CALIFORNIA ENERGY COMMISSION Terry Surles, Director Technology Systems Division California Energy Commission November 6, 2001 Industry Growth Forum Connecting

CALIFORNIA ENERGY COMMISSION

Terry Surles, DirectorTerry Surles, Director

Technology Systems DivisionTechnology Systems Division

California Energy CommissionCalifornia Energy Commission

November 6, 2001November 6, 2001

Industry Growth ForumIndustry Growth ForumConnecting to the Market:Connecting to the Market:

Navigating the Valley of DeathNavigating the Valley of Death


California Must be Prepared to Face the Same Issues as Others Must

Economics Resource Competition New technology market

penetration

Environment Climate change Life cycle analysis

Security Oil, Nuclear materials

Energy Costs Fundamentally Affect our Overall Economy


A

g

l]

l

l’

l’


Coal16%

Large Hydro19%

Nuclear17%

Natural Gas36%

Eligible Renewable

12%

2000 Net Power System

Eligible Renewables

Biomass & Waste- 2.0

Geothermal - 4.6

Small Hydro - 3.0

Solar - 0.4

Wind - 2.0


Per-capita electricity consumption, 1960–2000

0

2

4

6

8

10

12

14

16

1960 1965 1970 1975 1980 1985 1990 1995 2000

Rest of U.S.

California

(DOE and CEC data, compiled 1960–89 by Worldw atch Institute, 1990–2000 by Rocky Mountain Institute; 2000 data are preliminary; 1991–2000 population data not yet renormalized to 2000 Census findings)

California: policy really does workM

Wh

per

pers

on-y

ear


0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

43,509 MW

Contribution to ISO Peak DemandAugust 16, 2001 (MW)

Commercial AC

Commercial Lighting

Residential AC

Other

MW

60005000

6000

26,509


Any R&D Program Must Consider

Near-term realities political attributes: affordable, reliable, safe

Longer-term vision resource competition future regulatory/environmental issues

For both limited budget uncertainties associated with life-cycle costs and

competing technologies and lifestyles


Carbon Management:An Approach for Integrated Energy Systems R&D

Carbon Management

Efficiency< Btu/GDP

Decarbonization CO2

Btu

SequestrationCO2 atm

CO2 produced

<

<


Vision Statement

The future electrical system of California will provide a clean, abundant and affordable supply

tailored to the needs of “smart”, efficient customers and will be the best in the nation.

Tailored, clean, abundant, affordable supply

Smart, efficient customers


PIER Mission Statement Priorities

California’s Energy Future

Economy:Affordable Solutions

Quality:Reliable and

AvailableEnvironment:Protect and

Enhance


Attributes for Addressing State Issues

Program Integration

Balanced Technology Portfolio-Temporal-Technology-Risk

TechnologyPartnerships- Universities- Industry- Federal

Focus onCalifornia- Specific to State needs


Technology Development Continuum - Innovation to Market

PIER Program (CEC)Renewables Prog. (CEC)

DG & Energy Efficiency Prog(CPUC)

CA Mun. Utility Programs


Investment

Consumer Education Account

$5.4 million (1%)

Existing Account$243 million (45%)

New Account$162 million

(30%)

Emerging Account$54 million (10%)

Customer Credit Account

$75.6 million (14%)

• Existing, New and Emerging Renewables

• Emerging Renewables Buydown Program

• Export Program


EXPORTING ENERGY TECHNOLOGY

Data from export brochure; Export Program

• The World Bank estimates that over $30 trillion in investments are required for power generation projects over the next 20 years to meet global electricity demand.

• Developing and industrializing nations throughout the world are improving their electricity resources by investing in and developing new and efficient energy technologies.

• The California energy industry is viewed as a model for technology innovation and implementation.

• Since 1988, $400 million in energy export sales has resulted from the program’s assistance to California companies.


Lighting Advances: The Berkeley Lamp

Increased lighting quality Energy savings- 30-50% Low glare - computer Unique control features Up or down lighting Lots of light 450 W worth of

incandescent and halogen lighting for 150 W


PowerLight• PowerLight achieved a 57% reduction in manufacturing costs of the PowerGuard and opened an 18,000 ft2 automated tile manufacturing facility in Berkeley

•PowerLight is the U.S. leader in BIPV with PowerGuard

• 2/29/00 - PowerLight installed the largest roof-integrated, thin-film solar electric system in North America a 10,000 ft2 installation at the Port of Cape Charles, Virginia

• The PowerGuard system are joined by a tongue-and-groove design that requires no roof penetration or adhesive, thus eliminating leakage and related maintenance


PowerLight Corporation Building-Integrated PV Roof System


The Wind Turbine Company

Design, develop and demonstrate a utility-scale wind turbine

Horizontal axis, two-blade, downwind design

Prototype developed for PIER and tested at NREL rated at 250 kW

Commercial prototype demonstration sited at the Fairmont Reservoir in LADWP territory for a 500 kW - scaled up to 750 kW - wind turbine demonstration to begin in October 2001

Goal is to produce electricity $0.035 cents per kWh per 100 unit wind farms with wind resources 15 mph.


Alzeta Gas Turbine Semi-Radiant Burner (GTSB)

• PIER is helping develop low- or no- emission electric production methods, including gas turbines for use in DG

•Alzeta’s GTSB combustors successfully demonstrated simultaneous readings 2 ppm emissions of NOx, CO and unburned hydrocarbon on gaseous fuels during prototype testing.

• Goal is to lower cost of emission reduction by $100/kW for smaller facilities

•Alzeta has paid $24,464 to date in royalty repayment to the PIER Program based on direct sales and licensing of the product


Catalytica Energy SystemsXonon Catalytic Combustion

Ultra-low NOx < 3 ppm provides pollution prevention vs. exhaust cleanup

Addresses forecast that 90% of proposed new capacity in U.S. by 2020 (390 GW) will be gas fired

Commercialization agreement with Kawasaki (>50% of small turbine market) currently offering Xonon-equipped 1.4 MW turbine

Commercial Xenon modules shipped 3Q 2001; 4Q 2001 VA hospital installation

GE (50% of world turbine market) launch order for up to six Xonon-equipped 10 MW turbines


Kalina Cycle Canoga Park Facility

• Kalina Cycle uses working fluid of 70% ammonia and 30% water

• Ammonia has much lower boiling point than water and spins the steam turbine at lower temperatures

• 3.2 MW plant at Canoga Park, CA

• GE has purchased exclusive license to use Kalina in their combined-cycle gas turbine systems worldwide

• $505,000 royalties received from Exergy, Inc.


Real Time Transmission Line Monitoring/Rating• tension monitoring

increases transmission capabilities by 15-30%

• highly accurate - measures line sagging to within 1-3 inches

• increased safety - provides the actual real time rating and provides alarms of impending clearance violations

• system 1-3 were built for utilities in Virginia, Colorado and Finland

• 200th system was sold on 8/4/00. The systems are in use on five continents by 70 utilities.


High Performance Fume Hood

• reduces airflow and energy requirements by 30-50%

• flow reduction from each hood cuts energy costs by $1000/yr

• maintains or enhances worker safety

• ASHRAE standard test achieved containment with 70% flow reduction

• with 30,000 hoods in state, the new Hood could save about 360 million kWh/yr, totaling nearly $30 million


California Energy Commission Thoughts on Market Connectedness

R&D, with the wrong set of attributes, will fail on a commercial basis

Attributes must include factors for successfully reaching the marketplace

Even technologically mature products need governmental support due to market failures

environmental externalities of fossil fuel-based energy technologies are not reflected in the market price

unbalanced distribution of energy subsidies

CEC supports existing, new and emerging renewables through production incentives, capital cost buydowns, and rebates to customers

Venture capital can catalyze movement into marketplace


Conclusion: Still an Open Question as to Our Success

Need near-term successes to establish variability of program

Must establish substantive collaborations with other funding agencies

Must establish long-term relationships with successful performers

Better linkage between existing state programs is mandatory

Interaction with venture capital community critical to our future success


Will California Lead Change?

OLD Electricity by nuclear,

gas, coal-by-wire, hydroelectric

No choice to consumers - tax mentality

Laissez-faire

NEW Base load central

stations with reliance on distributed generation - “Community systems”

Choice of supplier and technology

Government catalyzes true paradigm shift

Documents

CALIFORNIA ENERGY COMMISSION Terry Surles, Director Technology Systems Division California Energy Commission November 6, 2001 Industry Growth Forum Connecting