by Julian Spector
September 21, 2018

The grid is not enough.

As he signed the most ambitious clean electricity law the world has ever seen last week, California Gov. Jerry Brown upped the ante by adding a creation of his own: He signed an executive order calling for the state to achieve carbon neutrality by 2045.

That order builds on earlier legislation that requires the state to reduce greenhouse gas emissions to 80 percent below 1990 levels by 2050.

It’s a sign of the times that removing all carbon emissions from the electrical grid of the most prosperous state in the union will be the easy part.

Looking beyond to the total carbon footprint of the state refocuses the conversation on other sectors. Transportation now far outpaces electricity production for California’s carbon emissions; it delivers 41 percent of emissions, according to the state's accounting. Industrial activities contribute another 23 percent; electricity production, only 16 percent.

Solving this challenge will require a range of storage technologies, not all of them the grid batteries we usually talk about in Storage Plus. This week, we’ll examine the advances needed in transportation, land-based carbon storage and our beloved grid to make Brown’s ambition a reality.

Answering this challenge will require a vast amount of study and action, with plenty of difficult political choices along the way. Consider this a primer on the crucial themes to watch.

What’s in an EO?

SB 100 calls for changes to the electrical system with the force of law. An executive order from an outgoing executive carries somewhat less weight than that. The surprise addition felt like a way for Brown to score one more point on the way out, after his desired grid expansion bill failed to pass.

A crucial question to ask will be how seriously industry and state agencies take this directive, given that it could easily change down the road.

“Executive orders last until the governor goes away; the statute stays with us,” California Public Utilities Commission President Michael Picker told my colleague Julia Pyper a day after the executive order was signed.

The fragility of executive orders was on display in the Trump administration's unraveling of the orders his predecessor used to advance policy objectives. In California, though, public support for robust climate action is not going to vanish come November. Even the state's Republican legislators who argued against SB 100 mostly did so from a standpoint that climate change needs to be dealt with, but in more cost-conscious ways.

Still, for large corporations considering how seriously to take the carbon-neutrality directive, and how to allocate resources accordingly, locking down the commitment in future legislation would do a lot to solidify the market signal.

Transportation overhaul

Change will have to come to the land of the automobile.

California hosts about 35 million registered vehicles, including 25,467,663 automobiles and several million trucks. Whereas the electrical grid breaks down into territories run by a handful of utilities subject to centralized regulation, purchasing decisions for vehicles are fragmented among millions of people.

California must find a way to nudge those millions of consumers toward cleaner vehicle purchases, be they electric or hydrogen or hybrids or some other flavor of clean. The regulatory driver for this has been in effect for several years now: the Low Carbon Fuel Standard, administered by the California Air Resources Board to reduce the carbon intensity of the transportation fuel pool.

At a high level, California needs to keep ramping this mechanism until it forces automakers to provide cleaner cars across the board.

I would caution against equating this process with “vehicle electrification,” however. Electric drivetrains are one technology solution among a portfolio that includes things like hydrogen fuel cells and renewable fuels or biodiesels.

Each of those means of propulsion excel in certain circumstances but suffer in others.

Electrification is a savvy choice for fleets with predictable routes and schedules that easily integrate charging.

The bus industry looks particularly promising for that, as evidenced by the $155 million that Proterra raised this week, with an agreement to work with Daimler on electrifying school buses. Earlier this year, Generate Capital invested $200 million to buy BYD buses and lease them to customers, applying the “no money down” financing model that worked so well in solar.

Vehicles that need to fill up fast, cover unpredictable routes outside of areas dense with chargers, or just drive for particularly long distances may opt for hydrogen or liquid fuels.

We haven’t written as much at Greentech Media about hydrogen vehicles; so far, they have been a more expensive, less frequently deployed alternative to EVs. If those facts justified writing off hydrogen completely, though, the same could be said for EVs in the first place. What matters is the trend lines, and we’re still in the very early stages of both technologies.

We’re also at the dawn of considerable change to how people use vehicles to get around. Emissions reductions could come by replacing single occupant, internal combustion vehicles, with pooled electric cars, autonomous or otherwise, dropping people off on demand. Electric scooters and bikes can fill in the shorter trips, as they are starting to do in certain cities.

Transit policy expert Daniel Sperling advocates for cities to promote as many transit options as they can, so that they can eventually start pricing driving behavior that degrades the system.

In a talk at MIT this year, the CARB regulator and founding director of the UC Davis Institute for Transportation Studies cautioned that if autonomous driving with electric propulsion makes it so cheap that everyone can ride around in their own vehicle, these technological advances could cause considerably more gridlock and miss out on potential emissions reductions.

At the same time, it’s not fair or politically viable to charge people for driving themselves if they don’t have viable alternatives.

Commercial vehicles call for different strategies. Industry needs to provide compelling low- or no-carbon fleets for trucking, which will be hard to achieve with current battery tech. This has a local air quality benefit too: The density of freight traffic at the Port of Los Angeles, for instance, represents the largest source of smog forming pollutants in Southern California.

Decarbonizing the transport chain from the docks to the depots outside of the city will be necessary to make the carbon-neutral goal a reality. That corridor has already become a testbed for freight decarbonization.

Back to the land

It's pretty much unfathomable that California could function without emitting any greenhouse gases, which means it will have to develop carbon sinks to achieve the net zero goal.

The landscape itself has tremendous potential to capture carbon from the air, with the right interventions. The World Resources Institute has studied this in a series of publications, and found that farms and forests in the U.S. could remove hundreds of millions of metric tons of CO2 per year, with most of that potential coming from reforestation of nonagricultural lands.

Activating landscapes as carbon sinks requires a careful balance of uses: The trick is to change some landscapes without altering so much farmland as to pose a threat to food security. This has to happen as California converts vast tracts of land into wind and solar farms to satisfy SB 100. And then there are the wildfires to worry about — nothing wrecks a good carbon sink like a massive conflagration releasing all that carbon back into the sky.

This type of horizon-spanning carbon storage has little in common with the battery industry, although there's some overlap with the pumped air energy storage contingent; if you can get the CO2 in pure form, pumping it underground into a secure cavern should do the trick. Otherwise, this endeavor will have to move in parallel with the storage of electrons on the grid.

Grid planning for a zero-carbon economy

We’ve covered the grid implications of the zero-carbon electricity law. It’s important to clarify how a zero-net-carbon economy would change the planning calculus.

The executive order, if carried out, will increase the total load that California’s electric grid must serve. It’s possible to deliver clean electricity without electrifying most vehicles; fulfilling the EO requires converting much of the energy used to propel cars into electricity.

If hydrogen vehicles take off, they will need a clean source of hydrogen, such as electrolysis. Currently most hydrogen production comes from fossil fuel refining.

Similarly, the most likely pathway to decarbonize building energy usage is to electrify heating that has been served by gas, further increasing the load.

This could be really good news for utilities, which have been staring down flat or declining load growth for a while, and are searching for meaning as more communities depart to source their own power. The new demand will let utilities build new poles and wires and earn guaranteed profits. But it also enlarges the task of balancing the grid without natural gas, because there will be more to balance.

Put another way, decarbonizing the grid as we know it will be a difficult task and has never been attempted at this scale. The executive order ups the ante, calling for zero-carbon electricity to also power much of California’s transportation and building energy usage.

If you’re designing clean vehicles, hyper-efficient appliances, zero-net-energy homes or increasingly connected home storage systems, that looks less like a problem than a massive market opportunity.