento Municipal Utility District (SMUD) attended Rocky Mountain Institute’s eLab Accelerator to answer the question: how does a not-for-profit municipal utility that has committed to eliminate carbon from buildings ensure that its most disadvantaged customers aren’t left behind during the transition? A guiding belief for SMUD was that low- and moderate-income households should be able to transition to gas-free electric appliances at the same rate as the rest of the population. The team saw potential benefits of that transition for building owners and tenants alike and developed a plan to integrate electrification into existing low-income efficiency efforts.
Align Decarbonization Regulatory Work across State and Local Agencies
The scale of transformation needed to eliminate building emissions will require a cohesive strategy across government. To maximize progress in meeting shared objectives, public utility commissions and other government bodies will need to align on a vision, clarify roles, and coordinate policies and programs.
Establish Clear Guidelines for Alternative Fuels
While proposals to decarbonize pipeline fuel have emerged across the country, state regulators need to consider a number of key questions—what is the overall availability and best use of limited alternative fuels? What is the overall lowest-cost decarbonization pathway? What standards and requirements about carbon accounting should be in place?
The Challenge of Retail Gas in California’s Low-Carbon Future
E3 for California Energy Commission
A new E3 study for the California Energy Commission demonstrates why the state needs a transition strategy for its retail natural gas distribution system, as it aims to achieve its ambitious climate goals by midcentury. In this study, E3 evaluated two strategies for reducing carbon emissions from California buildings: building electrification and renewable natural gas. E3 found that building electrification is likely to be a lower-cost and lower-risk strategy for reducing carbon emissions from buildings in California. E3 also found that, particularly under a high building electrification future, customers remaining on the natural gas system could face disproportionately high costs in the absence of a gas transition strategy.
Plan for Workforce Development
The transition to a carbon-free buildings sector will both create new employment opportunities (e.g., installing new equipment, performing efficiency upgrades, engineering and manufacturing new technical solutions, and expanding electricity generation) and eventually require a managed transition away from employment focused on diminishing fossil fuel use (e.g., engineering and installing gas distribution infrastructure, installing gas appliances, and delivering oil and propane to homes and businesses).
California Building Decarbonization: Workforce Needs and Recommendations
Betony Jones, Jason Karpman, Molly Chlebnikow, and Alexis Goggans
This paper is the first to estimate the statewide market potential, costs, and potential employment impacts of building decarbonization in California. Building electrification will impact several employment sectors, including construction jobs to electrify existing buildings, manufacturing jobs for electrical equipment and appliances needed for installation, and to support upgrades and expansion to the electric system to support increased electric sales.
In addition to the increased demand for workers in these areas, there will be a reduced need for workers in other areas. All-electric new construction of buildings eliminates the need for plumbers and pipefitters to extend gas lines and connections and reduced gas sales could cut the number of utility workers needed to provide gas service to customers.
To guide workforce planning and engagement, this paper discusses the distribution of the positive and negative employment effects by market segment and by industry. It provides recommendations for engaging skilled and trained workers in the transition to clean energy generation and electric buildings. Suggestions to minimize and mitigate potential job losses from decreased natural gas consumption are also presented.
California’s Gas System in Transition: Equitable, Affordable, Decarbonized, and Smaller
Gridworks
This report shows how a suite of local and state-wide policies resulting from California’s commitment to 100 percent clean electricity and carbon-neutrality are set to cause a significant reduction in gas demand in coming decades. At the same time, the cost of safely operating California’s gas infrastructure has risen in recent years and is set to rise again as utilities seek necessary safety upgrades and investments.
Without a strategy to transition the gas delivery system, the confluence of these two trends could cause harm to gas workers, low-income gas residents, gas-dependent industries, and the broader economy. Our report begins the development of that strategy, providing recommendations on how state and industry leaders can meet this challenge head on.
Consistent with Gridworks mission to convene, educate and empower stakeholders to decarbonize electricity grids, this report draws on a series of facilitated discussions between key consumer, labor, equity, utility and environmental stakeholders. These stakeholders provided invaluable input, without which this report would not be possible.
Align Efficiency Policies with Decarbonization
Many energy efficiency policies and standards were designed at a time when fuel switching was not a cost-effective or environmentally beneficial choice. Updating these regulations is crucial to ensuring that utilities have the correct incentives to support electrification where it supports policy goals or offers other benefits, in addition to traditional energy efficiency.
Next-Generation Energy Efficiency Resource Standards
Rachel Gold, Annie Gilleo, Weston Berg – American Council for an Energy-Efficient Economy
Energy efficiency resource standards (EERS) have been a key tool for delivering energy savings in states across the country. Now states are looking to their energy efficiency policies to do more. New approaches to EERS can help them meet aggressive climate goals, lower costs, improve grid flexibility, and provide bill savings and healthier homes to those with the highest need. This report details progress in five states as they shift toward next-generation EERS policies. It concludes with recommendations for using EERS to deliver climate, cost, grid, and equity benefits.
Redefining Energy Efficiency: EE 2.0
Ken Colburn and Joni Slinger
This article presents a new vision for energy efficiency (“EE 2.0″) based on the concept of energy optimization and lays the foundation for subsequent articles on EE in this special issue of Electricity Journal. Energy efficiency is key to reducing the size of the energy challenge, to accelerating the achievement of its solution, and to enhancing energy productivity, but old ideas that ignore the potential benefits of electrification and narrowly equate energy efficiency with efforts to reduce consumption of a single energy source—like electricity—need to evolve. The key to affordable decarbonization is making optimal use of low-cost, emissions-free energy sources, when and where they are available.
Update Electricity Rate Designs
Both electric and gas rate design may need reform to capture benefits and support affordability during a transition from gas consumption to electricity consumption. Time-varying rates can help to capture the value of demand flexibility, and smart rate design, demand flexibility, and targeted energy efficiency can minimize impacts from electrification on peak demands.
A new E3 study for the California Energy Commission demonstrates why the state needs a transition strategy for its retail natural gas distribution system, as it aims to achieve its ambitious climate goals by midcentury. In this study, E3 evaluated two strategies for reducing carbon emissions from California buildings: building electrification and renewable natural gas. E3 found that building electrification is likely to be a lower-cost and lower-risk strategy for reducing carbon emissions from buildings in California. E3 also found that, particularly under a high building electrification future, customers remaining on the natural gas system could face disproportionately high costs in the absence of a gas transition strategy.
California’s Gas System in Transition: Equitable, Affordable, Decarbonized, and Smaller
Gridworks
This report shows how a suite of local and state-wide policies resulting from California’s commitment to 100 percent clean electricity and carbon-neutrality are set to cause a significant reduction in gas demand in coming decades. At the same time, the cost of safely operating California’s gas infrastructure has risen in recent years and is set to rise again as utilities seek necessary safety upgrades and investments.
Without a strategy to transition the gas delivery system, the confluence of these two trends could cause harm to gas workers, low-income gas residents, gas-dependent industries, and the broader economy. This report begins the development of that strategy, providing recommendations on how state and industry leaders can meet this challenge head on.
Consistent with Gridworks mission to convene, educate, and empower stakeholders to decarbonize electricity grids, this report draws on a series of facilitated discussions between key consumer, labor, equity, utility and environmental stakeholders. These stakeholders provided invaluable input, without which this report would not be possible.
Managing the Transition: Proactive Solutions for Stranded Gas Asset Risk in California
Andy Bilich, Michael Colvin, Timothy O’Connor, Environmental Defense Fund
To cut greenhouse gas emissions and air pollution, California agencies, municipalities, and some utilities are rethinking the role of natural gas within the state’s energy system. This includes new policies and approaches to use more electric options in homes and businesses, and to reduce the use of natural gas in power plants. Succeeding in this endeavor will reduce reliance on the gas system, which could result in existing gas infrastructure becoming “stranded”.
This carries important financial and political implications that, if not managed effectively, could complicate the state’s efforts to combat climate change. This framework provides guidance on how policymakers can address the transition away from gas. The report details options including strategic electrification, methods to pay for early retirement of the gas infrastructure, plans needed to decommission the gas infrastructure, and the need to have a bright line for new investments.
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NEAT tool in LA
Net Emissions Analysis Tool (NEAT)
Net Emissions Analysis Tool (NEAT)
Working Group
User’s Guide and Sample Cases
The Net Emissions Analysis Tool (NEAT) is a computational tool, developed by staff at the South Coast Air Quality Management District (South Coast AQMD), which calculates the changes in NOx and greenhouse gases (GHG) emissions and the costs associated with switching residential appliances to cleaner and more efficient technologies. The development of NEAT stems from the need to evaluate measures in the 2016 Air Quality Management Plan, such as CMB-02 – Emission Reduction from Replacement with Zero or Near-Zero NOx Appliances in Commercial and Residential Applications – and CMB-04 – Emission Reductions from Restaurant Burners and Residential Cooking. These measures seek NOx emission reductions with zero and near-zero NOx appliances in residential and commercial applications, and integrate energy efficiency enhancements.
NEAT is specifically tailored to the South Coast Air Basin of California (SoCAB), and is developed based on a mix of baseline technologies reported in the 2009 Residential Appliance Saturation Survey (RASS). The tool allows the user to select cleaner residential technologies per household type (single, multi-family and mobile home) and individual climate zones. Example of cleaner technologies include high-efficiency natural gas appliances and electric alternatives like heat pumps for water and space heating. NEAT uses comprehensive rate structures that represent all the utilities that are specific to the various regions present in the SoCAB. For example, one can use NEAT to analyze the electrification of residential natural gas appliances, and its impact on NOx and GHG emissions, and costs due to purchase and installation, and to shifting electricity and natural gas use. While NEAT is a holistic tool that is designed to calculate changes in emissions and costs for a population of homes, it is not suited for modeling a specific home.
NEAT is equipped with a comprehensive module that allows addition of residential solar panels to calculate its costs and benefits. The tool accounts for how much panel area is available in an average single family and mobile home household in each climate zone. The amount of electricity that can be generated by the panels is calculated using the National Renewable Energy Laboratory’s PVWatts calculator. The solar panel module allows the user to input parameters related to the type of solar panel (e.g. standard, premium, and thin film), system loss, inverter efficiency, DC to AC efficiency, and panel tilt angle. Hourly solar and meteorological data used in the module is based on selected meteorological stations representing each climate zone. The cost of the panels include installation and electricity savings based on zone-specific electricity rates. The module calculates the costs of various solar panel size configurations and finds the panel area that minimizes the overall cost.
With the parameters input by the user, NEAT simulates a mix of 15,000 homes that is representative of the appliance technology mix in each climate zone and each housing type. The results from NEAT simulations provide a distribution of homes with varying levels of emission changes and costs associated with each technology switch. The tool allows the user to screen for homes with the most cost effective appliance changes. Along with other applications, the tool can be used to constrain the amount of funding used to implement an incentive program targeted to switch appliances and design incentive funding to maximize emission reductions with limited financial resources.
For more information, please contact:
Sang-Mi Lee, Ph.D., Program Supervisor
(909) 396-3169
Scott Epstein, Ph.D., Program Supervisor
(909) 396-3754
Marc Carreras-Sospedra, Ph.D., Air Quality Specialist
(909) 396-2852
