Natural-gas consumption is set for a sharp drop in California as the state pushes to achieve carbon neutrality by midcentury, according to utility Southern California Edison.
SCE, the state’s second-largest utility, anticipates California investing up to $250 billion into clean energy and grid investments by 2045. “Delivered power is going to need to be all zero-carbon," Drew Murphy, senior vice president of strategy and corporate development at Edison International, told GTM. Edison International is SCE's parent company.
Gas and other fossil fuels will continue to play a role, albeit one that is rapidly diminishing. The state's growing share of carbon-free electricity will increasingly displace fossil fuels in buildings and vehicles.
“We think it’s going to be very difficult to have a significant amount of traditional natural gas powering building heating and cooling, and water heating and cooling,” Murphy said on the sidelines of Bloomberg New Energy Finance’s summit in San Francisco this month. “We see 70+ percent of building heating and cooling and water heating and cooling coming from electricity by 2045.”
Meanwhile, extensive energy efficiency gains and the transition to electric appliances will further squeeze natural-gas consumption in California.
“Our modeling would suggest that the total volumes through the gas system in the state will probably decline by about 50 percent," Murphy said. "Most of what’s left is going to be used to power industry, and about half of that gas is going to have to be renewable or zero-carbon — so either from hydrogen or renewable natural gas."
Because the gas-to-electricity transition is so critical for California’s carbon-neutrality push, Murphy emphasized that SCE will continue to urge the state to strengthen standards, codes, research and investment in building electrification.
“It’s going to be really important to get those codes and standards in place as soon as possible because the life cycle [of buildings] is so long,” he said.
The bumpy road to 2045
The larger vision Murphy outlined is detailed in SoCal Edison’s recently published analysis, “Pathway 2045,” a roadmap for how California can meet the ambitious clean energy and climate goals set by the legislature and former Governor Jerry Brown.
In September 2018, Brown signed both SB 100, which requires 100 percent carbon-free electricity in California by 2045, and an executive order directing the state to achieve economywide carbon neutrality by the same year.
Unlike California's other major investor-owned utilities San Diego Gas & Electric and Pacific Gas & Electric, Southern California Edison is an electricity-only utility and has been especially bullish in supporting widespread electrification of buildings and vehicles. SCE’s service territory overlaps that of the single-fuel Southern California Gas Company, a thorny challenge state policymakers must manage as California works to hit its 2045 targets.
SCE's plan envisions approximately $170 billion of investment in clean energy generation and energy storage by 2045, with up to $75 billion more for the grid upgrades needed to accommodate deeper electrification. Grid-served electricity consumption in California would rise 60 percent, alongside a 40 percent jump in peak load.
To meet that demand, California would add 80 gigawatts of new utility-scale clean electricity generation, primarily solar and onshore wind power; 30 gigawatts of rooftop solar on half of the state’s single-family homes; and another 30 gigawatts of utility-scale energy storage.
Getting ready for the EV explosion
If EVs scale as outlined in SCE’s pathway, 26 million light-duty electric vehicles will be on the road in California in 2045 and transportation electrification will increase electric load by 130 terawatt-hours — accounting for more than one-third of the grid-served load.
Facing such a wave, SCE is deploying electric vehicle charging infrastructure and promoting EV adoption across its service territory through its Charge Ready program.
In May 2018, the California Public Utilities Commission (CPUC) approved SCE’s plan to invest $343 million in charging infrastructure and rebates for medium- and heavy-duty vehicles. The plan focuses on fleets, buses and ports.
According to Murphy, SCE has already partnered with three transit agencies to install 30 chargers for electric buses under the program, “and we’ve got a lot more in the pipeline.”
Before the CPUC is SCE’s proposal to spend $760 million in ratepayer funds to install 48,000 charge ports to support light-duty EVs. The plan focuses on installing chargers at workplaces, multiunit dwellings, apartment buildings and condo complexes as well as public charging at state parks and in disadvantaged communities.
Murphy said SCE expects to hear any day from the CPUC on the potential approval of the light-duty vehicle Charge Ready program.
SCE has established a mobility team as a one-stop shop within the utility to increase awareness among customers. “We’ve found that one of the barriers is just educating people," Murphy said. That includes buyers of cars, trucks and vehicle fleets, as well as transit agencies.
Stubborn remaining carbon
Even if all of SoCal Edison’s electrification and low-carbon fuels targets are met, residual and hard-to-abate carbon will remain.
“We’ll also as a state need to figure out how to...capture carbon to get the remaining slice,” said Murphy. SCE estimates that remaining slice to amount to 108 million metric tons of carbon in 2045.
Suggestions from SCE include reducing wildfire risk, restoring degraded natural lands and managing agricultural soils to lock in carbon.
SoCal Edison believes customers will come out ahead in a decarbonized, electrified California.
Electricity bills would go up as buildings and vehicles transition from fossil fuels to clean electricity, the utility estimates, but overall annual energy spend for the average residential customer would fall by one-third, decreasing to $3,130 in 2045.